If your business is involved with the manufacturing, distribution or retailing of products, it’s important to have an understanding of how the law works so that you know what to do if your company is faced with an action against it for the supply of a defective product. In this article, our business dispute solicitors will explain the most important considerations if this happens, and offer practical suggestions and strategies to help you handle a product liability claim.
If you are reading this article because your business is facing a product liability claim, our experienced business dispute solicitors are here to help. We’ll provide clear, practical advice to protect your business, manage the claim efficiently and reduce the risk of disruption to your businesses operations.
Jump to:
- When is a product classed as defective?
- Who can be held liable if a product is defective?
- What are the main types of product liability claims?
- What are the defences for a product liability claim?
- What damages can be claimed?
- Are there time limits for bringing a product liability claim?
- Responding to a product liability claim
- The importance of having a joined up strategy
- Summary
When is a product classed as defective?
A product liability claim arises when a product causes injury, property damage or financial loss because it is defective. The test for defectiveness is deceptively simple: would the average person think the product was as safe as they were entitled to expect? The answer depends on how the product was designed, manufactured and marketed, and on whether the risks were properly communicated.
A product may be considered defective because of its design, the way it was made, or the information provided with it. If an electric tool lacks a key safety feature, or a household appliance overheats in normal use, it may fall short of that standard. Even the wording of a user manual or safety label can make the difference between a defensible product and a defective one.
Courts will consider the product’s presentation, foreseeable use, and when it entered the market, recognising that safety standards evolve over time. What was acceptable a decade ago may not pass scrutiny today.
Who can be held liable if a product is defective?
One of the most common misconceptions about product liability is that it only affects manufacturers. In reality, liability can reach anyone in the supply chain who plays a part in bringing the product to market. This includes importers, component suppliers, assemblers and sometimes even retailers or distributors, particularly where the manufacturer can’t be identified.
Take, for example, a UK business that imports and sells consumer electronics under its own brand. If a batch of products causes harm, that business is legally treated as the producer, even if it didn’t physically make the goods. Similarly, a company that adds its name or trade mark to a product can be considered a producer.
In practice, this means your exposure depends not just on what you make, but on the degree of control and knowledge you have within your supply chain.
What are the main types of product liability claims?
The Consumer Protection Act 1987 (CPA) introduced strict liability, making it easier for injured parties to claim compensation without having to prove negligence. The law recognises that consumers can’t always uncover how a product failed, so responsibility sits with those best placed to prevent harm in the first place. Injured parties still have to prove that a product was defective and that any injury or damage was caused by the defective product.
Negligence based claims, by contrast, require proof that the business fell below the standard of care expected in design, manufacturing or quality control. These cases often turn on evidence: design documentation, testing results, and whether known risks were addressed.
Finally, breach of contract or warranty claims arise when a product fails to meet the terms of sale or a guarantee. These are especially relevant for B2B relationships, where contractual wording on liability, warranties and indemnities can determine who bears the loss when things go wrong.
Understanding which of these routes applies in a given case helps businesses plan their response and assess how well their contracts and insurance actually protect them.
What are the defences for a product liability claim?
If a claim does arise, there are several possible defences, though their success depends heavily on preparation and documentation. A business might argue that the claimant misused the product or ignored clear warnings, or that the product met all applicable safety standards at the time it was supplied.
Another defence, known as the “development risks” defence, applies where a defect couldn’t have been discovered given the state of scientific or technical knowledge at the time. This is often relevant in fast-moving industries such as pharmaceuticals or technology, where new materials or designs are used before long-term risks are fully understood.
Sometimes, the chain of causation is broken by someone else’s actions, for example, if a retailer stores a product improperly or an end user modifies it. In all cases, the strength of a defence depends on records: test data, safety audits, correspondence with suppliers, and documented compliance procedures.
What damages can be claimed?
What can be claimed by way of damages depends on whether the claim is a claim for negligence, breach of contract or a claim under the CPA.
Under the CPA, it’s only possible to recover damages for death, personal injury or damage to private property over £275. Claimants can’t claim for any damage to the defective product itself.
In general terms, damages for negligence are designed to put the claimant back in the position they would have been in if the negligence hadn’t occurred, and in breach of contract cases, damages are intended to put the claimant back in the position they would have been in if the contract had been performed.
Are there time limits for bringing a product liability claim?
Claimants generally have three years from the date of injury or damage, or from when they first became aware of it, to bring a claim. There’s also a ten-year “longstop”, meaning no claim can be made more than ten years after the product was first placed on the market.
In negligence or contract claims, the period is usually six years from the date of breach or damage. These time limits make systematic record-keeping important. Without clear documentation showing when a product was sold or manufactured, it can be difficult to rely on limitation as a defence.
Responding to a product liability claim
When something goes wrong, the speed and coordination of your response can make all the difference. A well-handled incident can prevent a concern from spiralling into a product liability claim. A poor one can inflame tensions, invite scrutiny, and damage customer trust.
The first step is always containment and clarity. Identify exactly what’s gone wrong (review the complaint and any supporting documentation), which product line, batch, or component is affected, and stop any further distribution immediately. If possible, quarantine existing stock, and isolate materials awaiting shipment and consider whether to initiate a product recall. Then start documenting everything. Every email, test result, complaint and sample matters. Even if the incident seems minor, the detail you record now may be helpful later when reconstructing what happened.
If your business already has an incident response plan, now is the time to activate it. If you don’t, create one as soon as possible, because the early hours after discovery are critical. Assign clear roles: who’s managing communications, who’s handling technical investigation, who’s liaising with insurers and legal advisers. Without clear ownership, important details can be lost or miscommunicated, and small missteps at this stage can have long-term consequences.
Once immediate safety concerns are addressed, your focus should shift to communication and preservation. Internally, make sure every relevant department, from quality control to finance, understands the situation and knows not to destroy or alter any documents, samples or digital records. Externally, tread carefully. Avoid admitting liability or speculating on causes until you have gathered all the facts. This is where the help of experienced business dispute solicitors can be invaluable. They will guide you on how to engage with customers, regulators and media without compromising your legal position. The tone of those early conversations often sets the stage for how the entire issue unfolds.
Insurance should never be an afterthought. Notify your insurer at the first sign of a problem, even if you are not yet sure a claim will follow. Most product liability policies require prompt reporting of incidents that could lead to a claim, not just confirmed ones. Waiting until you have all the facts might seem sensible, but late notification can jeopardise cover altogether. Your insurer may also provide access to technical experts or crisis-management specialists, resources that can help you control both the practical and reputational impact of the issue.
At this stage, one of your biggest assets is documentation. Courts, insurers and regulators all rely on evidence, not memory. They will expect you to produce a clear paper trail showing how the product was designed, manufactured, tested, and distributed, along with supplier correspondence and quality assurance data. Gaps in records can weaken even the strongest factual defence.
Good documentation is not just about retention, it’s about accessibility. Keeping years of design files in storage won’t help if you can’t find the version that actually went to market. Your systems should allow you to trace each product’s journey, from concept to customer, quickly and reliably. And where an issue may lead to litigation, you should immediately implement a litigation hold, suspending any routine data destruction for relevant materials. This ensures evidence isn’t accidentally deleted or lost.
If a claim progresses to litigation, organisation and foresight become even more important. Product liability cases often involve technical complexity and extensive disclosure. You will need to provide all relevant documents, cooperate with expert witnesses, and prepare evidence that explains not only what went wrong, but how your systems were designed to prevent it. This is where the groundwork you have laid, detailed records, prompt notification, a coordinated internal response, pays off.
Many disputes are resolved long before reaching court. Early settlement discussions, often guided by insurers, can save time, cost and reputation. Your legal team will assess the strengths and weaknesses of your position, advise on negotiation tactics, and manage correspondence with the claimant’s representatives. The aim is to achieve a resolution that is fair, commercially sensible and, wherever possible, confidential.
That said, some cases do proceed to trial. When they do, you will need legal advisers experienced in both litigation strategy and the technical aspects of product liability. They will work with experts to analyse the root cause of the defect, prepare witness statements, and test the claimant’s evidence through cross-examination. Their goal is to protect your business, not only by defending the claim, but by minimising disruption so you can continue operating confidently throughout the process.
Ultimately, responding to a product liability incident isn’t just about legal defence. It’s about business continuity and reputation management. A transparent, measured and well-coordinated response sends a powerful message to customers, regulators and investors: that your business takes responsibility seriously, learns from setbacks, and is committed to doing the right thing.
The importance of having a joined up strategy
Product liability management isn’t just a legal exercise, it’s a commercial strategy. The best results come when your operational, legal and insurance teams work together. Early engagement with your insurer ensures your coverage reflects your actual activities and markets. Regular legal reviews of contracts and supplier agreements help ensure risk is fairly allocated and defensible.
The companies that navigate product liability issues best are those that treat them as a cross-functional responsibility. They don’t wait for a crisis to test their systems; they design those systems to prevent one.
Summary
It is clear that there is a need to act quickly and in a structured way when your business is faced with a potential product liability claim. Having the right policies in place and being proactive are important, as is training your staff thoroughly so as to minimise the risk of any errors being made that might jeopardise your company’s position.
Our team of specialist business dispute solicitors have a wealth of experience in this technically complex area, and are able to provide the right advice tailored to the needs of your business. wealth of experience in this technically complex area, and are able to provide the right advice tailored to the needs of your business.
