III. Liability according to the PHG[5]
The PHG, applicable to cases in which the product has been brought into circulation after the PHG itself came into force in 1988[6], imposes liability without fault[7] on the producer of a defective product which has been put into circulation and which has caused damage to person or property[8]. A product according to the PHG, means all movables; it is a movable and tangible object[9]. A product is stated to be defective if it fails to provide the safety one is entitled to expect taking all the circumstances into account. This safety refers to the general presentation of the product, to the use to which it could reasonably be expected that the product would be put and applies from the point in time the product was put into circulation[10].
Liability without fault is imposed for damage resulting in death or personal injury (compensation according to the respectable rules of the ABGB of §§ 1325 ABGB) and damage to property, but not including damage to the defective product itself[11]. Compensation for property losses according to the PHG can be claimed for damages over a threshold of Euro 500 only, which is the only such lower threshold in Austrian tort law. It is furthermore excluded if it was sustained by an entrepreneur who has used the product mainly within his own enterprise[12].
A product liability claim can be brought against the producer who put the product into circulation and against the importer, who is defined as an entrepreneur who imported the product into the European Economic Area and put it into circulation[13]. The producer is one who has either manufactured the finished product, the raw material, a component part or any person who, by putting his name, trademark or other distinguishing feature on the product presents himself as the producer[14]. If the producer or the importer cannot be identified the entrepreneur that put the product into circulation can be held liable if he does not, within reasonable time, name the producer or importer or the person who supplied him with the product[15]. The producers and importers are required to maintain appropriate funds for potential compensation payments e.g. through insurance[16]. In order to avoid liability, the producer or importer has to prove that he has not put the product into circulation or has not acted as an entrepreneur[17]. It is also a defence if, having regard to all the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation[18].
Liability can be reduced or disallowed, if the claimant herself (or someone within her sphere within the meaning of vicarious liability) was at fault[19]. If more people are liable, they are held jointly and severally liable. Liability according to the PHG[20] is excluded if the state of technical and scientific knowledge at the time the product was put into circulation was not such as to enable the existence of a defect as defined within the PHG. Furthermore liability is excluded in cases in which the defect is due to compliance of the product with mandatory regulations issued by public authorities[21]. Last but not least it is excluded if - the accused party having produced raw material or component part of a product only - the defect of the product was caused by the design of the product (into which the ground material or part of the product were fitted in to) or by the instructions provided by the producer[22]. The liability to indemnify cannot be excluded or reduced preliminarily[23]. A claim under the PHG is subject to a limitation period of three years and expires 10 years after the product has been put into circulation[24].
Austria therefore excluded liability for development risks - a possibility provided by the Directive - and means that liability is excluded if the product cannot be considered to be defective according to the PHG considering the state of the technical and scientific knowledge at the time the product was put into circulation[25]. Furthermore the threshold of liability proposed in Art. 16 of the Directive was not adopted[26].
5. Note that an expert commission recently presented a proposal for a reform of the law of compensations in the ABGB, integrating the PHG into the ABGB. For further details see Griss/Kathrein/Koziol [Hg], Entwurf eines neuen österreichischen Schadenersatzrechts (2006); Griss, Der Entwurf eines neuen österreichischen Schadenersatzrechts, JBl 2005, 273.
6. § 18 PHG.
7. Explicitly § 8 PHG.
8. § 6 PHG defines putting into circulation as giving the legal power of disposition or usage to another person.
9. § 4 PHG. Even if connected to another movable or unmovable object. The definition includes energy.
10. § 5 PHG.
11. § 1 PHG.
12. § 2 PHG.
13. § 1 Abs 1 PHG. The importer is defined more explicitly in § 17 PHG.
14. § 3 PHG.
15. § 1 Abs 2 PHG.
16. § 16 PHG.
17. § 7 Abs 1 PHG.
18. § 7 Abs 2 PHG.
19. § 11 PHG. According to § 1304 ABGB.
20. § 8 Z 2 PHG.
21. § 8 Z 1 PHG.
22. § 8 Z 3 PHG.
23. § 9 PHG.
24. § 13 PHG.
25. EB 272 BlgNR 17. GP 4.
26. EG 85/374 EWG. "Any Member State may provide that a producer's total liability for damage resulting from a death or personal injury and caused by identical items with the same defect shall be limited to an amount which may not be less than 70 million ECU".
