Lovells

One year on from the UK introduction of the European Product Safety Directive the number of dangerous and recalled products reported to the European Commission is at an all time high, according to analysis of latest EU data by the law firm Lovells.  The new consumer product safety laws, which include provisions for product recalls, have had a significant impact on the number of product recalls being publicised in the UK and the EU generally. 

The Directive first came into force in the EU in January 2004 bringing in tougher measures to deal with dangerous products on the market, and provisions to prosecute those responsible for placing them there.  It affects manufacturers, distributors and retailers of consumer products ranging from motor vehicles and boats through to cosmetics, toys and electrical products. 

The figures show: 

The EU-wide number of dangerous and recalled products reported on a week-by-week basis since the Directive first came into force is continuing to increase.  The rate of notifications of dangerous products this year is up 25% on last year's average.   In the UK, so far this year the authorities have published notices concerning 80 product recalls (over 2 per week).

China has by far the highest number of product safety notifications, with nearly 50% of all notifications in the last eighteen months concerning products from China. 

Toys received the most product safety notifications with 26% of the total share.  The next highest was electrical goods with 23%, followed by motor vehicles with 8%.

Rod Freeman, Product Liability partner at Lovells, said:

"The trend for increasing product recalls continues to climb sharply - with no sign yet of levelling off.  Producers are becoming more aware of their obligations under the new laws, and enforcement authorities are increasingly active in intercepting dangerous products in the supply chain.  This will continue.  The inevitable next step is that we will start to see the enforcement authorities begin to prosecute high-profile companies that breach the product safety laws.  This will take the impact of the laws to a still higher level, as has been the experience in the US. "China is emerging as a particular area of focus for tackling product safety.  The Commission has implemented a series of initiatives to deal with the safety standards of products of Chinese origin, and has just announced a co-operation agreement with China on the enforcement of food and product safety which is a significant development."

The new product recall laws place a particularly heavy burden on manufacturers who sell their products throughout the EU.  At a practical level, where a manufacturer has a reputation in the marketplace that it wants to protect, there is a need to liaise with local authorities in all countries in which the product has been marketed.  Failing to comply with the Regulations in the UK can lead to a fine and/or three months in jail as well as huge risk of adverse publicity. 

Freeman added:  

"From our experience, attitudes of enforcement authorities in Europe are still developing,  and differ from country to country.  These differences, and the uncertainty that  accompanies it, place a significant burden on product  manufacturers.  "All manufacturers and suppliers of consumer products distributed in the EU must make  sure they comply with the new regime.  In the field of product safety, where regulatory  issues can readily spill over into product liability claims, and reputation damage can be  severe, the costs of being caught out by these new laws is high."

Accompany data - Please contact Kate Horsfield

• The number of RAPEX notifications (EU rapid alert system for non-food products reported to the Commission from February 2004 to 15 September 2006.  
• The types of products most commonly the subject of those reports. 
• The country of origin of those products - dominated by China. 

Lovells' product liability practice

Lovells has the largest and most experienced product liability practice in Europe, and has been involved in assisting some of the world's leading consumer product manufacturers from a range of industries in dealing with product recalls and other actions under the new laws, which have been implemented throughout the EU.  The team advised on what is believed to have been the first EU-wide recall under the new regime, and since then has co-ordinated a number of such recalls, including the largest product recall yet undertaken under the Directive,  requiring the co-ordination of simultaneous steps across Europe.

Please click here for accompanying data.