Legal Analysis Of Fire Incident And Product Liability In Essay.

a) You are a Trading Standard Officer in Pontyberry. Please advise any possible actions you might take against XO.com and COOLPOINT.

b) You work in the Citizen Advice  bureau. Advise Ismail as to any product safety claims he might have in regard to the damages caused by his COOLPOINT fridge-freezer.

c) You are a lawyer representing some of the affected citizens in this fire. Advise Ismail regarding collective action against XO.com, COOLPOINT and WHITEHOUSE.

In the given case study, several issues are involved. The primary issues being whether Ismail can claim any action against COOLPOINT.

This issue can be solved by discussing the provisions of Consumer Protection law. The English Consumer Law under Part 1, states that every company should follow a mandatory safety standard for its product. It is required that every company should compulsorily include safety information on their products to supply legally the product in the market. Every product must comply with the mandatory safety standards, non-compliance of which can be considered as an offence. It is reasonably necessary to maintain safety standard for a company to reduce or prevent the risk of injury that a person might get while using their product. If dealing with a defected product the user gets an injury, the company shall be liable for the negligence. The Part 3 of Consumer Rights Act established a Competition Appeal Tribunal which has provided a remedy for breaches of mandatory standards including legal cost, penalties, injunctions, administrative action, corrective advertising and others. It has also has provided that a manufacturer of a product can be held liable for the product liability. It is the right of the consumer to seek compensation from the manufacturer for supplying a product that has caused loss or damage to a person. Loss or damage may include, causing injury or death to a person making the claim or to another individual and causing any economic loss by damage or destruction of another good, building, land or a fixture. A consumer who has suffered loss or damage because of a defect in the goods can take the manufacturer to the court, and make a complaint to consumer protection agency. In an action where the consumer has succeeded against the manufacturer, the Court will impose compensation. The Consumer Rights Act 2015 imposes direct liability upon manufacturers to compensate loss or damage of a consumer. In the landmark case of Donoghue v. Stevenson, the liability of the manufacturer for the product which he sells was identified. A manufacturer owes a duty to take care towards the consumer for the liability of his product.

In the given case study, COOLPOINT is responsible for the spread of fire, which caused the death of the people who were residing in the building. There was 250 incident where because of the defect in the product the fridge-freezer was caught on fire. The company remained unconcerned even after knowing the previous incidents of injury, which were not at all small in number. They ignored the defect they had in the fridge-freezer, which resulted into burning down of the building causing death to 100 people. Ismail can sue COOLPOINT under the Part 1 of Consumer Rights Act, which provides that supplying goods or services without complying the mandatory standard is an offence under the Act, which may result into imposing a fine on the corporation of up to $1.1 million. In Queensland Office of Fair Trading v Xiao Zhu [2013] MAG–211484/12(8), the company was fined with $60,000 and a conviction was also recorded for breaching the safety standards. Some of the products of the company were also banned and the Director of the company was fined individually. In US, the holding company WHITEHOUSE was restricted from using plastic back panel for their fridge-freezer, which has a tendency to catch fire. Additionally, the COOLPOINT was aware that there are 250 cases which had resulted in injury. Being aware of the fact, they did not correct the defect in the refrigerator. The death of the people had resulted from the negligence of the manufacturer.  The incident was foreseeable by the manufacturer, for which Ismail can sue the company. An action can be taken against the company claiming monetary and non-monetary damages. Punitive damages can be claimed because of the contumelious act of the company disregarding the previous incidents of harm suffered by 250 consumers.

Relevant Laws

Conclusion

From the above discussion, it can be concluded that, Ismail can sue COOLPOINT for damages for their negligence that caused burning down of the building and death of the people.

The secondary issues that is involved in this case is whether Ismail can bring an action against XO.COM for not taking reasonable care to his complaint and not reporting the foreseeable incident to the consumer and the company.

The solution lies in the provisions of Consumer Rights Act, which provides that the supplier of consumer goods and services should exercise reasonable care and skill, and also report the injuries, damages or deaths associated with the goods and services. All the participants within the supply chain are required to inform the reportable incident to the company.

The issue can be solved by applying the provisions that it is the liability of the retailer to know every detail about the product he sells. He should always convey to the customers, all the necessary information of the product which he is selling to him. Ismail had informed the online retailer XO.COM about the smell and noise that the refrigerator was making after five days of purchasing it. Retailer had no proper idea about the extent of the kitchen of Ismail, and for his negligence the fridge-freezer caught fire. The customer service of a product is expected to look at a defect with serious concern, which can cause damage or injury to a person. The situation was reasonably foreseeable by the retailer as there were already 250 similar incident happened in UK. Even after informing the customer service about the default, they remained unchanged about consequences. Ismail can claim compensation for losses and damages he had suffered due to defective nature of the refrigerator. XO.COM is liable for the negligence for not reporting the fault in the products to the company. It was the duty of the customer services of XO.COM to take reasonable care for the complaints made by the consumer.

Conclusion

From the above discussion, it is apparent that Ismail can sue the retailer, that is the XO.COM for not taking reasonable care after receiving the complaint about the defect from the consumer.

The issue which revolves around the case is whether Ismail can have any right to claim for product safety.

The English Consumer Law is developed to protect the consumer against the any damages and injuries he might have suffered because of the safety defects in the product. The law covers requirement related to safety standards, warning notices, bans and mandatory reporting. When there is a defect or problem with the goods or services delivered, the company is liable to inform and take reasonable care for it. If the retailer is informed of any foreseeable incident that might injure or cause damage to anyone, he is ought to inform the company and the consumer about it. Giving false or misrepresenting safety information about a product shall be considered unfair business practice. The aim of the provision of the Consumer Rights Act is to protect the consumers from the unfair trading and entitling them of a right to claim damages for the injury or loss he has suffered. The Act in its Part 3 empowers the local authorities with investigatory power. To protect the interest of the consumer, liability for the safety of the product shall be imposed on the company and the supplier. Product-related services such as, installation, maintenance, repairing is the liability of the customer services and they are also liable for complying with the consumer product safety requirements. It requires that the suppliers in supply chain, that is the manufacturers, wholesalers and retailers should be aware with the law and comply with the standards. A broad range of remedies from compensation to injunctions are available to the claimant under Part 1 of Consumer Rights Act. Part 3 of the Consumer Rights Act entitles a consumer to damages from the manufacturer or supplier relating to consumer guarantees which has been purchased online. In the case of Heneghan v Manchester Dry Docks Limited [2016] EWCA Civ 86 it was established that proper apportionment of liability should be considered on the basis of the participation of the defendant in the risk which has developed. In the judgment of Hufford v Samsung Electronics (UK) Limited [2014] EWHC 2956 (TCC) Section 3 of the CPA was applied, and it was stated that claimant must prove that the product was defective to make the manufacturer held liable.

Application

In this given case study, Ismail can make product safety claims from the COOLPOINT company as he had monetary and property related damages because of the explosion of their product. There were similar 250 incident which were reported but the company did not take any action to make any change and avoid the injury. The incident which had happened was not sudden but predictable to the company. The XO.COM was also liable for happening of this incident because of their ignorance in the informed defect. Product safety claims can be made to the customer service of XO.COM. Ismail can sue COOLPOINT for this damage caused to him for the defect in their product. He can take a legal action against the company and seek compensation for the damage. Ismail can also take an action against XO.COM and sue them. They are also responsible for the loss Ismail has suffered for their negligence towards the report of malfunctioning of the refrigerator and are liable to pay damage to Ismail.

Conclusion

From the aforesaid discussion, it can be observed that, Ismail can bring an action against the COOLPOINT and the XO.COM and make product safety claims for the incident that happened.

The issue which in involved in this case is, whether a collective action can be brought against the COOLPOINT, XO.COM and WHITEHOUSE by Ismail and the affected citizens.

This issue can be solved by understanding the law related to collective actions in English consumer law. A collective action is brought by one representative plaintiff on behalf of the class numbers to be parties in the proceedings.The Civil Procedure rules provided representative action in Consumer Rights Act. In the case of Emerald Suppliers the High Court held that after considering the question of liability the nature of interest can be determined. An action brought by seven or more people having a claim against the same person can be considered as a class action. The claims should arise out of the similar circumstances and must have one common issue of law or fact. It can be brought by a single representative of the class who is the applicant in the proceeding. Damages as to bodily injury can be claimed by a collective action under the English Consumer Law. Section 81 and Schedule 8 of the Consumer Rights Act deals with concurrent interest of parties in a proceeding. In the case of Dorothy Gibson v Pride Mobility Products Limited (Case No. 1257/7/7/16) and Walter Hugh Merricks v MasterCard Incorporated & Others (Case No. 1266/7/7/16) the process of collective action was tested. These cases provides a guidance on the class action proceedings before the CAT. Under the English law, claim can be brought by a selected representative of the group. It also provides that the idea of collective action is to overcome the rule that one cannot bring a damages action on behalf of another. When the claims of seven or more parties are same against a party, they can commence a proceeding jointly, making a person representing the others.

Conclusion

The law of collective action can be applied in this case, as the other citizens had also faced the same injury because of the defects in the fridge-freezer. This incident of catching fire on the fridge was not a first time incident. There were several other incidents, where the same thing happened. For a proceeding where multiple parties has the same interest against the same party collective action is a regime which is provided in the English law. COOLPOINT did not raise their concern in any of the situation. They were reluctant to use the plastic back panel on the refrigerator. Because of their negligence more than 100 people lost their life and the building was burnt down. In addition to that, they were not strict in their position to inform the consumer about the maintenance of the fridge and failed to advise them to keep the fridge away from the wall. Ismail could, on behalf of the citizens, sue COOLPOINT and claim for damages from them. The ACCC can also issue a ban on their product. A class action was commenced against power distributor SP AusNet and asset managers Utility Services Group on behalf of 10,000 survivors of the Victoria’s 2009 bushfires. It was observed in the case that, over 119 people died in that incident and 1000 houses were destroyed because of the faulty electricity cable which caused KilmoreEast-Kinglake bushfire. A fine of AU500 million was imposed on the defendants.

Ismail could collectively take a legal action on behalf of the 100 people, who were the victim of the incident, against XO.COM. In a recent days, two collective action was brought in the case of Emerald Supplies Ltd v British Airways plc [2010] EWCA Civ 1284. The same interest was demonstrated in this case to be of the same nature in every stages of the proceeding, not at the date of judgment at the end. He also said, Interest of justice should point to the proceedings which are being heard together, to reduce the costs and evade the chance of inconsistent judgments.  XO.COM was the retailer of the COOLPOINT fridge-freezer to which Ismail informed the issue that the refrigerator was making after 5 days of purchasing it. They were not concerned about the size of the kitchen that Ismail had. Additionally, when Ismail informed the customer services about the defect in the refrigerator, they did not take any proper action. It was their duty to take concern of the complaint and report the defect to the company, and provide a proper assistance to Ismail. If the customer service had taken into consideration the seriousness of the situation, the incident of fire could have been avoided. The negligence in their duty cost 100 people to lose their lives. The building was also burnt down because of their lack of care. Under the Consumer Rights Act 2015, Ismail can take a class action against XO.COM on the behalf of the person who were in the building and lost their livesat the Competition Appellate Tribunal.

Ismail can seek a collective action against WHITEHOUSE, which is the holding company of COOLPOINT. The phenomenon was foreseeable by the holding company, as it was situated in US, where using plastic back panel for a fridge-freezer was expressly prohibited. It was the liability of the WHITEHOUSE to conduct a proper check on its subsidiary company and take report of incidents which was the result of a breach of such prohibition. There are certain situation, where the parent company is liable for the negligence of the subsidiary company. In a recent case of Chandler v Cape plc, there was a negligence on the part of the subsidiary company in connection to an asbestos business. The parent company was held liable for the breaches of laws regarding health and safety by the subsidiary company. The Court held that, in such situation, holding companies shall be responsible for the negligence of subsidiaries without the need of lifting the corporate veil. Similarly, in this case WHITEHOUSE shall be liable for not instructing the subsidiaries company to maintain the health and safety regulation. The outrageous event would not take place if WHITEHOUSE had acted with responsibility. They did not consider the previous 250 similar events. This incident is the result of their wilful avoidance of the liabilities towards its subsidiary company. On behalf of the citizens, who faced the same incident and the person who were died in that incident, Ismail can make a collective claim against WHITEHOUSE. Ismail can claim damages on behalf of the citizens by an order of the Court.

Conclusion

Therefore, from the above discussion, it can be concluded that Ismail is in such a legal position that he can take collective action against WHITEHOUSE, COOLPOINT and XO.COM.

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