In our ever-evolving consumer-driven society, products of various kinds have become an integral part of our daily lives. From the most mundane household items to cutting-edge technological marvels, we rely on a vast array of products to meet our needs, simplify tasks, and enhance our overall well-being. However, as consumers, we also place implicit trust in the products we purchase, assuming they are safe, reliable, and free from any potential harm. Unfortunately, this is not always the case, as defective and dangerous products can pose serious risks, resulting in injuries, financial losses, and even loss of life.
It is against this background that this piece aims at examining the concept of product liability viz-a-viz the class action against automobile giants, Hyundai and KIA.
WHAT IS PRODUCT LIABILITY?
Product liability refers to a manufacturer or seller’s liability for any damage or injury suffered by a buyer, user, or bystander as a result of a defective product.[i]Also termed manufacturer’s liability, product liability connotes the legal theory by which liability is imposed on the manufacturer or seller of a defective product.[ii]
The doctrine gained prominence in the 1916 case of Macpherson v. Buick Motor Co[iii]where the New York Court of Appeal held that the manufacturer of any product capable of serious harm if incautiously made owed a duty of care in the design, inspection, and fabrication of the product, a duty owed not only to the immediate purchaser but to all persons who might foreseeably come into contact with the product.
Where a consumer has suffered damages owing to the use of a defective product, a product liability action can be instituted against the manufacturer of such product.
A PRACTICAL EXAMPLE: THE CASE AGAINST HYUNDAI AND KIA
A class action was filed against automobile giants, Hyundai and Kia owing to allegations of failure to equip their 2011-2022 vehicle models with an immobilizer, a common antitheft device in modern cars that prevents most vehicles from being started unless a code is transmitted from the vehicle’s smart key.[iv] The lack of the immobilizer in affected vehicles spawned viral “Kia Challenge” TikTok videos demonstrating simple measures “Kia Boys” take to steal affected Hyundai and Kia vehicles using only a common USB charging cord or similar metal object to start the engine. The said challenge resulted in a spike in theft of Hyundai and Kia cars as a result of which several affected customers instituted the class action against Hyundai and Kia.
According to the lawsuit, in addition to the lack of an immobilizer, design flaws in the affected vehicles also allow thieves to steal them in less than 90 seconds. The lack of adequate security in the steering columns allows easy access to the ignition assembly, while the ignition cylinders do not have a locking mechanism and can be easily removed with minimal force.[v]
The class-action lawsuits filed nationwide against the automobile giants have been consolidated into multidistrict litigation as in Re: Kia and Hyundai Vehicle Theft Litigation, MDL No. 3052. Although Hyundai and Kia have reached a settlement valued at over $200,000,000 (Two Hundred Million Dollars) with the affected car owners, the need for manufacturers to be diligent before making such products available to the public cannot be over-emphasized.
CAN A CONSUMER INSTITUTE AN ACTION FOR PRODUCT LIABILITY AGAINST A MANUFACTURER IN NIGERIA?
Yes, a consumer of a deficient goods, service, or product can hold the manufacturer liable in the event the said product, goods or service is defective as to occasion harm to the consumer. Consumer protection in Nigeria is regulated by the Federal Competition and Consumer Protection Commission (FCCPC).
Under the Federal Competition and Consumer Protection Act, of 2018, a manufacturer or facilitator of defective goods will be liable to the consumer of such defective goods. This is aptly captured by Section 136 (1) of the FCCPA as follows:
“Where damage is caused wholly or partly by defective goods or the supply of a service, the undertaking that supplied the goods or service is liable for the damage.[vi]
The purport of the above if related to the Hyundai and Kia’s case would mean that the companies would be liable for the losses suffered by the vehicle owners for the defect (absence of the anti-theft device) in their products. That is to say, in as much as the consumer suffers some damage as a result of the product, (either personal damage or damage to the defective product), the manufacturer will be liable. This is aptly captured under Section 136 (2) and (3) of the FCCPA as follows:
“For the purpose of this Act, damage includes personal injury and damage to the consumer’s property.[vii]
An undertaking that supplied the defective goods or service is liable whether or not the user or consumer bought the goods or service from or entered into any contractual agreement with the undertaking.”[viii]
Based on the above, a person affected by a defective goods, product, or service can legally make the owner of such product liable for the damage suffered. Section 136 (4) aptly covers this as follows:
“A person affected by the defective goods or services has the right to sue under this section”[ix]
Flowing from the above, manufacturers and suppliers of goods, products, and services have to do the proper checks before issuing such products out for final consumption. Also, consumers of defective products can hold the producers liable where the use of a defective product has occasioned harm to them.
POTENTIAL FOR STATE-SANCTIONED LAWSUITS AGAINST THE MANUFACTURER – THE SUIT BY THE STATE OF NEW YORK V. HYUNDAI AND KIA
In a related move, the state of New York has filed a 39-page lawsuit with the United States District Court in the Southern District of New York against Hyundai and Kia on grounds that the absence of an anti-theft immobilizer technology in certain models of their cars has led to a rise in the cases of car theft within the state with the attendant impeding of public safety, straining of the police department resources as well as negatively impacting other emergency responses within the state.
The suit, which was filed in June 2023, seeks punitive and compensatory damages, attorney’s fees, compensation for economic loss, and abatement of public nuisance among others against Hyundai and Kia. This follows other suits filed by the states of Ohio, Wisconsin, and Maryland following a surge in the theft of Hyundai and Kia cars.
The purport of the above is that the extent to which manufacturers will be liable for defective products is not limited to individual or class actions by consumers. In fact, it could also extend to the state bringing an action against the manufacturer of the defective product where the defect in the product is exploited leading to a breakdown of law and order, non-safety in the state, riots, commotion, increased crime rate as well as non-safety in the state among others.
Manufacturers and distributors of products are not only enjoined to do proper due diligence before putting out the products for final consumption but must also take appropriate measures to ensure such use does not negatively impact society.
WHAT ARE THE REMEDIES AVAILABLE TO A CONSUMER?
Highlighted below are remedies available to a consumer of a defective product
- Class Action Lawsuits: Just like in the case against Hyundai and Kia, where a large number of consumers have been affected by a defective product, a class action lawsuit may be filed. In a class action, a group of individuals with similar claims collectively sues the manufacturer, distributor, or seller. If successful, the damages awarded are distributed among the class members.
- An Action in Tort for Negligence: Where a consumer can prove that the manufacturer failed to exercise reasonable care in designing, manufacturing, or warning about the product’s dangers, an action may lie in damages against such manufacturer.
- Product Liability Lawsuits: Consumers have the right to file a product liability lawsuit against the manufacturer, distributor, or seller of the defective product under the FCCPA provided the use or consumption of the product has occasioned damages on them.
- Insurance Claims: In circumstances where the consumer has insured the defective product under product liability insurance, such a consumer may be able to seek compensation under the insurance policy.
- State-Sanctioned Actions: A state or city where the ripple effects of the use of a defective product are manifest can bring an action against the manufacturer of such product to make them liable for the harm done to the city or state as a result of the use of such defective product.[x]
Product liability is a critical aspect of consumer protection that holds manufacturers, distributors, and sellers accountable for the safety and quality of their products. It serves as a necessary safeguard against potential harm caused by defective or dangerous products, providing consumers with legal recourse and encouraging businesses to prioritize safety in their manufacturing processes. While the product liability landscape is not very popular in Nigeria, manufacturers of defective products can be held liable where there are defects in the products issued for public consumption.
[i] Bryan A. Garner, Black’s Law Dictionary, Seventh Edition P. 1225
[iii] (217 NY 382), 111 N.E 1050 (1916)
[vi] Section 136 (1) of the FCCPA
[vii] Section 136 (2) of the FCCPA
[viii] Section 136 (3) of the FCCPA
[ix] Section 136 (4) of the FCCPA
[x] A typical example of this is the action brought against Hyundai and Kia by the City of New York in the United States
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