Are you ready for BREXIT?

You may love or despise the the European Union, but we are leaving.

For the last 47 years we have taken our place among the nations of Europe – helping to shape and form its European Institutions – working together to create the Single Market and Customs Union.

Trading relationships have blossomed as:-

• Rules and regulations have been harmonised
• Internal tariffs and Customs Declarations have been abolished
• Hard borders have been removed
• Supply chains have been integrated

Businesses of all shapes and sizes have learnt to trade with Europe, supplying our goods and services – building relationships with our customers and suppliers across Europe.

But we have taken our freedom to trade with Europe for granted – forgetting or perhaps resenting the harmonised rules and regulations that make that a viable choice.

They saw a mirage that was so clear,
words of caution were project fear,
so they voted to get out of here,
now as Brexit draws near,
reality will start to interfere,
with the vison they held so dear

Phil Stunell 2020

As we come to the end of the ‘transition period’, negotiations with the EU about our future trading relationship are stalled – with ‘No Deal’ now the most likely outcome – UK firms trading with Europe face inevitable disruption.

One problem for UK producers is the way that the EU balances the rights of consumers and producers in the Product Liability Directive, and the General Product Safety Directive. These make producers responsible for the safety of their products, allowing consumers to claim compensation when things go wrong, and requiring producers to work with the regulators to remove unsafe products from circulation.

The practical problem with this approach is that it is impractical for ordinary consumers to sue a producer of imported goods, in for example Taiwan, outside the jurisdiction of the European Legal System.

So the EU directives define the producer as anybody who:-

• Produces the product or any of it’s component parts, or
• Incorporates the product in their own product, or
• Attaches their brand name to the product, or
• Imports the product into the European Union

Making all producers involved in the supply of defective products jointly liable for any harm caused by them, ensures that consumers can always seek compensation in Europe, where the the EU Directives apply.

By choosing to leave the EU – opting out of the Single Market and Customs Union – we are also rejecting the authority of the European Courts and leaving the EU’s jurisdiction.

But this creates is a problem for UK producers exporting to Europe. After 31 December this year, – their European clients will no longer just be ‘customers’ or ‘distributors’ – they will become importers into the European Union, and therefore a producer of the product.

This means that their European distributors will:-

• Become Strictly Liable for any defects in the products imported from the UK, and also
• In the case of regulated products, responsible for achieving and maintaining compliance with all the relevant regulations.

From a European perspective this ensures that:-

• Somebody who is subject the Jurisdiction of the European Courts is held accountable for the safety and compliance of the products supplied in Europe
• So, consumers can bring claims for compensation ‘within Europe’.

This is a non-negotiable principle that underpins the free movement of goods within the EU.

So, if you are exporting goods to Europe and have not already agreed who in Europe will be responsible the safety and compliance of your products in January, you are still not ready for BREXIT!

While the UK Government are encouraging us to ‘Check – Change- Go’ – to some unknown destination – the EU have published a series of detailed and practical guides to Brexit explaining what will change and why.

If you are designing, manufacturing or supplying physical products and want to understand more about Product Liability – why join one of our Product Liability Training courses – now available on-line or in-house.