Articles

Forward
Boris Kozolchyk

OVERVIEW OF THE STUDY UNDERTAKEN BY THE NATIONAL LAW CENTER FOR INTER-AMERICAN FREE TRADE
Alejandro Hernandez Maestroni

The main purpose of this document is to provide an overview of the main aspects of the research project undertaken by the National Law Center for Inter-American Free Trade following the initiative of the law firm of Shook, Hardy & Bacon (NLCIFT Report). The NLCIFT Report analyzed the evolution and current status of product liability law and procedures in seven Latin American countries: Argentina, Brazil, Chile, Uruguay, Mexico, Costa Rica and Colombia. Each of these countries was dedicated a separate chapter that analyzed the main issues affecting product liability in the relevant jurisdictions.

THE RIGHT TO BE MISTAKEN: PRODUCTS LIABILITY IN PERU
Alfredo Bullard Gonzáles

Since 1991, with the publication of the Legislative Decree 716, Consumer Protection Law (Ley de Protección al Consumidor), products liability evolved remarkably in Peru. The National Institute for the Defense of Competition and Consumer Protection (INDECOPI) (Instituto de Defensa de la Competencia y de Protección al Consumidor), a government entity, was created in 1992 by Law Decree 25868 to solve disputes and enforce rules regarding adequate market performance and consumer protection. Together, this legislation and the INDECOPI established a new framework of conduct between suppliers and consumers within a free market system. This framework has made the role of the consumer more dynamic, transforming the consumer into the market’s protagonist.

Regarding the liability for products or services, this legal framework has established two different and clear responsibilities. First, the Ordinary Courts are in charge of assessing civil liability for damages to the consumer resulting from the noncompliance with agreed-upon terms and defective products and services. Second, the application of administrative liability in the form of sanctions is made by the INDECOPI and includes, products confiscation, and establishment closure. Further, a recent amendment allows INDECOPI to order corrective measures favoring the consumer, such as a money refund and change or product repair, among others.

The Peruvian model, the focus of this article, opposes models that seek to rule the relations of the consumption market. Instead, the Peruvian model seeks to make private autonomy and freedom to contract more dynamic rather than more restrictive. The goal is to create conditions that facilitate the making of independent decisions by the consumer.

. Within its powers there are the application of the rules of consumer protection, antitrust, elimination of bureaucratic barriers built up by state organizations, elimination of non-tariffs barriers, repression of unfair competition, dumping and subsidies, advertising, bankruptcy and insolvency cases, normalization system, and registration and defense of intellectual property. All these functions altogether under the same roof allow a better coordination and unification of the policies for the competition and the market’s development.

GENERAL TRENDS IN SOUTH AMERICAN PRODUCTS LIABILITY LAW: AN OVERVIEW
Dr. Jorge Mosset Iturraspe

The purpose of this article is to provide an introduction to the general trends of products liability law in South America. Products liability law incorporates components of the traditional fields of private and public law, such as torts, contracts, and administrative law, and imposes an increasing number of duties upon producers and distributors.

REPORT ON THE NATIONAL LAW CENTER FOR INTER-AMERICAN FREE TRADE’S MIAMI CONFERENCE ON PRODUCT LIABILITY
Philip A. Robbins

Significant changes in the law governing products liability claims against foreign manufacturers and exporters in Latin America demand the attention of U.S. companies, their counsel, and insurance carriers. Leading experts from the United States and Latin America arrived at this conclusion following a two-day conference in Miami, Florida, sponsored by the National Law Center for Inter-American Free Trade (NLCIFT) on September 20 and 21, 2001. The conference, which I had the privilege of chairing, followed a two-year analysis of Latin American product liability law and litigation conducted by the NLCIFT. Coupled with important procedural changes, developments discussed at the conference may require a reassessment of liability risks.

OVERVIEW OF U.S. PRODUCT LIABILITY REGIME
Sara D. Schotland

United States product liability law imposes liability on a manufacturer or seller whose product causes injury even though the manufacturer or seller has exercised all due care. Thus, “strict liability” is imposed; negligence need not be shown.

The United States recognizes three types of defect claims and multiple theories are often alleged. First, a manufacturing defect occurs when a manufactured item fails to perform according to the manufacturer’s own specifications. Second, a warning defect occurs when a manufacturer fails to adequately warn a consumer of latent risks. Most cases turn on whether the warning adequately communicates risks. “Adequate” warnings must convey the nature and severity of the hazard and provide instructions for safe use. For drugs and other unsafe products, the warning facilitates informed consumer choice. For example, with a warning a consumer can weigh the side effects, allergies, and other concerns before taking medication. Third, a design defect occurs when a product’s risks outweigh the benefits of the design. These claims necessarily involve application of a risk to benefit analysis. The availability of feasible, cost efficient, alternative designs that remain consistent with the intended use of the product without causing injury also factor into the analysis.

MIAMI CONFERENCE SUMMARY OF PRESENTATIONS
Transcribed and edited by John F. Molloy