Product Liability: A Singapore Perspective

28 March 2017

Sandra Seah, Eef Gerard Van Emmerik

It was recently reported in local news on 9 March 2017 that 4 margarine brands are being investigated by the Agri-Food and Veterinary Authority ("AVA") for mislabelling their packaging as "zero trans-fat" even though the products do contain trans-fat. 

The AVA investigations were prompted by a study done by the Consumers Association of Singapore ("CASE"), which is the local non-profit and non-governmental consumer watchdog.

This recent example illustrates the nexus between consumer rights organisations and state authorities in advocating for fair-trading practices in the interest of local consumers.

Singaporean consumers are highly educated and discerning. Over the past decade, governmental authorities have also increasingly placed greater emphasis on consumer rights and fair trade practices in the interest of consumers by investigating errant manufacturers and sellers. 

Consumers in Singapore have several rights accorded to them by law, including information rights (e.g. certain information must be displayed on packaging) and laws that protect against being misled (e.g. sellers must not make false claims about their products). Certain product categories also attract specific legislative requirements. 

In addition to legislative protections, consumers in Singapore may also turn to rights and remedies at common law where they have suffered negatively from defective goods.
 
Product Liability at Common Law

There is no single system of product liability law in Singapore, nor any formal state operated compensation schemes available for any specific products.
 
Instead, persons with legal claims arising from defective products or products that do not satisfy certain statutorily prescribed standards may make a claim through the Singapore judicial system. It is often the case that claims against manufacturers are based on tort (due to absence of a direct contract between consumer and manufacturer). Claims against sellers would typically arise in contract, but where the consumer did not purchase a product himself, he may make a claim in tort against sellers as well.

Tort
 
Claimants would have to establish a case in negligence, basic elements of which includes (i) establishing that a duty of care existed, (ii) illustrating that the duty of care was breached, and, (iii) showing that the breach caused damage to the consumer. Whether a claimant satisfies items (i) to (iii) really depends on the facts of each case, and it is generally established that where a claimant can show that a duty of care existed, the manufacturer should take reasonable care to avoid acts/omissions that would be foreseen (reasonably) to cause injury or damage to persons or property. Manufacturers cannot avoid liability for death or injury, but other reasonable restrictions on negligent liability may be excluded. Do note that Singapore, unlike other common law jurisdictions, has recognised tortious liability for pure economic loss in certain circumstances.
 
Contract
 
Claimants would have to show that a contract (whether express or implied) existed, that the contract included terms relating to quality and/or fitness of purpose of goods sold, and breach of such terms by the seller. To the benefit of such claimants, there exist statues that protect consumers by implying terms relating to quality and fitness of purpose of goods in contracts for sale and supply of goods in Singapore. Additionally, misrepresentation or deceptive practices perpetrated by sellers are legislatively prohibited in the interest of consumers. Please see the table below, "Consumer Goods" row for more information.
 
Statutes that are Relevant to Product Liability in Singapore – categorised by sector

Sector Besides contract and tort, here are examples of key statutory provisions that are relevant to the Sector Summary of Statutory Provisions  Time Bar for Claims  Class Action 
Consumer Goods 1. Sale of Goods Act
2. Supply of Goods Act
3. Unfair Contract Terms Act
4. Misrepresentation Act
5. Consumer Protection (Trade Descriptions And Safety Requirements) Act
6. Consumer Protection (Fair Trading) Act ("Lemon Law")
 

These typically apply to sellers only, not manufacturers as these statues relate to contractual terms:
 
1. Sale of Goods Act, 
2. Supply of Goods Act 
3. Unfair Contract Terms Act

 
The above 3 Acts work together by: 
(i) implying basic standard terms into all contracts for sale of goods through the Sale of Goods and Supply of Goods Acts – i.e. goods must be of satisfactory quality and comply with the description of the goods or sample of goods supplied to consumers;
(ii) Operation of the Unfair Contract Terms Act prevents sellers from excluding or otherwise restricting by contract the implied terms as to satisfactory quality of goods.

4. Consumer Protection (Trade Descriptions and Safety Requirements Act ("CPTDA")
 
The CPTDA prevents sellers from applying incorrect "misdescriptions" of goods supplied in the course of business. Certain goods such as electrical appliances / gas systems also attract the requirement for the seller to affix safety labels on such goods.
 
5. Consumer Protection (Fair Trading) Act ("CPFTA") or Lemon Law
 
The CPFTA defines certain "unfair" practices which would give consumers a right of action against sellers if the sellers perform the following practices:
 
Deceiving or misleading consumers
Making false claims
Taking advantage of vulnerable consumers who are not in a position to protect their own interest or reasonably understand the character, nature, language or effect of a transaction
Performing certain clearly prohibited actions stated in Schedule 2 of the CPFTA, which include acts such as using small print to conceal a material fact from consumers
 
Under the CPFTA, any person who, in the course of any trade or business, supplies goods that contravene CPFTA regulations shall be guilty of an offence, punishable with a fine and/or imprisonment.

6 years Possible under O 15 r 12 of the Rules of Court
 Food & Beverage 1. Sale of Food Act
2. Sale of Goods Act
3. Supply of Goods Act
4. Unfair Contract Terms Act
5. Misrepresentation Act
6. Consumer Protection (Trade Descriptions And Safety Requirements) Act
7. Consumer Protection (Fair Trading) Act
Please see above "Consumer Goods" row for explanation of, Sale of Goods Act, Supply of Goods Act, Unfair Contract Terms Act, Consumer Protection (Trade Descriptions And Safety Requirements) Act, and Consumer Protection (Fair Trading) Act.
 
The following may apply to sellers, manufacturers, agricultural producers and importers:
 
Sale of Food Act
 
The Sale of Food Act ("SFA") sets out minimum standards for the quality and wholesomeness of food sold in Singapore, including prohibited ingredients or ingredients unsafe for human consumption, standards relating to health and safety of food preparation and requirements relating to labelling of food. Adulteration of food is also prohibited.
 
This Act also empowers the Agri-Food and Veterinary Authority to inspect, seize and analyse food samples for compliance with the SFA.
 
Any person who is guilty of an offence under the SFA is liable on conviction to a fine, imprisonment or both. Fines are levied in the amount of up to S$5,000 for a first offence, and S$10,000 and/ or imprisonment of up to 3 months for a second offence.
   
 Vehicles 1. Sale of Goods Act
2. Supply of Goods Act
3. Unfair Contract Terms Act
4. Misrepresentation Act
5. Consumer Protection (Trade Descriptions And Safety Requirements) Act
6. Consumer Protection (Fair Trading) Act
Please see above "Consumer Goods" row for explanation of, Sale of Goods Act, Supply of Goods Act, Unfair Contract Terms Act, Consumer Protection (Trade Descriptions And Safety Requirements) Act, and Consumer Protection (Fair Trading) Act.
 
Please note that negative repercussions could arise in the event death is caused (both imprisonment and/or fines) under the Penal Code where the death arose from rash or negligent acts. 
   
Medical Devices and Pharmaceuticals 1. Medicines Act
2. Health Products Act
3. Sale of Goods Act
4. Supply of Goods Act
5. Unfair Contract Terms Act
6. Misrepresentation Act
7. Consumer Protection (Trade Descriptions And Safety Requirements) Act
8. Consumer Protection (Fair Trading) Act
 

Please see above "Consumer Goods" row for explanation of, Sale of Goods Act, Supply of Goods Act, Unfair Contract Terms Act, Consumer Protection (Trade Descriptions And Safety Requirements) Act, and Consumer Protection (Fair Trading) Act.
 
Please note that negative repercussions could arise in the event death is caused (both imprisonment and/or fines) under the Penal Code where the death arose from rash or negligent acts. 
 
The following may apply to sellers, manufacturers, and importers of medical devices and pharmaceuticals:
 
Medicines Act ("MA")
 
The MA is a comprehensive Act that is a control mechanism for authorities in relation to all forms of medicine both western and traditional/ethnic including traditional Chinese medicine.
 
From a product liability perspective, compliance with the entire terms of the MA is crucial – from importation, storage, ensuring that licensed pharmacies distribute drugs that require prescriptions, ensuring that medicines are packaged properly in accordance with the MA standards, and, meeting advertisement approval requirements.
 
Health Products Act ("HPA")
 
The HPA is a wide-ranging Act that covers more than just product liability and includes provisions relating to registration, presentation and advertisement of health products including medical devices, cosmetics, therapeutic products and oral dental gums.
 
As far as product liability is concerned, the HPA sets out standards for health products in relation to their formulation, composition, design specification, quality, safety, efficacy and presentation.
 
Consequences of Breach of MA and HPA
 
Where the minimum requirements contained in the MA and HPA are not met, sellers, manufacturers and importers can expect to face prescribed fines and/or imprisonment.
 
Failure to meet these prescribed requirements also bolsters the case of affected individuals in the common law realms of contract and tort.

 

   

Conclusion 
 
Assessing a particular product's risk profile in respect of product liability concerns in Singapore is a multi-faceted exercise.

Legal considerations include those at common law as well as in statute. What statutes are relevant depends on industry sector, and there are general statues that apply to all contracts of sale. 

A multi-pronged strategy most effectively manages product liability risks. It is best practice to engage with stakeholders at all levels from consumer interest groups, industry representative bodies involved in standard-setting and governmental authorities.

This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. Please contact our lawyers if you have any specific queries.

Authors

Seah-Sandra

Sandra Seah

Joint Managing Partner
Singapore

Call me on: +65 6534 5266