Sale of Goods Act 1979

Introduction

Together, the Sale of Goods Act 1979, The Consumer Protection Act 1987, and the General Product Safety Regulations from 2005, provide protection to consumers from the UK against faulty and dangerous goods in a range of ways and with different approaches. The aim of this essay is to evaluate whether the current level of protection given to consumers in this regard is satisfactory and whether the reforms instituted by these pieces of legislation have improved the position of those consumers who receive poor quality and dangerous goods.

Analysis of the Consumer Protection Act 1987

It is accepted that the 1987 Consumer Protection Act increased the level of protection available to UK consumers in a number of ways. Perhaps most importantly the Act departed from the normal policy (in evidence in common law tort product liability cases) of the imposition of liability based on fault by establishing a system that imposes non-fault or strict liability. The effect of this is to remove the requirement to prove fault (or negligence) in cases resulting from dangerous or poor quality goods.

Section 14 of the Sale of Goods Act 1979, which is discussed later, provides buyers who suffer loss as a result of defective goods with a remedy, but given the lack of any contractual relationship, this remedy is not of much value to third parties who may suffer injury by the use of a defective product which has been purchased by another person. Until the introduction of the Consumer Protection Act 1987 the only remedy available to such third party individuals would be a right to claim damages under the common law of tort in respect of their losses and injuries. This stems from the foundation case of Donoghue v Stevenson (1932) SC (HL) 31.

However, the 1987 Act introduced a new statutory ground of claim against manufacturers for consumers who suffer injury or loss as a result of the use of a defective product. The 1987 Act was born as a result of the UK’s membership of the European Community and its implementation of EC Product Liability Directive 85/374 OJ L210/29.

This has most definitely improved the position of consumers, but the 1987 Act and the non-fault liability it is underpinned by has not made way for an unrestricted route to easy compensation. It is still necessary to prove the following conditions in order to bring a claim under the Act. These conditions are that: (1) The defendant was a producer, own-brander or importer of the product; (2) The product contains a defect; (3) The plaintiff suffered damage or loss (4) The damage or loss was caused by the product.

Personal injury includes both physical and mental impairment and disease (s 45(1)), whereas property damage claims are limited by the fact that a minimum £275 threshold of loss must be passed before any claim is met. This means that a claim of, for example, £200, which would be considered by many to be a considerable financial loss, cannot be recovered (s 5(4)). This brings into question the adequacy of the protection afforded by the 1987 Act. In addition to this, pure economic losses cannot be recovered and claims are restricted to those concerning loss to private property. Any damage to business property and public property is not recoverable (s 5(3)).

The concept of defectiveness is another relatively problematic issue for the consumer to address. Section 3(1) of the Act stipulates that a product will be considered defective if the safety of the product is not that which consumers would reasonably expect in the circumstances (which include warnings and instructions given, the marketing of the product, its range of reasonable uses and the state of knowledge at the time of its supply). The adequacy of the Act can be brought into question in this respect, with certain questions remaining unanswered, such as what are consumers generally entitled to expect. Also the definition of “defect” in the Act presents a significant problem, as it doesn’t provide without great difficulty an objective standard by which the safety of a product can be measured against by the manufacturer or by the courts.

It can also be argued that the practical impact and value (from the perspective of the consumer) of the imposition of strict liability is significantly harmed by the fact that the 1987 Act makes a number of defences available to producers. These defences are contained in s 4 and include where the defect has arisen due to compliance with law, where supply is not in the course of business and where damage occurred in the distribution chain after its first supply. Most controversial is the so-called ‘development risks defence’ in s4 (1) (e), which provides that a producer will not be liable if the state of scientific and technical knowledge at the time of supply was not such that the defect could be detected. This defence has been the subject of extensive litigation: A v National Blood Authority (No.1) [2001] 3 All ER 289 and X v Schering Health Care Ltd [2002] EWCH 1420. The availability of this defence seems to reintroduce the requirement to prove fault by the backdoor and thus undermine one of the reasons for the implementation of the 1987 Act. Indeed the very reason for being of the Act is called into question and its very adequacy is to some extent jeopardised by this fact.

Analysis of the 2005 General Product Safety Regulations

The 2005 Regulations (SI 2005/1803) are an addition to the Consumer Protection Act 1987 and purposely designed to address the criminal ramifications rather than the civil consequences of the supply of dangerous goods. These Regulations are significant from the perception of the consumer because they impose a compelling criminal sanction and deterrent against the supply of unsafe products. In other words the Regulations deal with prevention, rather than the civil remedy of compensation.

The 2005 Regulations replaced the 1994 General Product Safety Regulations (SI 1994/2328) and have added further strength to the legislative framework covering consumer product safety to some extent (Explanatory Memorandum, 2005, para2.2). The Regulations have clarified, reinforced and expanded obligations imposed on producers and distributors to refrain from putting unsafe consumer goods on the market. The powers available to the enforcement authorities (including local authorities, Trading Standards Authorities and Environmental Health Officers MHRA for medical products and VOSA for vehicles) responsible for policing the general safety requirement enshrined in the Regulations have also been improved in comparison with those laid down by the 1994 version.

The range of the Regulations is broad. All new and second-hand products supplied to consumers for personal use are covered. The concept of ‘supply’ is also expansively construed, including not just selling, but also lending, hiring, leasing and part-exchanging. That said, the maximum penalty that can be imposed is 12 months imprisonment and/or a £20,000 fine for the supply of unsafe goods. It could be argued that given the size of many of the undertakings that might contravene the Regulations a £20,000 fine is a relatively insignificant figure, a mere drop in the ocean. 12 months in prison is a much more powerful deterrent in theory, but in practice it will prove extremely difficult if not impossible to lay the very high degree of proof required by the criminal law (beyond reasonable doubt), in terms of both mens rea and actus reus, at the foot of any single individual within a company. Therefore, with the threat of imprisonment extremely unlikely in most cases and the maximum fine being set at a trivial £20,000 (from the perspective of most companies of any size) it is argued that the 2005 Regulations fall some way short of providing the kind of real and substantial deterrent that could effectively serve the aims of consumer protection in the United Kingdom.

It is useful that a criminal sanction is provided by the 2005 Regulations to back up the civil remedies, but it is disappointing on reflection that the deterrent imposed appears to lack any real practical force.

Analysis of the Sale of Goods Act 1979

In terms of providing protection against dangerous and shoddy goods the implied term contained in section 14(2) is the main contribution made by the Sale of Goods Act 1979. Section 14(2) stipulates:

“Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.”

In common with some of the concepts contained in the Consumer Protection Act 1987, the notion of ‘satisfactory quality’ is not particularly helpfully defined and explained by the 1979 Act. Section 14(2A) suggests that goods must meet the standards of quality that ‘a reasonable person would regard as satisfactory’ and that the description applied to the goods, the price of the goods and ‘all other relevant circumstances’ should be taken into consideration in this context. It can be argued that this leaves the concept of satisfactory quality somewhat shapeless and to some extent this is entirely intentional, because it allows the courts a reasonable amount of interpretative flexibility and jurisprudential freedom. There is of course nothing wrong with ensuring that laws remain as flexible as possible, but a degree of certainty is lost and this is at the detriment of both consumers and suppliers.

It is also unhelpful that most of the case law on this issue relates to the concept of ‘merchantable quality’ rather than ‘satisfactory quality’, which was only introduced to replace the former term by the 1994 Sale and Supply of Goods Act: Bartlett v Sydney Marcus [1965] 1 WLR 1013 and Griffiths v Peter Conway [1939] 1 All ER 685. It does however seem that the new satisfactory quality term is harder for suppliers to meet than the old merchantable quality. That said, it is difficult to identify a definitive pattern and the courts do not employ uniform patterns of interpretation, leading to unpredictable results.

Conclusions: Is the UK consumer adequately protected against poor quality goods?

In order to answer such a question, it would really depends on what is by meant by ‘adequately protected’ and against which benchmarks the concept of adequacy is judged. It can be said that it is true that the current consumer protection ‘system’ which includes the 1987 Consumer Protection Act, the 1979 Sale of Goods Act and the 2005 Regulations alongside other legal provisions in both civil and criminal, and common law and statute is more effective today than at any other time in history.

However, that is not to say that protection is perfect. It is far from it. There are numerous flaws in the current law, and some major criticisms can be levied against the modern-day consumer protection measures. There is clearly much room for further development, improvement and fine-tuning. As discussed, concepts within both the 1987 and 1979 Acts are unhelpfully ambiguous, and the maximum penalties imposed by the 2005 Regulations represent an inadequate deterrent in practice. If these issues could be addressed consumers would not merely be adequately protected, they would be well protected.

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