Page 39 - Insurance Times December 2020

vs Govind Lal Sahu & Others III (2008) CPJ 89 NCDRC & Mrs. There is no further need to prove that a manufacturer/
Rashmi Handa, & Ors v OTIS Elevator Company (India) Ltd supplier was negligent. However, the consumer shall not
& Ors I (2014) CPJ 344 (NC) In Tata Motors vs Rajesh Tyagi have any defence available if they have modified, altered,
and HIM Motors Show Room-II (2014)(1) CPC267, the misused the product or failed to follow the security and
NCDRC held that: warning instructions.
"We have also taken a view that onus shifts to the
manufacturer to show that the vehicle does not suffer from Product Liability Insurance needs of the
manufacturing defect once the complainant has proved and hour?
discharged the initial onus that the vehicle was defective The product liability insurance policies shall indemnify the
on the basis of large number of job cards showing that insured against their legal liability to pay compensation
vehicle was taken on many occasion for removing one defect including legal expenses of claimants in accordance with the
or the other. goods sold to the consumer is not only defective law of the land. Most product liability policies shall exclude
but also suffers from manufacturing defect." settlements made in countries that operates under the law
of US & Canada.
The action for product liability can be invoked under CPA
2019 against manufacturer/ supplier if the Product is Product liability policies are a specific form of general liability
defective and/ or consumer is charged excessively and/or policies which meant to protect from financial & legal
there are unfair trade practices by the trader. consequences which might be caused by bodily injury,
property damage to third party while using the product.
In order to file a claim under liability, it is mandatory to prove There are always chances for something to go wrong and
that product was defected and these defects made the manufacturer or suppliers may be vicariously held liable to
product harmful and caused damages. The defects can be own up the damages. This may give rise to a legal dispute.
categorized broadly in three categories which may give rise Although one may want to fight back and may win the case
to manufacturer or supplier liability. but the legal expenses to win the battle might be very high.
Thus product liability insurance may protect against any
Design Defects - The defects are caused at the planning claim made by the customer arising due to injury caused by
phase itself even before the manufacturing. Such defects the use of the product.
make the product inherently unsafe.
Usually, it is assumed that liability policies should be owned
Manufacturing Defects - These defects enter in the product by big business houses. Now when the Indian economy is
during the manufacturing or assembling of the product. thriving and society is becoming litigious with the awareness
of one's rights, easy access to various redressal forums, the
Marketing Defects - inadequate safety warnings, inadequate time has come when every business houses including startups
or incomplete instructions, improper labeling etc. are should consider owning a product liability insurance. A small
marketing defects. baker, boutique owners, florists, wholesalers, restaurants,
food stores can have liability policies to cover themselves
Once the consumer has decided to raise the issue the
following doctrines shall come to the aid of the consumer.

Res ipsa loquitur (Latin: "the thing speaks for itself") is a
doctrine in the Anglo-American common law which shifts the
burden of proof to the defendant(s). It means if the doctrine
invoked effectively, the consumer has not to establish but it
shall be the defendant(s) to prove in the court of law that it
was not negligent.

Another rule which becomes handy to plaintiffs (consumer
in relevance to CPA 2019) in product liability cases is the
doctrine of strict liability. If strict liability applies successfully,
the plaintiff needs to prove that product was defective.
The Insurance Times, December 2020