• 2024-Oct-30

TALKING POINT on IBI

In 2002, a US yard delivered a 40ft powerboat to an American buyer that fully complied with US regulations. The purchase agreement is a standard contract that does not contain any special arrangements or deadline extensions. 
Over time, the boat was used in different climate zones in the USA, taken out of the water for maintenance, stored outside etc. 
In 2024, unfortunately, an explosion occurs on board during refuelling, costing two people their lives and seriously injuring two others. The yacht then burns out almost completely. 
The owner of the boat later sues the shipyard in a US court for a three-digit million amount! The court accepts the claim. The owner argues that the fuel system was once incorrectly designed and installed and that this was the cause of the explosion. When asked by the defence lawyer, he is unable to present any evidence to the court that his craft, or rather its fuel system, has ever been serviced by professionals. 
Based on the condition of the boat, also an expert can no longer determine beyond doubt what exactly caused the explosion. 
The US court decides that the manufacturer is not liable due to a lack of evidence regarding the proper servicing of the fuel system. The possibility of a statute of limitations is not considered further.

This raises the question of what would probably have happened if this case had taken place in the EU's judicial area?

In such a case on EU soil, where a manufacturer should be held liable for an alleged design or quality defect after 20 years, two legal questions arise in particular: the statute of limitations for claims and the basis of liability. In the EU, there are rules on product liability and warranties. Both concepts include statutes of limitations, after which no further claims can be made.

• EU Product Liability Directive 85/374/EEC: This directive regulates the liability of manufacturers for defective products – manufacturers are liable for damages caused by defective products if a defect can be proven. However, there is a limitation period. Claims become time-barred at the latest 10 years after the product was placed on the market.
• EU Warranty Law: The usual warranty period in the EU is two years from the date of delivery of the goods. It is possible that a manufacturer is liable for hidden defects, but here too there are clear limitation periods – usually 2-3 years from the date of discovery of a defect.

In an EU context, a lawsuit 22 years after the boat was delivered would probably not be successful. Neither the EU Product Liability Directive nor national warranty laws would allow the manufacturer to be held liable for a design or quality defect after so long.

The state of maintenance of the craft would be of no consequence.