MEMO TO:
Alexsei Demo
RESEARCH ID:
#40006561fe475d
JURISDICTION:
Ontario, Canada
ANSWERED ON:
May 5, 2023

Issue:

What's the test for negligent design in product liability cases?

Research Description:

A manufacturer of hoverboards discovers that if their hoverboards were charged on a 35 degree angle on quartz, a reaction would occur leading to a battery fire. The manufacturer contacted consumers to alert them to the risk and how to reduce it. Because it's such a specific issue and is so unlikely to occur, a decision is made not to recall the hoverboards. The plaintiff, an owner of such hoverboards, never gets the e-mail (it goes to spam). Eventually, he charges his hoverboard on his quart countertop because he runs out of space on the floor. While it charges, it tilts to a 35 degree angle and catches fire, immolating his residence. He makes it out alive - just.

Conclusion:

For products liability claims, there are four established categories. First, manufacturers have a duty of care to consumers to see that there are no defects in manufacture that are likely to give rise to injury in the ordinary course of use. Second, manufacturers have a duty of care to warn consumers of dangers inherent in the use of the product of which the manufacturer has knowledge or ought to have knowledge. Third, manufacturers have a duty of care in designing the product to avoid safety risks and to make the product reasonably safe for its intended purposes. Fourth, there is a pure economic loss claim in negligence because manufacturers have a duty of care to compensate consumers for the cost of repairing a dangerous product that presents a real and substantial danger to the public. (Vester v Boston Scientific Ltd., 2015 ONSC 7950 (CanLII))

The analysis may begin by placing the negligence in design cause of action in the context of products liability claims generally, for which there are four established genres. First, manufacturers have a duty of care to consumers to see that there are no defects in manufacture that are likely to give rise to injury in the ordinary course of use. Second, manufacturers have a duty of care to warn consumers of dangers inherent in the use of the product of which the manufacturer has knowledge or ought to have knowledge. Third, manufacturers have a duty of care in designing the product to avoid safety risks and to make the product reasonably safe for its intended purposes. Fourth, there is a pure economic loss claim in negligence because manufacturers have a duty of care to compensate consumers for the cost of repairing a dangerous product that presents a real and substantial danger to the public. (Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII))

The underlying argument in a design negligence action is that a manufacturer has a duty of care not to design a product negligently because the manufacturer should and can fairly be held responsible for the choices it makes that affect the safety of the product. The manufacturer has a duty to make reasonable efforts to reduce any risk to life and limb that may be inherent in its design. To succeed in a cause of action for negligent design of a product, the plaintiff must identify the design defect in the product and establish that the defect created a substantial likelihood of harm and that there is, safer and more economically feasible ways to manufacture the product. In the case of negligence in designing a product, the defendant is blameworthy for not designing its product in a safer manner. A manufacturer does not have the right to manufacture an inherently dangerous article when a method exists of manufacturing the same article without risk of harm. (Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII))

The law does not require a manufacturer to produce articles that are accident proof or incapable of doing harm, but a manufacturer does have a duty to design a product that is not defective. Depending on the product, defectiveness may be determined in relation to the design of the product based on a risk-utility analysis of an alternative safer design of the product. In this category of products liability duty of care, whether a manufacturer breaches its duty is determined by a risk-utility analysis that measures whether the utility of the chosen design outweighs the foreseeable risks associated with the chosen design. In negligent design cases, the determination of whether a manufacturer breaches its duty of care in designing a product depends upon a risk-utility analysis that measures whether the utility of the chosen design outweighs the foreseeable risks associated with the chosen design. This risk-utility analysis requires weighing any foreseeable risk against the foreseeable utility of the product based on the information available to the manufacturer at the time of distribution or implantation and without the benefit of hindsight. Manufacturers are required to weigh the likelihood of both the benefit and the risk offered by a product as well as the value of the potential benefit and the seriousness of the potential risks. (Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII))

In Rentway Canada Ltd./Ltée v. Laidlaw Transport Ltd., Granger J. compiled a list of factors to consider when balancing the risks inherent in the product, as designed, against its utility and cost, namely, (1) the utility of the product to the public as a whole and to the individual user; (2) the nature of the product -- that is, the likelihood that it will cause injury; (3) the availability of a safer design; (4) the potential for designing and manufacturing the product so that it is safer but remains functional and reasonably priced; (5) the ability of the plaintiff to have avoided injury by careful use of the product; (6) the degree of awareness of the potential danger of the product which reasonably can be attributed to the plaintiff; and (7) the manufacturer's ability to spread around any costs related to improving the safety of the design. (Rentway Canada Ltd./Ltée v. Laidlaw Transport Ltd., [1989] O.J. No. 786 (Ont High Ct J), Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII))

The principle embodied in the maxim res ipsa loquitur applies in an action resulting from the negligence of the defendant where it is shown that the thing which caused the accident was under the management of him or his servants, and that the accident was such as in the ordinary course of things would not have happened if proper care had been exercised by him or his servants. It is used in actions for negligence where no proof of negligence is required beyond the accident itself which is such as to involve a prima facie inference of negligence on the part of the defendant, e.g., in the case of a collision between two trains upon a defendant's railway system. It ought not to be applied to evidence of an unexplained accident, if the evidence is as consistent with the cause of the accident having been the victim's own negligence as with its having been that of the defendant. It is conceivable that there may be circumstances in which the rule might be invoked against the supplier or repairer of a motor-car, e.g., if a brake failure occurred immediately after the customer took delivery of the repaired vehicle.  (Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1971 CanLII 389 (ON CA))

Law:

In Vester v Boston Scientific Ltd., 2015 ONSC 7950 (CanLII), the Court established the duty of care standard with regards to product liability claims: 

[5] For products liability claims, there are four established categories. First, manufacturers have a duty of care to consumers to see that there are no defects in manufacture that are likely to give rise to injury in the ordinary course of use: Donoghue v. Stevenson, 1932 CanLII 536 (FOREP), [1932] A.C. 562 (H.L.). Second, manufacturers have a duty of care to warn consumers of dangers inherent in the use of the product of which the manufacturer has knowledge or ought to have knowledge: Hollis v. Dow Corning Corp., 1995 CanLII 55 (SCC), [1995] 4 S.C.R. 634 at para. 20; Lambert v. Lastoplex Chemicals Co., 1971 CanLII 27 (SCC), [1972] S.C.R. 569 at p. 574; Bow Valley Husky (Bermuda) Ltd. v. Saint John Shipbuilding Ltd., 1997 CanLII 307 (SCC), [1997] 3 S.C.R. 1210. Third, manufacturers have a duty of care in designing the product to avoid safety risks and to make the product reasonably safe for its intended purposes: Ragoonanan v. Imperial Tobacco Canada Ltd. (2000), 2000 CanLII 22719 (ON SC), 51 O.R. (3d) 603 (S.C.J.); Rentway Canada Ltd. v. Laidlaw Transport Ltd., [1989] O.J. No. 786 (H.C.J.), aff'd [1994] O.J. No. 50 (C.A.). Fourth, there is a pure economic loss claim in negligence because manufacturers have a duty of care to compensate consumers for the cost of repairing a dangerous product that presents a real and substantial danger to the public: Winnipeg Condominium Corporation No. 36 v. Bird Construction Co. Ltd., 1995 CanLII 146 (SCC), [1995] 1 S.C.R. 85.

In Rentway Canada Ltd./Ltée v. Laidlaw Transport Ltd., [1989] O.J. No. 786 (Ont High Ct J), affirmed on appeal [1994] O.J. No. 50 (ONCA), Granger J. compiled a list of factors to consider when balancing the risks inherent in the product, as designed, against its utility and cost, namely, (1) the utility of the product to the public as a whole and to the individual user; (2) the nature of the product -- that is, the likelihood that it will cause injury; (3) the availability of a safer design; (4) the potential for designing and manufacturing the product so that it is safer but remains functional and reasonably priced; (5) the ability of the plaintiff to have avoided injury by careful use of the product; (6) the degree of awareness of the potential danger of the product which reasonably can be attributed to the plaintiff; and (7) the manufacturer's ability to spread around any costs related to improving the safety of the design.

In Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII), the Superior Court recently summarized the law regarding negligent design in the context of product liability:

[89] The analysis may begin by placing the negligence in design cause of action in the context of products liability claims generally, for which there are four established genres. First, manufacturers have a duty of care to consumers to see that there are no defects in manufacture that are likely to give rise to injury in the ordinary course of use.55 Second, manufacturers have a duty of care to warn consumers of dangers inherent in the use of the product of which the manufacturer has knowledge or ought to have knowledge.56 Third, manufacturers have a duty of care in designing the product to avoid safety risks and to make the product reasonably safe for its intended purposes.57 Fourth, there is a pure economic loss claim in negligence because manufacturers have a duty of care to compensate consumers for the cost of repairing a dangerous product that presents a real and substantial danger to the public.58

[...]

[91] The underlying argument in a design negligence action is that a manufacturer has a duty of care not to design a product negligently because the manufacturer should and can fairly be held responsible for the choices it makes that affect the safety of the product. The manufacturer has a duty to make reasonable [page709] efforts to reduce any risk to life and limb that may be inherent in its design.59

[92] To succeed in a cause of action for negligent design of a product, the plaintiff must identify the design defect in the product and establish that the defect created a substantial likelihood of harm and that there is, safer and more economically feasible ways to manufacture the product.60

[93] In the case of negligence in designing a product, the defendant is blameworthy for not designing its product in a safer manner. In Nicholson v. John Deere Ltd.,61 Smith J. noted that a manufacturer does not have the right to manufacture an inherently dangerous article when a method exists of manufacturing the same article without risk of harm.

[94] The law does not require a manufacturer to produce articles that are accident proof or incapable of doing harm, but a manufacturer does have a duty to design a product that is not defective. Depending on the product, defectiveness may be determined in relation to the design of the product based on a risk-utility analysis of an alternative safer design of the product.62 In this category of products liability duty of care, whether a manufacturer breaches its duty is determined by a risk-utility analysis that measures whether the utility of the chosen design outweighs the foreseeable risks associated with the chosen design.63

[95] In negligent design cases, the determination of whether a manufacturer breaches its duty of care in designing a product depends upon a risk-utility analysis that measures whether the [page710] utility of the chosen design outweighs the foreseeable risks associated with the chosen design.64 This risk-utility analysis requires weighing any foreseeable risk against the foreseeable utility of the product based on the information available to the manufacturer at the time of distribution or implantation and without the benefit of hindsight.65 Manufacturers are required to weigh the likelihood of both the benefit and the risk offered by a product as well as the value of the potential benefit and the seriousness of the potential risks.66

[96] In Rentway v. Laidlaw,67 Granger J. compiled a list of factors to consider when balancing the risks inherent in the product, as designed, against its utility and cost, namely, (1) the utility of the product to the public as a whole and to the individual user; (2) the nature of the product -- that is, the likelihood that it will cause injury; (3) the availability of a safer design; (4) the potential for designing and manufacturing the product so that it is safer but remains functional and reasonably priced; (5) the ability of the plaintiff to have avoided injury by careful use of the product; (6) the degree of awareness of the potential danger of the product which reasonably can be attributed to the plaintiff; and (7) the manufacturer's ability to spread around any costs related to improving the safety of the design.

In Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1971 CanLII 389 (ON CA), the Court of Appeal granted the Defendant's appeal from a judgment of Haines J. (at Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1970 CanLII 452 (ON SC)) in favour of the Plaintiff in an action for damages for personal injuries. The Plaintiff had been involved in a motor vehicle accident which he alleged was due to defective parts. The Court of Appeal found that the maxim res ipsa loquitur was inapplicable as there had been too great a time lapse between the date of delivery and the date of the accident. The Court also examined the standard of care for product liability:

While the scope of M'Alister (or Donoghue) v. Stevenson 1932 CanLII 536 (FOREP), [1932] A.C. 562, has been greatly extended and is no longer limited to articles of food and drink, but has been applied to underwear, tombstones, motor-cars, elevators and hair dye, and more recently to house property and articles installed therein, our Courts do not, in product liability cases, impose upon manufacturers, distributors or repairers, as is done in some of the States of the American union, what is virtually strict liability. The standard of care exacted of them under our law is the duty to use reasonable care in the circumstances and nothing more.

It has been argued that the plaintiff can invoke the maxim res ipsa loquitur against both defendants. Certainly as against the Ford Company there is too great a time lapse between the date of delivery of the vehicle to Elgin Motors and the date of the accident. The car had been driven since June, 1965, a distance in excess of 20,000 miles. Moreover, during the intervening period it was repaired and adjusted by Elgin on many occasions. Counsel for the respondents acknowledged that the action as against Ford could not succeed unless he established that there was a faulty design in the concept and installation of the braking system -- more particularly the fail-safe system, viz., the mechanical brakes upon which the driver must rely if the booster fails to operate. He also argues that it was Ford's duty to warn the plaintiff Phillips of this danger.

It was contended by counsel for the respondents, but I thought not too strenuously, that res ipsa loquitur might be invoked as against both defendants. Res ipsa loquitur, which is often referred to as a rule of law or evidence, is essentially nothing more than an instance of circumstantial evidence. It applies whenever common experience or the evidence in a case indicates that the mere happening of an accident may be considered as evidence that reasonable care has not been used. In United Motors Service, Inc. v. Hutson et al., 1937 CanLII 5 (SCC), [1937] S.C.R. 294, [1937] 1 D.L.R. 737, 4 I.L.R. 91, it is made clear that res ipsa loquitur has no effect on the burden of proof, and that the plaintiff has to establish negligence on a balance of probabilities. It does not cast upon the defendant the burden of disproof of negligence, for this would come dangerously close to a fictional use of the maxim as a foundation for the doctrine of strict liability.

In United Motors Service, Inc. v. Hutson, supra, Duff, C.J.C., after quoting the principle as expounded in Scott v. London & St. Katherine Docks Co. (1895), 3 H. & C. 596 at p. 601, 159 E.R. 665, stated at p. 297:

Broadly speaking, in such cases, where the defendant produces an explanation equally consistent with negligence and with no negligence, the burden of establishing negligence still remains with the plaintiff.

The principle embodied in the maxim res ipsa loquitur applies in an action resulting from the negligence of the defendant where it is shown that the thing which caused the accident was under the management of him or his servants, and that the accident was such as in the ordinary course of things would not have happened if proper care had been exercised by him or his servants. It is used in actions for negligence where no proof of negligence is required beyond the accident itself which is such as to involve a prima facie inference of negligence on the part of the defendant, e.g., in the case of a collision between two trains upon a defendant's railway system. It ought not to be applied to evidence of an unexplained accident, if the evidence is as consistent with the cause of the accident having been the victim's own negligence as with its having been that of the defendant.

It is conceivable that there may be circumstances in which the rule might be invoked against the supplier or repairer of a motor-car, e.g., if a brake failure occurred immediately after the customer took delivery of the repaired vehicle. Here, however, the new booster was installed in the vehicle on September 20, 1967, and the motor-car was driven without any brake failure for more than three months and over a distance ranging between 1,100 and 1,200 miles. It is true that in November, 1967, Elgin gave the car what is known as a "75 point check-up", but this was done gratuitously at the instance of the company's president as a goodwill gesture. That thorough investigation revealed a slight leak in the rear main bearing which was remedied. This could have had no effect on the braking capacity of the car and no malfunction of the braking system was disclosed in the course of the check-up. A leak was also discovered in the rear wheel cylinder which Elgin removed and replaced. The car was again the the Elgin garage on December 12th and 18th, but the plaintiff made no complaint about the brakes on those occasions.

Negligence must be proved by the plaintiff and the method of proof is the same as in any other case of negligence. It was said by Lord Macmillan in M'Alister (or Donoghue) v. Stevenson, 1932 CanLII 536 (FOREP), [1932] A.C. 562, that there was no presumption of negligence and that there was no justification for applying the maxim. Later cases have established that this dictum went too far, and that when the circumstances are such as to call for its application it applies in products cases equally with negligence in other cases.

Authorities:
Vester v Boston Scientific Ltd., 2015 ONSC 7950 (CanLII)
Rentway Canada Ltd./Ltée v. Laidlaw Transport Ltd., [1989] O.J. No. 786 (Ont High Ct J)
Price v. Smith & Wesson Corp., 2021 ONSC 1114 (CanLII)
Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1970 CanLII 452 (ON SC)
Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1971 CanLII 389 (ON CA)
Rentway Canada Ltd./Ltée v. Laidlaw Transport Ltd., [1994] O.J. No. 50 (ONCA)