LIABILITY OF MANUFACTURERS
Historical legal regime
The user of defective goods benefits from several causes of action against the vendor or manufacturer. Several types of actions may enable the buyer of defective products to terminate the sale, decrease the sale price, or receive compensation for damage.
- Latent defects (vicios ocultos, Article 1484 et seq. of the Spanish Civil Code1);
- "Common" civil liability whether tortious (Article 1902 et seq.2 of the Spanish Civil Code) or contractual (Article1101 et seq.3 of the Spanish Civil Code);
- Strict liability of the manufacturer of a defective product (Articles 128 to 149 of the Legislative Royal Decree 1/2007, of November 16, which approves the combined texts of the General Law for the Defense of Consumers and Users and other complementary pieces of legislation (Real Decreto Legislativo 1/2007, de 16 de noviembre, que aprueba el texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios y otras leyes complementarias; "LRD 1/2007").
The first specific regulation on liability for damage caused by products was established by Law 26/1984, of July 19, for the Defense of Consumers and Users (Ley 26/1984, de 19 de julio, General para la Defensa de los Consumidores y Usuarios; "Law 26/1984"). Without going into detail, that law allowed a claim for any type of damage caused by the use or consumption of a product. It also contained a special strict liability system with very limited possibilities of defense for certain products and services (food, hygiene and cleaning products, cosmetics, medicinal products, sanitary services, gas and electricity supply, electrical appliances, elevators, means of transport, motor vehicles, and toys and products for children).
When Spain had to implement EU Directive 85/374/EEC of July 25, 1985, on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products (the "Product Liability Directive"), it did not amend the relevant provisions of Law 26/1984, but rather enacted a completely new law dedicated only to implementation of the Product Liability Directive. That piece of legislation was Law 22/1994, of July 6, on Civil Liability for the Damages Caused by Defective Products (Ley 22/1994, de 6 de julio, sobre Responsabilidad Civil por los Daños Causados por Productos Defectuosos; "Law 22/1994").
Law 22/1994 limited the rights of consumers with respect to the provisions of Law 26/1984, particularly its special regime of strict liability. Doubts arose as to whether both legal regimes could be applied to the same case. The judgment of the European Court of Justice of April 25, 2002 (Case C-183/00, María Victoria González Sánchez v. Medicina Asturiana, S.A.), answered that question: [T]he rights conferred under the legislation of a Member State on the victims of damage caused by a defective product under a general system of liability having the same basis as that put in place by the Directive may be limited or restricted as a result of the Directive's transposition into the domestic law of that State.
In view of the judgment, and of the final and transitory provisions of Law 22/1994, Law 26/1984 could not be applied to any damage caused by defective products that were put into circulation after July 7, 1994 (the effective date of Law 22/1994). However, it has not been uncommon after 2002 to see cases where claimants have still tried to ground their claims on both legal regimes.
In 2007, LRD 1/2007 repealed Law 26/1984 and Law 22/1994. However, it expressly maintains, in its Third Transitory Provision, a legal regime that contains mainly the same provisions of Law 26/1984 for products put into circulation before July 8, 1994, and it essentially keeps the wording of the articles of Law 22/1994 for liability on defective products, although it gives them a different numbering.4 In sum, under the Spanish legislation currently in force, a person who has suffered damage caused by a defective product has two actions available for claiming a liability in tort:
- The one in LRD 1/2007 (strict liability); or
- The general action for tort liability (fault or negligence of the defendant has to be proved, although case law has softened that requirement and even reversed the burden of proof of the fault or negligence under certain circumstances) set forth in Article 1902 of the Civil Code.
In the first place, LRD 1/2007 defines the "producer." Pursuant to Article 5 of LRD 1/2007, the producer is the manufacturer or the importer of the product into the European Union, as well as any other entity that presents itself as a producer by putting its name, trademark, or other distinguishing feature on the packaging or marketing materials of the product. This concept of "producer" has to be linked to Article 138 of LRD 1/2007, which states that producers are, in addition to those defined in Article 5 of LRD 1/2007, those who manufacture or import into the European Union a finished product, a component, or a raw material.
The concept of "defective product"5 is also defined is the Product Liability Directive and LRD 1/2007. Pursuant to Article 137 of LRD 1/2007, a product is defective "when it does not provide the safety that can be legitimately expected from it," taking all circumstances into account, particularly its presentation, its reasonably expected use, and the time when the product was put into circulation. Spanish legislation has added that a product will be considered defective if it does not provide the safety usually provided by the same products of the same series. A product shall not be considered defective for the sole reason that a safer product was made later.
Spanish legislation does not contain any specific regulation related to the reason why the product is defective (such as a manufacturing defect, a design defect, or failure to warn), but rather considers a product to be "defective" if it does not pass the test of product "safety." As a consequence, products can be found to be defective on the basis of manufacturing defects, design defects, or failure to give proper information about the product risks.
Liability resulting from defective products is based on strict liability. The injured person is required to prove the damage, the defect, and the causal relationship between defect and damage (Article 139 of LRD 1/2007). Unlike strict liability for defective products, traditional Spanish civil liability rules require the offender to have acted with fault or negligence for it to be liable.
It is not uncommon for the courts to take into account a claimant's difficulty in proving the existence of a defect in a product (especially when the defect is a manufacturing or design defect, each of which is complex to evidence from a technical perspective). This can lead, in practical terms, to a reversal of the burden of proof about the existence of the defect. If the claimant is able to show the absence of fault with respect to the use of the product and to exclude reasons for injury other than a product defect, then the manufacturer should be prepared to prove that the product is not defective. Some precedents have accepted the manufacturer's proof showing that its processes and controls would make the alleged defect very unlikely.
The producer's defenses to mitigate or escape liability are limited to those set in Article 140 of LRD 1/2007. The producer shall not be liable if it proves that:
- It did not put the product into circulation;
- The defect did not likely exist when the product was put into circulation;
- The product was neither manufactured for sale or any form of distribution for economic purpose, nor manufactured, imported, supplied, or distributed by the producer in the course of its business;
- The defect is due to compliance of the product with mandatory regulations issued by the public authorities;
- The state of scientific and technical knowledge when the product was put into circulation did not enable the discovery of the defect. Spain, making use of Article 15.1.(b) of the Product Liability Directive, has excluded the state-of-the-art defense for producers of medicinal products, food, or alimentary products for human consumption; and
- In the case of a manufacturer of a component, the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the product manufacturer.
The producer's liability may be reduced or disallowed when the damage is caused both by a defect in the product and by the fault of the injured person or any person for whom the injured person is responsible (Article 145 of LRD 1/2007). The reduction of the producer's liability will be determined on a case-by-case basis, and it will depend on the degree of the injured party's intervention in the damage caused.
A civil action based on LRD 1/2007 is subject to two limitation periods:
- The injured party has three years to initiate legal proceedings for the recovery of damages. The limitation period begins to run from the date when the injured party suffered the damage, provided that he or she is aware of the identity of the person responsible for causing the damage (Article 143 of LRD 1/2007). Spanish legislation differs from the provisions of the Product Liability Directive (Article 10.1), which state that the limitation period will begin to run on the day on which the plaintiff became aware of the damage, the defect, and the identity of the producer. The Spanish rule was introduced to obtain more legal certainty on the date when the limitation should start to run.6
- The producer's liability expires at the end of 10 years from the date on which the producer put the product into circulation, unless the injured person has in the meantime initiated legal proceedings against the producer (Article 144 of LRD 1/2007).
An action under LRD 1/2007 (strict liability) may recover for death, personal injury (including costs associated with the treatment of the relevant injury and loss of earnings), and damage exceeding €390.66 that occurred to items of property (other than the defective product itself), provided that those items are objectively intended for private use or consumption and have been dedicated mainly to such use or consumption by the injured person. A general action for tort liability may recover the rest of the injured party's damages. Those additional damages include damages for the defective product itself, moral damages,7 and damages for other items of property that are intended for production or professional use.
According to Article 141.b) of LRD 1/2007, the aggregate liability of a producer for damages resulting from death or personal injury caused by identical items with the same defects shall be limited to the amount of €63,106,270.96.
Spanish law does not specify any compulsory method for valuing personal injuries. In practice, both claimants and courts use a scale established for injuries incurred in traffic accidents,8 which is updated every year when determining the amount of compensation. This scale provides a compensation for death, depending on the identity of the claimant and the age and financial situation of the decedent; compensation for permanent or temporary disability; and a method of calculating the amount to be paid for the time needed to achieve full recovery.
Moral damages are even more difficult to quantify. It is necessary to consider the circumstances in each case and to value the type and severity of the injury (e.g., pain and suffering or aesthetic damage).
Spanish law does not allow punitive damages. A defendant can be compelled to compensate only the actual damage proved by the claimant.
Under Spanish legislation on civil procedure, certain groups of injured parties may bring claims in a way that has similarities with class actions. These actions were created to allow better recovery against illegal behaviours that have caused damage to a group of consumers, allowing better protection of both collective interests9 and diffuse ones.10
Article 1111 of Law 1/2000, on January 7, of Civil Procedure (the "LCP") states that associations of consumers and users legally incorporated shall have standing to defend in court the rights and interests of their members, those of the association, and the general interests of consumers and users.
When the associations or cooperatives do not fulfil the requirements of LRD 1/2007 or the regional legislation, they are able to represent only the interests of their members and those of the association, not the general interests, collective or diffuse, of consumers and users (Article 24 of LRD 1/2007).
When a group of consumers and users whose members are easily determined have been injured, legal standing to represent those collective interests is given to the associations of consumers and users; the legally constituted entities whose purpose is the defense or protection of the collective interest; and the groups of affected persons.12 When it is impossible or very difficult to determine the identity of those who have been injured, legal standing is limited to the associations of consumers and users that are representative according to certain legal criteria.13
Others have legal standing to defend the collective and diffuse interests of consumers and users: the Public Prosecutor, entities authorized by European legislation, the National Institute of Consumption, and the organizations and entities of the Autonomous Regions and local corporations with competence in the defense of consumers (Articles 11.4 of LCP and 54 of LRD 1/2007).
In proceedings brought by associations, by entities constituted for the protection of the rights and interests of consumers and users, or by groups of affected persons, the LCP states that those who have suffered damage have to be called to the proceeding,14 in order to allow them to assert their individual rights or interests (Article 15 of LCP), if they deem it convenient.
In the case of proceedings where the injured persons are known or easily determined, the plaintiff shall have previously communicated its intention of filing a claim to those concerned, and after the call made by the court, the affected individuals may appear in the proceeding at any time, but they may carry out only those procedural acts that have not expired (e.g., if the term for filing the writ of defense has elapsed, the party who has appeared afterwards will not be allowed to file such writ of defense). The LCP allows the plaintiff to ask the court to take measures to determine the identity of the injured persons, including requesting the defendant to cooperate (Article 256.1.6º of LCP). If the defendant refuses to cooperate, the court may order the necessary intervention measures, including entry and search, to find the documents or information requested. The defendant may also have criminal liability for disobeying a court order (Article 261.5ª of LCP).
In the case of proceedings where the injured parties are unknown or difficult to determine, the call made to the affected individuals shall suspend the course of the proceedings during a period no longer than two months. The proceedings will then resume, including all of the individuals who have appeared as parties, and after this stage, no further individual appearances will be allowed.
An individual's appearance in the proceeding implies that he or she will be a plaintiff independent from the group, with all rights and obligations resulting from a claim of his or her individual right or interest.
Article 221 of the LCP regulates the judgment in cases initiated by associations of consumers and users. Affected individuals who have not been party to the proceedings may benefit from the judgment, substantially increasing the judgment against the defendant.
The judgment shall, in the first place, determine those specific individuals who can benefit from the ruling. When individualization is not possible, the judgment shall state the data, features, and requirements necessary for an affected individual to demand payment and, as the case may be, to request enforcement of the judgment, or to take part in the enforcement proceedings, when the claimant association requests enforcement. The court must recognize those who are beneficiaries of the judgment, subject to the relevant individuals' proving that they fulfil all requirements and features to demand the payment set in the judgment. The court will set forth its decision through an order, which will provide the right to enforce the judgment (Article 519 of LCP).
If the judgment contains, instead of an award of money, a declaration stating that a specific activity or behaviour is unlawful, the judgment shall determine whether it has procedural effects beyond those who have been party to the relevant proceedings.
When individual consumers and users have been party to the proceedings, the judgment has to expressly decide their claims.
Finally, it shall be noted that the judgment will have the effect of res judicata not only between those who have been party to the proceedings, but also for those individuals who have the same rights as those that have been decided in the proceedings.
Traditionally, Spanish criminal liability applied only to individuals, according to the premise societas delinquere non potest (legal entities cannot commit a criminal offense). However, since December 23, 2010, legal entities may also commit certain criminal offenses (such as those related to unpaid taxes, drugs, and bribery), but not any of the offenses discussed below.
The criminal offenses, which we will describe, apply to persons acting on an individual basis or as the directors or managers of a company. Article 31 of Organic Law 10/1995, of November 23, on the Criminal Code (the "Criminal Code") provides that those who act as de facto or legal directors of a company, or in legal or voluntary representation of another person, may be held personally liable (even if the director or manager has not personally violated conditions for the criminal offense), provided that the company they represent has committed the criminal offense.
Nevertheless, criminal liability requires an action or omission of the director that causes or allows the criminal offense to take place. The concept of legal or de facto directors, or the one of representative, seeks to identify the individual or individuals who have the effective control and direction of the company's activities. Therefore, directors and managers may avoid incurring criminal liability if they can prove that they did not take part in the relevant actions or that they delegated the functions which resulted in the commission of the criminal offense to someone with the capacity (the knowledge, the authority to make decisions, and the economic resources to implement the decisions) to have avoided the offense.
Two groups of criminal offenses might be related to harmful products or services:
- If the criminal behavior has caused death or injury to people, the criminal offenses of homicide or injury may apply. In most cases, the criminal offense will have been committed not intentionally, but as a result of imprudence or negligence, which significantly reduces the punishment (in less severe cases, the penalty may consist only of a fine); and
- A second group of criminal offenses punishes the creation of a risk. Their intention is to prevent damage before it takes place.
This second group of criminal offenses is found under Articles 359 to 366 of the Criminal Code, in a chapter that deals with criminal offenses against the public health:
- Production or illegal traffic of substances harmful to health (Articles 35915 and 36016 of the Criminal Code). The offender will normally be the producer, the seller, or any other person involved in the commercial transactions. The criminal offense may be committed by acting without authorization (Article 359) or selling or supplying those products without complying with the provisions that regulate them (Article 360);
- Crimes related to medicinal products (Articles 36117 and 36218 of the Spanish Criminal Code). The offenses a consist mainly of selling deteriorated medicinal products—those that have exceeded the expiration date for their consumption or do not comply with the relevant technical requirements—creating a risk for the life or health of people (Article 361); or of altering the amount, dosage, or composition of a medicinal product, eliminating or diminishing its effects; imitating or simulating a medicinal product or other product that has beneficial effects for health; or offering, displaying, advertising, or selling medicinal products, knowing that they have been altered, provided that the actions create a risk to the life or health of people (Article 362). In order to apply these criminal offenses, it is necessary to analyze the compliance of the relevant product with the applicable regulations. The main piece of legislation with respect to medicinal products is Law 29/2006, July 26, of Guarantees and Rational Use of Medicinal and Sanitary Products (Ley 29/2006, de 26 de julio, de Garantías y Uso Racional de los Medicamentos y Productos Sanitarios); and
- Crimes related to food (Articles 363,19 364,20 and 36521 of the Spanish Criminal Code). These criminal offenses mainly punish putting people's health at risk by supplying food that does not comply with the relevant regulatory provisions (Article 363); altering food with nonauthorized additives (either directly or through the supply of illegal substances to animals intended for human consumption; Article 364); or contaminating food or water with infectious or harmful substances (Article 365). In order to determine whether a criminal offense has been committed, it is necessary to consider the regulations dealing with food, such as the Spanish Alimentary Code.22
Although the criminal liability for these offenses applies to individuals, Article 366 of the Criminal Code provides that the establishment, factory, or laboratory where the criminal offense was committed may be closed for up to five years or, in extremely severe cases, permanently.
LIABILITY OF DISTRIBUTORS, SELLERS, AND RETAILERS
Distributors, sellers, and retailers may be liable under the same conditions that apply to the producer. Even if the supplier (distributor, seller, or retailer) of the product is not the importer or the apparent manufacturer, it can be considered the producer (Article 138 of LRD 1/2007) if it cannot inform the injured person of the identity of the producer or importer of the product within three months (the Product Liability Directive stipulates identification only "within a reasonable time"). It will be liable in any case when it has supplied the product despite knowing that it was defective (Article 146). Distributors, sellers, and retailers may also incur civil liability (under the general rules of the Civil Code) or criminal liability in the terms described in the previous section.
LIABILITY OF COMPONENT AND RAW MATERIAL SUPPLIERS
Manufacturers or importers of any component or raw material are considered to be "producers" by Article 138 of LRD 1/2007. They are liable for the defects of the components or raw materials that caused the defect of the product.
However, these manufacturers will not be responsible if they are able to prove that the defect was caused by the design of the product in which the component has been incorporated or by instructions given by the manufacturer of the finished product.
In practice, claims against the manufacturers of components are not common because the injured party does not usually have sufficient information to know that a specific component caused the product defect or to identify the component manufacturer.
In addition, when more than one person or entity can be held liable for a defective product, their liability to the injured person will be joint and several. Therefore, claimants do not need to bring their claims against the component manufacturers. The defendant who has compensated the claimant may recover from the other liable persons or entities an amount proportional to the liability of the others responsible.
PRODUCT RECALLS AND GOVERNMENT ADMINISTRATIVE INVESTIGATIONS OF PRODUCT DEFECTS
Directive 2001/95/EC of December 3, 2001, on General Product Safety (the "GPSD") deals with product safety, including the obligation of the manufacturer and distributor to provide the competent authorities with immediate information when they "know or ought to know, on the basis of the information in their possession and as professionals, that a product that they have placed on the market poses risks to the consumer that are incompatible with the general safety requirement" (Article 5 (3) of GPSD). Spanish law has implemented this legal obligation and specified the professionals who must meet this safety obligation.
THE GENERAL SAFETY OBLIGATION UNDER SPANISH LAW
Spain implemented the GPSD through Royal Decree 1801/2003, of December 26, on General Product Safety (Real Decreto 1801/2003, de 26 de diciembre, de Seguridad General de los Productos; "RD 1801/2003"). It states that producers and distributors must place only safe products on the market.
DEFINITION OF "PRODUCERS" AND "DISTRIBUTORS"
The term "producer" under Article 2.d) of RD 1801/2003 encompasses:
- The product manufacturer when it is set in the European Union and any other entity presenting itself as the manufacturer by affixing to the product its name, trademark, or other distinctive mark, or the entity that reconditions the product;
- The manufacturer's representative when the manufacturer is not established in the European Union or, if there is no representative established in the European Union, the importer of the product; and
- Other professionals in the supply chain, insofar as their activities may affect the product's safety.
A "distributor" is defined as any professional in the supply chain whose activity does not affect the safety of a product (Article 2.e) of RD 1801/2003).
Both the producer and the distributor have several obligations under RD 1801/2003 when one of their products is not safe. They must notify the authorities of the risk and cooperate with the authorities to adopt appropriate measures (Articles 6.123 and 6.424 of RD 1801/2003).
Both producers and distributors are subject to a general safety obligation for the products that they put on the market. The definition of a "safe product" is contained in Article 2.a) of RD 1801/2003: it is a product that, under normal or reasonably foreseeable conditions of use, including the duration of use and its service, installation, and maintenance requirements, presents no risk at all or risks so minimal as to be compatible with a high level of protection for the health and safety of persons. A number of elements need to be taken into account when determining whether a product is safe. They are listed in both the GPSD and RD 1801/2003 (e.g., the instructions of the product or the categories of consumers at risk when using the product). RD 1801/2003 states that product advertising should be considered, while there is no such express reference in the GPSD.
SCOPE OF THE PRODUCER'S AND DISTRIBUTOR'S OBLIGATIONS
Producers have to inform consumers and users, through adequate means, about those risks which are not immediately obvious and which may arise n the normal and foreseeable use of their products, taking into account their nature and duration and the people at whom the products are aimed (Article 4.2 of RD 1801/2003).
The actions that must be taken by a producer (and, for those contained in Article 6, also by a distributor) are listed in Articles 4.3 and 6 of RD 1801/2003:
- The producer has to remain informed of the risks posed by its products and duly inform the distributors (Article 4.3.a)). For this purpose, the producer shall keep a register of complaints, study those complaints that may indicate a risk and, as the case may be, carry out sample testing (or other adequate controls) of marketed products;
- If it discovers, or has enough evidence leading it to believe, that it has placed on the market a product which is not safe, then it shall take, without any prior requirement by the authorities, the appropriate actions to prevent the product risks, including warning consumers (by means, as the case may be, of special advertisements), withdrawing the product from the market, or recalling the product from consumers (Article 4.3.b));
- The producer has to indicate, on the product or on its packaging, the identity and details of the producer and the product reference or, where applicable, the batch of products to which it belongs, absent some justification not to do so (Article 4.3 c)). This information has to be kept for three years, except for products that have a "best before" date for their consumption; in that case, the information must be kept for one year after the expiration of the "best before" date;
- The producer must cooperate with the relevant administrative authorities, as required to take actions to avoid the risks of the products (Article 6.4);
- The producer must maintain under control the products that are subject to restrictive measures and not dispose of them until the authorization of the relevant administrative authorities has been received (Article 6.5); and
- The producer must notify the authorities of the existing risk posed by a product placed on the market or supplied to consumers in Spain (Article 6.1). The notification has to be filed with the competent organization of the Autonomous Region where the producer or distributor has its registered offices. If the product has been marketed in several Autonomous Regions, the Autonomous Region of the registered offices of the relevant producer or distributor shall immediately send the notification to the National Consumption Institute (Instituto Nacional del Consumo) so that it can inform the rest of the affected Autonomous Regions. The notification shall contain, at a minimum, information that allows precise identification of the product or batch of products; a complete description of the risk posed by the product; all of the useful information available for locating the product; and a description of the measures adopted to prevent the risks to consumers (Article 6.2).
The European Commission has adopted a guide to make the notification process easier for producers and distributors. This guide details the practical aspects of the process, and it contains a standard application for making the notification to the relevant authorities. The form can be submitted electronically through an internet web page, allowing the use of a single document to notify several affected Member States.25
Once a national authority has been made aware of a product's safety risk, depending on the extent of the risk incurred, the authority may be compelled to pass the information to the European Commission through the RAPEX system.26
Article 5 of RD 1801/2003 imposes certain obligations on distributors: they shall not distribute products that they know, or should know as professionals, are unsafe; they shall act diligently to comply with the applicable safety requirements, particularly during the products' storage, transport, and display; and they shall participate in the surveillance of the products' safety by informing the authorities and the producers of risks of which they become aware, providing—and retaining for three years information about the origin and destination of the products, and collaborating in the measures adopted for preventing risks.
According to Articles 8, 9, and 10 of RD 1801/2003, the authorities, either as the result of a complaint or on their own motion, may take the measures necessary to prevent risks to consumers. The measures adopted shall be proportional to the risks and the least restrictive of those possible. If the producers and distributors do not adopt the necessary measures for the prevention of the risks, the authorities may take those measures, including, among other things, prohibiting placement of the product on the market, withdrawing it from the market, or even, as a last resort, recalling it from consumers. Article 11 of RD 1801/2003 regulates the administrative proceedings that shall be followed in these cases.
Finally, the lack of compliance with the provisions of RD 1801/2003, or obstructing the measures adopted by the administrative authorities to prevent a risk, may lead to the imposition of sanctions as set forth in Law 14/1986, April 25, General of Health (Ley 14/1986, de 25 de abril, General de Sanidad) and in LRD 1/2007 (Article 8.4 of RD 1801/2003).
Depending on the type and severity of the violation, the sanctions may consist of fines up to €601,012.10 (or up to five times the value of the products or services that caused the infringement) and temporary closure of the establishment or factory for up to five years.
Pretrial discovery. This is not contemplated by Spanish procedural legislation. During the proceedings, the parties are allowed to request specific, clearly identified documents from other parties, but not to make general requests.
In Spain, information shared with an external lawyer with the aim of obtaining legal advice in the context of litigation or prelitigation, or for the client's defense, is protected in a way similar to the "attorney-client privilege."
Insurance. Article 131 of LRD 1/2007 enables the government to establish mandatory insurance for civil liability arising from damage caused by defective products, along with a guarantee fund to cover, totally or partially, damages resulting from death, intoxication, and personal injury. However, the provision has not yet been developed.
Contingency fee basis. In Spain, the attorney may agree with the client to be paid with a percentage of the damages awarded.
Legal costs. Article 394 of the LCP provides that the losing party shall pay the costs of the first instance, unless the court believes the case posed serious doubts (regarding either the factual or the legal grounds). Nevertheless, there is a legal limit for the costs that, in general, may be recovered from the losing party with respect to the fees of the attorneys and the other professionals not subject to official rates. Compensation for these items cannot exceed a third of the amount discussed in the proceedings for each party who can benefit from the ruling. Moreover, the legal costs are ordinarily calculated on the basis of recommendations of the court's bar. Those recommendations, in some cases, may further limit the ability to completely recover the amounts spent in the proceedings.
1 Article 1484 of the Civil Code: "The seller is bound to remedy [either through compensation or by the termination of the contract] hidden defects of the thing sold which render it unfit for the use for which it was intended, or which so impair that use that the buyer would not have acquired it, or would only have paid a lower price for it, had he known of them . . . ."
2 Article 1902 of the Civil Code: "Anyone who, by his acts or omissions, harms another, acting with fault or negligence, is obliged to repair the damage caused."
3 Article 1101 of the Civil Code: "Those who, in the fulfillment of their obligations, act with bad faith, negligence or delinquency [morosidad], and those who in any way contravene the purpose of their obligations, are subject to compensate the damages and prejudices caused."
4 Although we will not enter into any detail, as it exceeds the aim of this chapter, it shall be noted that LRD 1/2007 keeps the special strict liability regime of Law 26/1984 for a number of services, including sanitary services; repair and maintenance of electrical appliances, elevators, or motor vehicles; maintenance and installation of gas and electricity supply; and means of transport. This regime will also be applied, when no other specific legal regime governs, to those who build or market homes for damage caused by defects in the homes.
5 According to Article 136, the concept of "product" for the purposes of this liability includes not only electricity (as stated in the Product Liability Directive), but also gas.
6 The limitation period for the action based on Article 1902 of the Civil Code is only one year. However, its period begins to run on the date when the action could have been exercised (Article 1968.2 of the Civil Code). This provision has been interpreted in favor of claimants. For example, some case law holds that, in cases of personal injury, the limitation period shall not start to count until the injured party knows the full extent of the injury, as that is the moment when the claimant is ready to file the claim. This situation has made it difficult for defendants to succeed in alleging that claims are time-barred and has come under criticism by legal scholars.
7 There is no legal definition of "moral damages." However, case law has interpreted them as being compensation for injury to personal rights. Moral damages may arise, for example, when a person's health, beliefs, honor, freedom, privacy, or feelings are affected by illegal conduct.
8 Annex of Legislative Royal Decree 8/2004, of October 29, which approves the combined texts of the Law of Civil Liability and Insurance in Circulation of Motor Vehicles (Real Decreto Legislativo 8/2004, de 29 de octubre, por el que se aprueba el texto refundido de la Ley sobreResponsabilidad Civil y Seguro en la Circulación de Vehículos a Motor). This scale includes moral damages. Therefore, if LRD 1/2007 is the only legal provision alleged by the claimant, the defendant may argue that the eventual award should be less than the amount set in the scale, as LRD 1/2007 does not permit moral damages.
9 Those interests of a group of consumers and users where the identity of the affected ones has been determined or is easy to determine (e.g., those affected by the cancellation of a flight).
10 Those interests of a group of consumers whose identity is undetermined or very difficult to determine (e.g., those affected by an interruption of service by a mobile phone company or by a batch of defective food items).
11 The rules of Article 11 are general, so they will apply when no special laws confer legal standing.
12 Article 6.1.7º of the LCP recognizes the capacity to be party to the proceedings of a group of consumers and users only when the majority of those affected belong to the group.
13 Associations of consumers and users legally representative on a national basis are those that are registered with the National Registry of Associations of Consumers and Users. If the scope of the case is limited to one Autonomous Region, the requirements of the associations to be considered representative will be determined by the legislation of that particular Region. Further details on the requirements for inclusion in the National Registry can be found in Articles 22 to 37 of LRD 1/2007.
14 This call shall be made by the court clerk (Secretario judicial), who shall publish the admission of the claim in the media with coverage in the territory where the damage of those rights or interests has occurred.
15 Article 359 of the Criminal Code: "The person who, without being duly authorized, produces substances harmful for health or chemical products which may cause ravages [estragos], or sells or provides them, or trades with them, shall be punished with imprisonment from six months to three years and fine from six to twelve months, and special disqualification from profession or industry from six months to two years." Fines are expressed as a period of time rather than an amount of money. For the imposition of the fi ne, the court will determine an amount to be paid per day (ranging from €2 to €400) and the duration of the fine. Thus, in this particular case, the fine may range from €2 for six months (all months are considered to have 30 days), i.e., €360, to €400 for 12 months, i.e., €144,000.
16 Article 360 of the Criminal Code: "The person who, being duly authorized for the traffic of the substances or products mentioned in the previous article, sells or supplies them, failing to comply with the formalities prescribed in the respective Laws and Regulations, shall be punished with fine from six to twelve months and disqualification from profession or trade from six months to two years."
17 Article 361 of the Criminal Code: "Those who sell or deal with damaged or expired medicinal products, or medicinal products which do not comply with the technical requirements related to their composition, stability and effectiveness, or those who replace some of them with others, and in such a way that they endanger people's life or health, shall be punished with imprisonment from six months to two years, fine from six to eighteen months and special disqualification from profession or trade from six months to two years."
18 Article 362 of the Criminal Code: "1. The following shall be punished with imprisonment from six months to three years, fine from six to eighteen months and special disqualification from profession or trade from one to three years: "1º The one who alters the quantity, the dose or the original composition of a medicinal product, as authorized or declared, either when it is being manufactured or produced or in a subsequent moment, depriving the medicine, totally or partially, of its therapeutic efficacy, and in such a way that he endangers the life or health of people. "2º The one who, with the intention of selling or using them in any way, imitates or simulates medicines or substances that produce health benefits, giving them the appearance of being real, and in such a way that he endangers the life or health of people. "3º The one who, knowing its alteration and with the aim of selling or dedicating them to the use of other people, has on deposit, announces or advertises, offers, displays, sells, provides or uses in any way the said medicinal products, and in such a way that he endangers the life or health of people. "2. The penalties of disqualification foreseen in this article and the previous ones will be of three to six years when the acts have been committed by pharmacists, or by the technical directors of legally authorized laboratories, in which name or representation they act. . . ."
19 Article 363 of the Criminal Code: "The penalty of imprisonment from one to four years, fine of six to twelve months and special disqualification from profession, trade, industry or commerce from three to six years shall be imposed on producers, distributors or traders who put in danger the health of consumers by: "1. Offering in the market foodstuff omitting or altering the requirements foreseen in the laws and regulations about expiration dates or composition. "2. Manufacturing or selling beverages or foods intended for consumption by the public which are harmful for health. "3. Trafficking with rotten items. "4. Manufacturing products that have a use which is not authorized and which is harmful for health, or trading with them. "5. Hiding or removing items intended to be made useless or to be disinfected, in order to trade with them."
20 Article 364 of the Criminal Code: "1. The one who alters with additives or other nonauthorized agents capable of causing damage to people's
health foodstuff, substances or beverages intended for the alimentary trade, shall be punished with the fines of the previous article. If the offender were the owner or responsible for production by a factory of foodstuff, the penalty of disqualification from profession, trade, industry or commerce from six to ten years shall be added. "2. The same penalty shall be imposed on the one who carries out the following conduct: "1º. To administer to animals of which the meat or products will be dedicated to human consumption nonauthorized substances which generate risks for the health of people, or in doses higher than or for purposes different from those authorized ones. "2º To sacrifice livestock or to dedicate its products to human consumption knowing that they have been administered the substances mentioned in the previous section. . . ."
21 Article 365 of the Criminal Code: "The one who poisons or adulterates with infectious substances, or others that can be severely harmful for health, drinking water or foodstuff dedicated to consumption by the public or by a community of people, shall be punished with the penalty of imprisonment from two to six years."
22 Approved by the government through Decree 2484/1967, of September 21.
23 Where producers and distributors know or ought to know, on the basis of the information in their possession and as professionals, that a product which they have placed on the market or supplied to consumers in Spain poses risks that are incompatible with the general safety requirement, they shall immediately inform the competent authorities of the affected Autonomous Region.
24 Producers and distributors shall, within the limits of their respective activities, cooperate with the competent authorities on the actions taken to avoid the risks posed by products they supply or have supplied. In particular, they shall provide all of the appropriate information the authorities request, including that information which may be protected by commercial or industrial secrets (this last possibility is not expressly mentioned in the GPSD, which does refer to requiring "all necessary information from the parties concerned" in Article 8.1.(a).(ii)), within five days, except in urgent cases, when the term can be shorter. The information protected by commercial or industrial secrets will be neither divulged nor used for any other purpose.
25 This application form is available online at https://webgate.ec.europa.eu/gpsd-ba. The Commission has also issued guidelines on how to prepare and submit this notification form. These guidelines are available at https://webgate.ec.europa.eu/gpsd-ba/help.pdf (web sites last visited August 15, 2012).
26 RAPEX is the European Union rapid alert system for all dangerous consumer products, with the exception of food, pharmaceuticals, and medical devices. It allows for a fast exchange of information between Member States.
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