CJEC, 5th chamber, May 29, 1997, No C-300/95

THE COURT (Fifth Chamber),

1 By application lodged at the Court Registry on 20 September 1995, the Commission of the European Communities brought an action under Article 169 of the EC Treaty for a declaration that, by failing to take all the measures necessary to implement Council Directive 85-374-EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (OJ 1985 L 210, p. 29; `the Directive'), in particular Article 7(e) thereof, the United Kingdom has failed to fulfil its obligations under that directive and under the EC Treaty.

2 The object of the Directive is to bring about approximation of the laws of the Member States concerning liability for defective products, divergences in which may `distort competition and affect the movement of goods within the common market and entail a differing degree of protection of the consumer against damage caused by a defective product to his health or property' (first recital in the preamble).

3 According to Article 1 of the Directive, the producer shall be liable for damage caused by a defect in his product.

4 Article 4 provides that the injured person shall be required to prove the damage, the defect and the causal relationship between defect and damage.

5 However, Article 7 sets out a number of defences enabling the producer to avoid liability. The seventh recital in the preamble to the Directive states in this connection that `a fair apportionment of risk between the injured person and the producer implies that the producer should be able to free himself from liability if he furnishes proof as to the existence of certain exonerating circumstances'.

6 Accordingly,

`The producer shall not be liable as a result of this Directive if he proves:

...

(e) that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered;

...'.

7 Under Article 19 of the Directive, Member States were required to take the measures necessary to comply with it by no later than 30 July 1988. The United Kingdom implemented the Directive by means of Part I of the Consumer Protection Act 1987 (`the Act'), which came into force on 1 March 1988.

8 Section 1(1) of the Act is worded as follows:

`This Part shall have effect for the purpose of making such provision as is necessary to comply with the product liability Directive and shall be construed accordingly.'

9 Section 4(1)(e), which purports to implement Article 7(e) of the Directive, provides as follows:

`In any civil proceedings by virtue of this Part against any person ... in respect of a defect in a product it shall be a defence for him to show

...

(e) that the state of scientific and technical knowledge at the relevant time was not such that a producer of products of the same description as the product in question might be expected to have discovered the defect if it had existed in his products while they were under his control'.

10 The Commission took the view that the Act did not properly transpose the Directive and, on 26 April 1989, sent the United Kingdom Government a letter of formal notice in accordance with the procedure laid down by Article 169 of the Treaty, requesting it to submit its observations on six complaints listed therein within a period of two months.

11 By letter dated 19 July 1989, the United Kingdom denied the Commission's allegations. Although it accepted that the wording of the Act was different from that of the Directive, it argued that under Article 189 of the EEC Treaty Member States were entitled to choose appropriate wording when implementing a directive, provided that the intended result of the directive was achieved.

12 On 2 July 1990, the Commission addressed a reasoned opinion to the United Kingdom pursuant to Article 169 of the Treaty. It accepted the right of a Member State to choose its own wording to implement a directive, provided that the national rules achieved the intended result. Nevertheless, it maintained its position with respect to all but one of the six complaints set out its letter of formal notice.

13 By letter of 4 October 1990, the United Kingdom reiterated its view that the Directive was correctly implemented by the Act.

14 The United Kingdom's arguments persuaded the Commission that four of its remaining complaints should be abandoned, particularly in view of the rule in section 1(1) of the Act under which the relevant provisions were to be construed in conformity with the Directive.

15 However, considering that the wording of section 4(1)(e) was unambiguous and would have to be interpreted contra legem by the courts in the United Kingdom in order to conform to the Directive, the Commission decided to seek a ruling from the Court on the compatibility of section 4(1)(e) of the Act with Article 7(e) of the Directive.

16 In its application, the Commission argues that the United Kingdom legislature has broadened the defence under Article 7(e) of the Directive to a considerable degree and converted the strict liability imposed by Article 1 of the Directive into mere liability for negligence.

17 The Commission submits that the test in Article 7(e) of the Directive is objective in that it refers to a state of knowledge, and not to the capacity of the producer of the product in question, or to that of another producer of a product of the same description, to discover the defect. However, by its use of the words `a producer of products of the same description as the product in question [who] might be expected to have discovered the defect', section 4(1)(e) of the Act presupposes a subjective assessment based on the behaviour of a reasonable producer. It is easier for the producer of a defective product to demonstrate, under section 4(1)(e), that neither he nor a producer of similar products could have identified the defect at the material time, provided that the standard precautions in the particular industry were taken and there was no negligence, than to show, under Article 7(e), that the state of scientific and technical knowledge was such that no-one would have been able to discover the defect.

18 The Commission adds that, whilst section 1(1) of the Act constitutes a most helpful indication to British courts, it cannot suffice to render lawful language which clearly on its face runs counter to the wording of the Directive and could be construed consistently with the Directly only by interpreting it contra legem.

19 The United Kingdom Government does not challenge the Commission's interpretation of Article 7(e) of the Directive as setting out an `objective' and not a `subjective' test. It considers, however, that section 4(1)(e) of the Act sets out the same test as Article 7(e) of the Directive and does not provide for liability founded on negligence.

20 The Government submits that, in so far as Article 7(e) can be interpreted in the abstract in a factual vacuum, it lays down an `objective' test in the sense that the `state of scientific and technical knowledge' mentioned therein does not refer to what the producer in question actually knows or does not know, but to the state of knowledge which producers of the class of the producer in question, understood in a generic sense, may objectively be expected to have. This is precisely the meaning of section 4(1)(e) of the Act.

21 The United Kingdom Government points out that, in any event, courts in the United Kingdom are required to interpret section 4(1)(e) consistently with Article 7(e) by virtue of section 1(1) of the Act or the general principle that legislation implementing Community law should be construed so as to accord therewith.

22 It argues that, in view of section 1(1) of the Act and the absence of any decision of a national court on the meaning of section 4(1)(e), the Commission is not in a position to say that it is incompatible with Article 7(e). It could succeed in its argument only if could show conclusively that section 4(1)(e) is completely incapable of bearing the same legal meaning as Article 7(e).

23 In order to determine whether the national implementing provision at issue is clearly contrary to Article 7(e) as the Commission argues, the scope of the Community provision which it purports to implement must first be considered.

24 In order for a producer to incur liability for defective products under Article 4 of the Directive, the victim must prove the damage, the defect and the causal relationship between defect and damage, but not that the producer was at fault. However, in accordance with the principle of fair apportionment of risk between the injured person and the producer set forth in the seventh recital in the preamble to the Directive, Article 7 provides that the producer has a defence if he can prove certain facts exonerating him from liability, including `that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered' (Article 7(e)).

25 Several observations can be made as to the wording of Article 7(e) of the Directive.

26 First, as the Advocate General rightly observes in paragraph 20 of his Opinion, since that provision refers to `scientific and technical knowledge at the time when [the producer] put the product into circulation', Article 7(e) is not specifically directed at the practices and safety standards in use in the industrial sector in which the producer is operating, but, unreservedly, at the state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation.

27 Second, the clause providing for the defence in question does not contemplate the state of knowledge of which the producer in question actually or subjectively was or could have been apprised, but the objective state of scientific and technical knowledge of which the producer is presumed to have been informed.

28 However, it is implicit in the wording of Article 7(e) that the relevant scientific and technical knowledge must have been accessible at the time when the product in question was put into circulation.

29 It follows that, in order to have a defence under Article 7(e) of the Directive, the producer of a defective product must prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, at the time when the product in question was put into circulation was not such as to enable the existence of the defect to be discovered. Further, in order for the relevant scientific and technical knowledge to be successfully pleaded as against the producer, that knowledge must have been accessible at the time when the product in question was put into circulation. On this last point, Article 7(e) of the Directive, contrary to what the Commission seems to consider, raises difficulties of interpretation which, in the event of litigation, the national courts will have to resolve, having recourse, if necessary, to Article 177 of the EC Treaty.

30 For the present, it is the heads of claim raised by the Commission in support of its application that have to be considered.

31 In proceedings brought under Article 169 of the Treaty the Commission is required to prove the alleged infringement. The Commission must provide the Court with the information necessary for it to determine whether the infringement is made out and may not rely on any presumption (see, in particular, Case C-62-89 Commission v France [1990] ECR I-925, paragraph 37).

32 The Commission takes the view that inasmuch as section 4(1)(e) of the Act refers to what may be expected of a producer of products of the same description as the product in question, its wording clearly conflicts with Article 7(e) of the Directive in that it permits account to be taken of the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.

33 That argument must be rejected in so far as it selectively stresses particular terms used in section 4(1)(e) without demonstrating that the general legal context of the provision at issue fails effectively to secure full application of the Directive. Taking that context into account, the Commission has failed to make out its claim that the result intended by Article 7(e) of the Directive would clearly not be achieved in the domestic legal order.

34 First, section 4(1)(e) of the Act places the burden of proof on the producer wishing to rely on the defence, as Article 7 of the Directive requires.

35 Second, section 4(1)(e) places no restriction on the state and degree of scientific and technical knowledge at the material time which is to be taken into account.

36 Third, its wording as such does not suggest, as the Commission alleges, that the availability of the defence depends on the subjective knowledge of a producer taking reasonable care, having regard to the standard precautions taken in the industrial sector in question.

37 Fourth, the Court has consistently held that the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts (see, in particular, Case C-382-92 Commission v United Kingdom [1994] ECR I-2435, paragraph 36). Yet in this case the Commission has not referred in support of its application to any national judicial decision which, in its view, interprets the domestic provision at issue inconsistently with the Directive.

38 Lastly, there is nothing in the material produced to the Court to suggest that the courts in the United Kingdom, if called upon to interpret section 4(1)(e), would not do so in the light of the wording and the purpose of the Directive so as to achieve the result which it has in view and thereby comply with the third paragraph of Article 189 of the Treaty (see, in particular, Case C-91-92 Faccini Dori v Recreb [1994] ECR I-3325, paragraph 26). Moreover, section 1(1) of the Act expressly imposes such an obligation on the national courts.

39 It follows that the Commission has failed to make out its allegation that, having regard to its general legal context, especially section 1(1) of the Act, section 4(1)(e) clearly conflicts with Article 7(e) of the Directive. As a result, the application must be dismissed.

Costs

40 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Commission has been unsuccessful, it must be ordered to pay the costs.

On those grounds,

THE COURT

(Fifth Chamber)

hereby:

1. Dismisses the application;