CJEU extends suppliers' product liability

Introduction

In its judgment dated 19 December 2024 (Case C-157/23), the Court of Justice of the European Union (the “CJEU”) addressed a question raised by the Italian Supreme Court of Cassation on the interpretation of the definition of the concept of ‘producer’ given by Directive 85/374/EEC (the “Product Liability Directive” or “PLD”) and, in particular, regarding the meaning of the expression “by putting his name” in Article 3, paragraph 1, of the PLD.

Specifically, the Italian Supreme Court sought to determine if the above-mentioned provision extends the producer’s liability to the supplier, even when the supplier has not physically placed its own name, trade mark, or other distinguishing feature on the product, solely because its name, trade mark, or distinguishing feature is wholly or partially the same as that of the producer.

The case

In July 2001, a consumer purchased a Ford car from Stracciari S.p.A., an Italian dealer of that brand. The vehicle had been manufactured by Ford WAG, based in Germany, and supplied to Stracciari through Ford Italia S.p.A., which distributes Ford vehicles in Italy. In January 2004, following an accident in which the airbag failed to work, the consumer brought an action against the dealer and Ford Italia seeking compensation for the damage suffered as a result of the defect in the vehicle. Ford Italia claimed that it was not liable for the airbag’s defect because it had not manufactured the vehicle. The case eventually reached the Italian Supreme Court of Cassation, which had uncertainties as to the interpretation of the expression “by putting his name” in Article 3, paragraph 1, of the PLD. Therefore, the Italian Supreme Court of Cassation suspended the proceedings and sought clarifications from the CJEU on whether the supplier of a defective product must be considered to be a “person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer”, within the meaning of the PLD, even if that supplier has not physically put his or her name on that product, but the trade mark which the manufacturer has put on that product and which corresponds to the name of that producer is the same as a distinctive element of the name of the supplier.

The CJEU ruling

The CJEU pointed out that, in order to ensure the protection of the consumer, the concept of ‘person who presents him or herself as a producer’ in Article 3, paragraph 1, of the PLD cannot refer exclusively to someone who has physically put his or her name, trade mark or other distinguishing feature on the product. Instead, it must include also a supplier “where that supplier has not physically put his or her name, trade mark or other distinguishing feature on the product, but the trade mark which the producer has put on that product is the same, on the one hand, as the name of the supplier or a distinctive element thereof, and, on the other hand, as the name of the producer”.

According to the CJEU’s ruling, it makes no difference whether the supplier has personally puts his or her name, trade mark or other distinguishing feature on the product or whether his or her name contains the wording put on it by the manufacturer, which corresponds to the manufacturer’s name. The decisive factor is the impression created among consumers – by the similarity between the wording in question and that supplier’s own company name – that the person is involved in the production process or assumes responsibility for the product’s quality, thereby instilling comparable confidence as if the product were sold directly by the producer.

The CJEU also clarified that, in accordance with Article 5 of the PLD, the liability of the person who presents him or herself as a producer invoked by the consumer is without prejudice to the provisions of national law concerning the rights of contribution or recourse and, in particular, to the provisions enabling that person to invoke, in turn, the liability of the manufacturer of the defective product.

Comment

This is a groundbreaking decision with significant implications across various industries (not only automotive, but also pharmaceutical, medical device and electronics, to name a few). It will most likely impact all distributors organized as global corporate groups (multinationals), extending their liability. As a matter of fact, it is not uncommon for local entities of multinational groups dedicated to distribution to have a company name that coincides, in whole or in part, with the brand of the products distributed and/or with the name of the relevant manufacturer.

Moving forward, suppliers will no longer be able to evade product liability simply by claiming that they are not the ‘actual’ producers of the defective products. If a supplier’s name resembles that of the product or the producer, the consumer will likely be able to seek damages from either the producer or the supplier.

Furthermore, it is noteworthy that the interpretative criteria expressed by this decision will almost certainly survive the new regime introduced by Directive (EU) 2024/2853 (the “New PLD”), given that the provision in Article 3, paragraph 1, of the PLD has been replicated by Article 4(10)(b) of the New PLD.