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Product Liability in Canada

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Product Liability in Canada Product Liability in Canada Presented By Heather Devine September, 2020 Does Canada have a product liability Statute? ▪ Is PL law based on any EU Directive? - Unlike the EU, in Canada there isn’t one cohesive scheme for product liability issues - The Canadian constitution, Constitution Act, 1867, assigns jurisdiction of “property and civil rights” to the Canadian provinces rather than the federal government - With some exceptions, the majority of consumer products fall into the category of “property and civil rights” - For this reason, there can be no singular Canadian statute addressing consumer protection laws ▪ In Canada, the law of product liability involves a combination of case law and legislation ▪ Product liability claims involve two main areas of law, contract (often when consumers enter into warranty agreements) and tort law ▪ With respect to tort liability, there are three main types of negligence claims: negligent design, negligent manufacture of a particular product, and a breach of the duty to warn ▪ In Ontario, the Sale of Goods Act, provides some protection to consumers (sections 13 to 15) What are the elements of PL law in Canada ? • Is privity required? • Privity of contract is defined as “a relationship between two or more contracting parties” • In common law jurisdictions such as Ontario, the leading case of Donoghue v Stevens (1934) established that a consumer does NOT need to enter into a contract with the manufacturer of a product in order to have a claim against the manufacturer in product liability • Who is liable to the plaintiff? • Manufacturers the most common class of defendants in PL cases • Those involved in the chain of distribution of the product: • Importers, wholesalers, distributors, and retailers • Individual employees of business suppliers • Repairers and installers • Inspectors and certifiers • Occupier’s liability • Users What are the elements of PL law in Canada? • What is the definition of a defect? • The existence of a “defect” is provable by inference from circumstantial evidence • A plaintiff can successfully demonstrate that a product contains a defect by presenting evidence that shows: a) the plaintiff has not misused the product AND b) the product has failed in its normal use • Does a plaintiff need to prove that a reasonable alternative design would have avoided the injuries? • No, it is sufficient to show the product is defective. While some productive liability claims will involve negligence with respect to a product’s design, in some cases the defect results from the manufacture or assembly of the product rather than the product’s design • Who determines if a defect exists? • After a review of the evidence presented at trial, which often includes expert evidence, the judge will determine if the evidence supports a finding that the product is defective What are the elements of PL law in Canada? • Who has the burden of proof? • The party claiming that the product is defective • In other words, the plaintiff bringing the lawsuit • What is the burden of proof? Preponderance of evidence? • Product liability cases are civil law matters which means that the burden of proof is on a “balance of probabilities" • Does the plaintiff need to prove causation? • Yes! In addition to showing that the product was defective, the plaintiff must show that their injury was caused by the defect • Can there be more than one cause of an accident? • Yes! • Is there apportionment of causation? • In the majority of cases, a court will assess causation using the “but for” test, which allows for apportionment of causation to multiple causal factors What are the elements of PL law in Canada? • Is the plaintiff’s own conduct an offset to his recovery? • Yes, the court may apportion liability between the plaintiff and the defendant where both parties are at fault • A plaintiff can be found partially liable by failing to observe defects that ought to be observed, underestimating the significance of observed defects, failing to read instructions for use, or misusing the product • What if the plaintiff is found more than 51% responsible for the cause? • A plaintiff’s degree of liability does not preclude their recovery from defendants also found partially liable • Can defendants get an offset for: • Codefendants who settled? Yes • Non‐party entities allegedly at fault? Maybe… • E.g. employers, municipalities, family members How are experts used in PL cases in Canada? • Can the parties offer expert opinions? • It is common practice for both parties to offer expert opinion evidence in product liability cases –up to three experts per issue is allowed by the Rules of Civil Procedure • Who qualifies as experts? What are the standards? • An expert must demonstrate specialized knowledge beyond that of an ordinary person • Specialized knowledge must be gained through academic study, professional qualification, training or experience. In most cases deficiencies in practical or theoretical knowledge go to the weight of an expert’s opinion, rather than affecting its admissibility. • How are the expert opinions discovered? • A party intending to rely on an expert report must serve the opposing parties no later than 90 days before the trial management conference • Parties intending to rely on expert evidence in response to an expert report must serve their report no later than 60 days before the trial management conference • How are experts opinions used at trial? • The experts are called as witnesses at trial (and cross examined) or their evidence is read into the record How do PL trials proceed in Canada? • Consecutive days? • Trials are often set for consecutive business days, but in the event of adjournments may take place over prolonged periods of time • Does the judge ask questions? • A judge may need to ask questions of legal counsel to clarify their understanding of the evidence being presented before them • However, judges generally should not ask in depth questions of witnesses PL in Canada • What percentage of cases settle before trial? • The majority of product liability lawsuits are settled out of court • Are structured settlements allowed? • There are no separate rules that are distinct to the settlement of product liability cases • However, settlement agreements for class actions or matters involving plaintiffs with disabilities will both require court approval • When cases settle, who pays attorney fees? • Generally, each party will be responsible for their own legal fees • Courts should only award costs where parties reach a settlement if there are compelling reasons to do so PL in Canada “ Loser pays” • If we win, what costs do we get? • Legal fees? Yes! Although winning parties commonly recover approximately 50‐60% of their lawyer’s legal fees • Expert fees? Yes! Although a judge will consider the reasonableness of the amounts claimed • How do we apply for costs back? Orders for costs are made by the judiciary What if the plaintiff has no money? ‐ On some occasions, especially in the class action context, lawyers may take on product liability cases on a contingency basis. This allows injured parties that would ordinarily be unable to afford the high cost of litigation access to justice. Can the plaintiff get legal aid for his case? How does that affect the case? ‐ Given the limited resources and stringent application requirements, it is unlikely that plaintiffs will have access to full legal representation from Legal Aid for a product liability matter PL in Canada • Are future damages discounted to the present value? • How? The calculation rate is outlined in section 53.09 of Rule 53 of Ontario Rule’s of Civil Procedure: • The calculation rate to determine awards in respect of future pecuniary damages for the 15‐ year period following the start of the trial is the greater of: • The average value for the last Wednesday in each month of the real rate of interest in long‐term Government of Canada real return bonds, for the period starting on March 1 to August 31 in the year before the year the trial begins LESS ½ per cent, rounded to the nearest 1/10 per cent AND • Zero • The calculation rate for any later period covered by the award is 2.5 % per year (for each year in that period) PL in Canada: Appeals • When can a party appeal from a judgment? • Although parties generally can appeal final orders with the court’s permission, the appealing party should be able to express the following on appeal to have a chance at success: • The errors of law and fact made by the trial judge in his or her reasons for judgment • What would have happened if those errors did not occur • How the appeal court can rectify the errors • What are the common appeals? • Errors of law or the common ground for appeal since errors of fact are very difficult to appeal • How long do appeals take? • The length appeals varies, but can take up to several years due to the high volume of cases before appellate courts • Do you have to post a bond? No. • Is there appellate interest? Yes. What is the rate? Pre and Post‐judgment interest are calculated in accordance with legislation, and continue to accrue during the appeal period. PL in Canada • Do you have PL class actions? • Yes, in Ontario and other Canadian provinces, PL class actions have been brought on the basis of several issues which include: • Negligence (with regard to the design, manufacture, testing, distribution, marketing, and/or sale of a product) • The fitness of a product for its intended purpose • Conspiracy • Causes of action codified in consumer protection statutes • Unjust enrichment or restitution by way of “waiver of tort” where the class of plaintiffs claims the amount of profits the defendant acquired through selling a defective product.
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