Supreme Court finally resolves dispute about time limit for product liability claims

26/05/10

On 26 May 2010, the Supreme Court finally ended a long-running procedural battle in the case of O'Byrne v Aventis Pasteur SA about the effect of the 10 year liability period provided for by the European Product Liability Directive (enacted into English law by the Consumer Protection Act 1987).

In 2001, within the 10 year period provided for by Article 11 of the Directive, OB began proceedings against APMSD claiming that he had suffered brain damage caused by a defect in a vaccine which he believed had been manufactured by APMSD.  In fact, the manufacturer of the vaccine was APSA (of which APMSD was a wholly owned subsidiary). In 2003, after the 10 year period had expired, OB applied under s.35 of the Limitation Act 1980 to substitute APSA as the defendant.  APSA opposed the application arguing that to permit its substitution would be inconsistent with the Directive.

The High Court referred this question to the ECJ for a preliminary ruling.  In 2006 the ECJ gave its ruling but the parties disagreed about what the ruling meant.  On return to the High Court Teare J made an order substituting APSA as the defendant, and this decision was affirmed by the Court of Appeal.  On appeal to the House of Lords, Lord Hoffman, with whom three of the other Law Lords agreed, regarded the effect of the ECJ's ruling as clear and would have dismissed the appeal. However, one Law Lord, Lord Rodger, considered that the effect of the ECJ's ruling was not beyond reasonable argument; and in these circumstances all the Law Lords decided that a second reference must be made to the ECJ.

In December 2009 the ECJ (Grand Chamber) gave its ruling on the second reference.  However, the parties again disagreed about what the ECJ had decided.  In April the Supreme Court heard argument on this point.  In its unanimous judgment, given by Lord Rodger, the Supreme Court has now held that the ECJ's ruling on the second reference conclusively establishes that, where the only proceedings brought within the 10 year period were not brought against the manufacturer of the product, it would be inconsistent with the Directive to allow the manufacturer to be substituted as the defendant in those proceedings after the 10 year period has expired. The order substituting APSA as the defendant has therefore been set aside.

The judgment is here.