Distributors’ Product Liability – Forfeiture of the Right to Damages

1 April 2024 - Michael Fries

Under Spanish law, distributors are considered equal – in terms of liability – to the manufacturer to the extent that they have placed the defective products on the market.

Michael Fries Abogado & Rechtsanwalt +34 91 319 96 86

Hence, they are subsidiarily liable for defective products, i.e. under certain circumstances instead of the manufacturer of such products. As such, they are held liable when the manufacturer cannot be identified or where the distributor does not communicate the manufacturer of the defective product to the aggrieved party within 3 months.

From the manufacturer of a defective product, the aggrieved party may claim compensation for damages within 10 years (period of forfeiture). Before the end of this period, a legal action must be brought; an out-of-court claim is not sufficient. According to Spanish law, this period of forfeiture starts in the moment the manufacturer places the product on the market.

However, in case of product liability claimed against a distributor, the question arose, when the 10-year period starts to run, i.e. whether the determining factor was equally the moment the manufacturer places the product on the market. This question was recently clarified by the Spanish Supreme Court (Tribunal Supremo).

In the case at hand, the claimant had claimed damages from a distributor due to the defectiveness of a hip prosthesis sold by the latter. The distributor belonged to the same group of companies as the manufacturer and had not disclosed the manufacturer to the aggrieved party before the lapse of the 3-month period. Due to this non-information, in principle, the distributor would have been considered subsidiarily liable, in place of the manufacturer. However, the competent provincial court had rejected the claim for damages on the grounds that the 10-year period had expired, and the right to compensation had been forfeited. It held that the period of forfeiture started the moment the prosthesis was placed on the market by the manufacturer.

The Spanish Supreme Court, however, reversed the ruling of the provincial court in favour of the claimant. It found that, unlike the general 3-year liability period for defective products, the 10-year period of forfeiture was an objective period which did not depend on the moment the aggrieved party became aware of or asserted their rights. Accordingly, it was irrelevant when the defective prosthesis was implanted in the claimant.

The Supreme Court argued, however, in the case of subsidiary liability of the distributor, the moment the defective product was placed on the market by the manufacturer could not be used as a reference for the calculation of the (non-) expiry of the period, but rather the moment the distributor placed the product on the market had to be the point of departure. In the present case, the distributor was held liable for this reason, as they had not proven the time at which they had placed the defective hip replacements on the market.