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Legislation in favour of the consumer
by David Kelleher
The introduction of Product Liability legislation next year
is being aimed at increasing the power of the consumer and therefore
making it easier for clients and customers to seek redress from
shops, suppliers and producers.
Although product liability is covered, to some extent, by civil
law, the amendments to the Consumer Affairs Act will change
the way liability is proved in a court of law.
Parliamentary Secretary George Hyzler in an interview carried
in the June issue of the Insurance Quarterly magazine –
which is being published today with The Malta Business Weekly
– said that according to civil law, someone who sells a
product that is defective and causes harm or damage, is responsible
for that damage or harm caused. If a cup is defective, and its
causes damage to the buyer, the seller is responsible.
“In Civil Law, the buyer has to prove that the seller was
negligent. The problem, however, arises when you have a small
country like ours which imports most items. Thus when the buyer
goes to the agent and tells him that the kettle, for example,
that he bought was the cause of a fire in the kitchen, the agent
will tell him he has nothing to do with that because he was
only importing that product. Therefore, it is practically impossible
to follow the product to the manufacturer,” Dr Hyzler said.
That scenario is now changing. All the purchaser has to do is
show that the item caused the damage and say where he purchased
it from. It is up to the seller now to trace the route back
to the supplier.
“From a local jurisdiction point of view, we stop at the
point of entry, who in most cases is the agent. There are a
number of exceptions. The most important factor is that that
burden of proof has shifted from the consumer to the producer/
agent who has to prove it was not his fault. This applies to
products that cause over Lm200 in damages. This section of the
law will come into force towards the end of next year in order
to give time to businesses to adjust,” he adds.
Asked whether he expected a huge increase in claims or problems
in enforcing this piece of
legislation, the Parliamentary Secretary said: “I am expecting
two things to happen. One is the signing of back-to-back agreements
for those importing products and/or taking out insurance for
local agents. The latter is the easiest and cleanest although
this could be reflected in prices. The added expense will have
to be absorbed somehow and this cannot be totally taken on by
the agent. Thus prices may increase. I personally feel that
agents will use both back-to-back agreements and insurance policies.
This will lower the costs for the agent and also spread the
risk. I have not carried out any impact assessments and I don’t
see the need to because the law has to be there. But I don’t
expect any major impact on agents,” he said.
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