What's the worst that could happen? Toxic horseradish! - AG Hogan in Krone (C-65/20)

AG Hogan issued an opinion in Krone (C-65/20) case last Thursday, critically examining the concept of a defective product under the Product Liability Directive (Directive 85/374). In this case the national court asked whether a physical copy of a daily newspaper could be considered to be a product under PLD. Its defect would then consist of providing consumers (readers) with an inaccurate health tip, which health tip when followed led to damage to health. 

Specifically, for those of our readers who are interested in the facts, an Austrian daily newspaper Kronen-Zeitung published advice of Kräuterpfarrer Benedikt (Herbalist Priest Benedikt) that to alleviate rheumatic pain you should apply 'fresh coarsely grated horseradish' over a layer of lard for 2-5 hours (please do not try this at home!). The advice turned out to be wrong, as it meant to recommend this application for 2-5 minutes instead of hours. The newspaper did not question its correctness, relying on the expertise of its contributor. Should a consumer have known better than to try a health tip from a newspaper? Well, my guess would be that most of us follow some sort of tip/recipe we find in some media. With a possibly relevant health tip, we would think of trying it out, thinking 'What's the worst that could happen?'. Well, a consumer who tried this homeopathic remedy at home ended up with severe pain due to a toxic contact reaction. The legal issue was whether she could claim damages for pain and suffering from the newspaper and one of the avenues to get them would be under the Austrian implementation of the PLD.

AG Hogan does not consider a physical copy of a daily newspaper with an inaccurate health tip printed in it to fall within the scope of a notion of a 'defective product'. First, he looks at the text of the PLD provisions which all seem to refer to physical things (as products) and a physical defect in them (para 24). He gives an example of a physical copy of a newspaper being able to actually harm consumers - through a protruding staple or toxic printing ink - but concludes that here the defect was caused due to the fault in the intellectual content rather than the physical product (para 26). Therefore, what he considers to have occurred is a defective service rather than a defective product. He then proceeds to claim that he is unconvinced by academic writing suggesting that PLD could apply to defects in intangible content as well as in tangible products (esp. relevant with relation to software) (paras 28-29), and that the fact that a line between products and services is blurred should not matter for the application of the PLD (para 30). He states that the PLD does not provide for strict liability for mere advice (paras 29, 34), which suggests that in case of incorrect information on the packaging of a product or in its manuals, but also incorrect legal or medical advice, consumers would need to prove at least negligence on the side of the producer to obtain damages. This part is quite interesting, considering that provided instructions and warnings are part of the product safety assessment. How to differentiate between the importance of instructions in the product safety test and not assigning product liability on the basis of faulty instructions? AG Hogan does not ask nor answers this question. He also stresses that allowing consumers to claim strict liability for an incorrect health tip published in a newspaper, could introduce a significant hindrance to the freedom of press, especially compared to the obligations of radio or TV media.

This is an interesting case, as it considers the scope of application of the PLD to a broader range of consumer products (and potentially consumer services). As the PLD is currently under review, its applicability in such situations as occurred in this case could be further clarified by the legislator. For now, let us see whether the Court agrees with AG Hogan.

Foreseeability and controllability of strikes - CJEU in Airhelp (C-28/20)

On 23 March 2021 the CJEU issued its judgment in the case Airhelp (C-28/20), interpreting provisions of Regulation 261/2004 on air passenger rights. Specifically, this judgment confirms that in most cases the airlines will not be able to invoke strikes (industrial actions) as an extraordinary circumstance that would release them from their obligation to pay compensation to passengers of delayed or cancelled flights under Article 5 Regulation 261/2004.

This case pertained to one of many flights cancelled due to a strike of SAS pilots, which strike took place between 26 April 2019 and lasted until 2 May 2019, with more than 4000 flights having been cancelled. The strike was part of the negotiations of a new collective agreements between the pilots' trade unions and SAS. The airline considered this to be an extraordinary circumstance, i.e. a situation not falling within the normal exercise of their activity, which is the provision of air services. Arguments raised by the airlines relied on the rare occurrence of strikes in Sweden, unusual coordination between 4 trade unions to hold a simultaneous strike, which led to one of the biggest strikes ever recorded in the air transport industry (para 14). The strike was lawful, thus employees could not be ordered to return to work. Due to its scale, SAS could not reorganise its activity, either.

The CJEU reminds that the right to take collective action is one of the fundamental rights (Article 28 of the Charter), through which workers and employers may conduct collective bargaining of their working conditions, and, therefore, strikes should be seen as inherent in the normal exercise of the activity of airlines (paras 27-29). This follows the previous judgment in the case Krüsemann (see our previous post Joined cases...). Further, this strike was foreseeable, both long term, due to the fact that the previous collective agreement was terminated, and short term, after a notice was served. And if a strike is foreseeable, airlines could have taken some measures to alleviate its serious consequences, retaining some control (paras 34-35). It is irrelevant in this assessment whether the pilots' demands were reasonable or proportionate (para 38). National courts should interpret Recital 14 Regulation 261/2004, mentioning strikes as an example of an extraordinary circumstance, as requiring that a strike is external to the activity of the air carrier concerned, e.g. strike of air traffic control (para 42). If the staff of the air carrier starts a strike, this could only be classified as an extraordinary circumstance, if their demands could only be met by a public authority and not by air carriers (para 45). The last point made refers to the fact that air carriers may be expected to suffer even 'substantial negative economic consequences' when protecting consumer rights (paras 47-50), and that this should not be perceived as putting them in a weaker bargaining position with trade unions.

This last point of the judgment does not ring true, considering that any economic assessment made by the airlines as to the reasonableness of the employees' demands will need to account for the negative financial consequences to the airline of not meeting their demands. This will now undoubtedly include calculation of compensations that need to be paid out to passengers of cancelled flights. Ironically, whilst asserting that airlines retain some control over strikes, the CJEU seems to be shifting some of that control towards trade unions with this judgment.

Consumer Conference '21. Sustainability. Consumption.

Nova Consumer Lab is holding an online conference on consumer law and sustainability April 21-22. Various sessions will introduce the participants to the regulation of and issues with circular economy, regulatory challenges of consumer law facilitating sustainability, sustainable consumption of food, water and energy. Please see below the details of the programme, as well as the link to the registration website.