Country:

Austria

Court:

Austrian Supreme Court (OHG), Decision of 05 December 2002,

2 Ob 249/02k

Topics:

Proof of defect

Facts:

The claimant bought a telescopic folding stepladder on 19 December 1999. To position the ladder, the legs needed to be pulled apart at their lower ends, so that the stepladder formed a triangle. The front and rear section of the stepladder were connected with nylon cords which, once the legs were pulled apart, secured the correct positioning of the stepladder and helped stabilise it. The nylon cords were affixed to each of the legs with a small metal rivet.

The stepladder was accompanied by an instruction leaflet which consisted of a picture displaying that the nylon belts should be fully extended before the ladder was use and a note that the maximum permissible load of the ladder was 150 kilograms. The picture also seemed to indicate that the ladder would be unstable if the cords were not fully extended.

On 22 March 2000 the claimant set out to repair a window in his house. He placed the stepladder parallel to the front wall, without ensuring that the two nylon cords were fully extended. As the claimant, who weighed 100 kilograms, climbed up the stepladder, the legs of the ladder suddenly slipped apart. The rivets securing the nylon cords to the legs of the stepladder ripped out of their fastening, the hinge at the top of the ladder broke and the stepladder collapsed. The claimant fell down to the floor and suffered numerous heavy fractures.

Decision:

The Austrian Supreme Court allowed the claimant's appeal and reversed the judgement of the Vienna Court of Appeal.

The Court did not disagree with the assertion that the stepladder was not defectively designed if it did not provide the same level of safety as that provided by more expensive ladders and confirmed that the price of a product was a relevant factor in this context.

However, it criticised the lower courts for failing to establish whether the safer stepladders, namely those equipped with metal supports, would actually lie in a significantly higher price category.

Despite this shortcoming of the finding of facts, the Supreme Court refrained from referring the case back for further taking of evidence as it held that the stepladder in any event contained a warning defect. The Court held that even if consumers could not expect a safer design of the stepladder (a question which the Court did not address), they should at least be told what consequences there might be if the nylon cords were not fully extended before the stepladder was used. The picture accompanying the product, the Supreme Court said, did not "display the full magnitude of the specific risks as impressively as it possibly could" because although consumers may recognise that the stepladder would be unstable if the belts were not fully extended, they would not necessarily know that the nylon cords could rip out of their fastening, or indeed that the ladder could collapse.

The Supreme Court conceded, however, that there was contributory "negligence" on behalf of the claimant, which it put at one quarter.

Comment:

The judgement of the Austrian Supreme Court does not provide a definitive answer to the question of how strong a chair (or a stepladder) has to be. What it does do however, is open a door to a potential different judicial approach to the question of design defects. By confirming that the sound comparison with other products on the market is a valid test to judge the safety of a product's design, the Austrian judges, not for the first time, approve of a concept which will sound most familiar to US product liability lawyers. The American Restatement Third of Torts: Products Liability call this concept the "reasonable alternative design" test. This test asks whether a reasonable alternative design would, at reasonable cost, have avoided or reduced the foreseeable risks posed by the product and, if so, whether the omission of the alternative design renders the product not reasonably safe. The emphasis of this approach is on creating incentives for manufacturers to achieve optimal levels of safety in designing and marketing products whilst, at the same time, encouraging development of novel products.

Many say the revised US guidelines on product liability impose a form of liability that is less "strict" than that under the European Directive. The present case suggests that they are not: the Third Restatement demands more of producers where more is possible (namely a reasonable alternative design) and less where more is not possible (for example, where risks are not reasonably foreseeable, or if there is no safer alternative design). In general, if a product is poorly designed, it does not become a safe product because consumers are informed of the product's deficiencies, or because it is sold more cheaply. The question whether the risk is visible to the consumer is of minor relevance, as is the fact that a product was sold at a cheap price.

The Austrian Supreme Court was obviously not convinced by the result that the defendant should not be liable for this stepladder. However, instead of going right to the heart of problem, which remains the question of whether this stepladder was strong enough, the Supreme Court stopped halfway through refining the European concept of design defects and reverted to the question of warning duties. This allows the claimant to be compensated just as well and is a much easier issue for the manufacturer, who to address it simply has to amend the instructions. And yet there is a small problem with this approach. What if the piece of paper with the instructions gets lost? (Who is going to keep the instructions for the lifetime of a stepladder?) What if someone other than the original buyer uses the ladder, someone who has never seen the instructions?

If that is too practical a thought, there is also a theoretical argument against making the issue one of warning duties. Article 12 of the Directive, which prohibits the exclusion of liability arising under the Directive, shows that there is a limit as to how low consumer expectations can drop as a result of warning, or indeed a lower price. One could argue that, if there is a reasonable alternative design, people are entitled to expect that this design is being implemented. Warnings or a lower price should be no substitutes for a reasonably safe design.

The statement that cheap products require only the "basic level of safety" is not particularly helpful and, compared to the idea of a reasonable alternative design, embodies a rather arbitrary and antiquated concept. Com-petition is a good means of judging the safety of products, and it is also proven way of keeping prices low. The advantage of this approach compared to the "cheap product - basic level of safety approach" is that, by creating competition, one gets value (that is, reasonable safety) for money.