The language of product liability

Reuters reports  that US government officials have released to the public internal General Motors documents dating from 2008 in which engineers were told to mind their language when discussing safety matters - with a view to how internal documents would look to outside observers. They are instructed not to use expressions like "safety" and "defect" when identifying product risks, and "explicitly told them not to use inflammatory terms including 'widow-maker' and 'Hindenburg'." And whoever used "inflammatory" and "Hindenberg" in the same sentence should have known better, too.

Did anyone really have to be told this? Or am I just reading this from a cautious lawyer's viewpoint? Seriously, though, there are important points here - first, that what engineers write in their reports could be prejudicial, but second (as the Reuters article points out, quoting a NHTSA official) that the instructions rob the engineers of some of the vocabulary that they might need in order to communicate to others in the organisation the seriousness of a problem. "Defect" is hard to do without: "Hindenberg" will never have a place in such a document.

Information about alleged vehicle defect does not have to be disclosed

In a decision of the Information Commissioner [2014] UKICO FS50527543 the complainant had requested information held by VOSA regarding the Porsche Cayman vehicle, and in particular the VOSA safety evaluation of the vehicle throttle malfunction. The Driver and Vehicle Standards Agency stated that the information was exempt from disclosure under section 44 of the FOIA (prohibitions on disclosure), by virtue of the Enterprise Act 2002. Section 44(1)(a) of the FOIA says that information is exempt if its
disclosure is prohibited by, or under, any enactment.

Section 237 of the 2002 Act makes it an offence to disclose 'specified information' which relates to the affairs of an individual, or business of an  undertaking, during the lifetime of the individual or while the undertaking continues to exist. Section 238 clarifies that information is specified information if it comes to a public authority in connection with the exercise of its functions. The Information Tribunal has previously been asked to consider the use of section 237 as a statutory prohibition on disclosure and it has concluded it can be used in this way (Dey v ICO and OFT (EA/2006/0057)).

The Commissioner considers that the requested information is ‘specified information’ as defined under EA2002, section 238 (1) (c). This is because it has come to the DVSA in connection with the exercise of a function it has under, or by virtue of, 'such subordinate legislation as the Secretary of State may by order specify for the purposes of this subsection.' As the enforcement authority responsible for vehicle safety, the DVSA was exercising its function under the General Product Safety Regulations 2005. Those regulations (which implement the General Product Safety Directive 2001/95/EC) are subordinate legislation specified by the Secretary of State, and so fall within category (c) of section 238 (1) of the EA2002.

The Commissioner's decision is that the DVSA has correctly applied this exemption and does not need to take any further action.

Mercedes' 'Agility' HP contract not a supply of goods

The Upper Tax Tribunal has ruled that hire purchase agreements are not necessarily to be considered as supplies of goods at the moment they are made. The economic purpose of Mercedes-Benz’s ‘Agility’ programme was not to result in a transfer of ownership, although that might happen. Output tax on the hire of goods under an HP agreement was due over the lifetime of the contract, rather than right away. The tax treatment of the transaction would therefore depend on whether the hirer would normally take ownership of the goods at the end of that particular type of contract, or whether this was merely one possible eventuality.

Mercedes-Benz Financial Services UK Ltd v Revenue And Customs [2014] UKUT 200 (TCC) (02 May 2014)

Never agree to agree

In  Dany Lions Ltd v Bristol Cars Ltd [2014] EWHC 1924 (QB) (01 May 2014)  the court had to consider matters arising from an earlier case (no report available as far as I can see although the story is here in the Telegraph), in which the judge found against Bristol, who had entered into a contract to carry out work on a 405D which went so far as to make it into a convertible and to install an automatic transmission - described by one enthusiast as 'the two worst things you could do to that car' (see the comments on http://jalopnik.com/bristol-cars-still-pissing-off-everybody-as-is-traditi-1470234731). A price was - er - mentioned but Bristol, which had been bought out of administration a few years ago, later insisted it was only an estimate, and anyway they found themselves unable to carry out the work because of a lack of skilled labour and the fact that the car was never designed to take a 'slushbox'. The owner, a solicitor (of course! although that statement involves piercing a corporate veil and working out a simple anagram) had the work carried out elsewhere, pursuant to a settlement agreement, and sued for the extra cost.

The settlement agreement itself illustrates an important principle. It provided for the owner to use reasonable endeavours to find another restorer willing to do the work, by a specified date. At trial, one issue was whether this was enough to create a legal obligation, because the owner narrowly missed the date. It was central to the question of whether damages could be recovered. The High Court held that as long as the object of the endeavours could be ascertained with enough certainty and there were sufficient objective criteria by which the court could evaluate whether performance of the obligation should be fulfilled, an obligation to use reasonable endeavours could be enforced: but certainty could not be established if the object was a future agreement - if matters had been left open for future negotiation - the necessary certainty was lacking, because the parties may have had differing views of what was to be performed when the time came to negotiate. The High Court decided that, as parts of the agreement had been left open for future negotiation, it had no objective criteria against which to judge whether enforcement or refusal to comply with the term was reasonable in the circumstances. Because it was too uncertain to give rise to enforceable obligations the owner was entitled to damages for breach of contract.

The High Court claim was settled by a consent order on terms under which execution was stayed pending Bristol trying to get the Court of Appeal to entertain an appeal, for which the judge had refused to give leave.If the claimant wanted to enforce the judgment it had obtained, it had to give at least seven days' notice. There was a bit of an argument about whether this had in fact been done, but in the end the judge ordered the defendants' solicitors to hand over the money which was in their client account, but stayed pending the Court of Appeal's decision on whether to allow the appeal to proceed.

GM owners claim bankruptcy fraud to keep recall suits alive

In the latest of many twists in the American ignition switch scandal, Automotive News reports (subscription required to read more than the headline) that 'GM's request for court protection from 50 car-owner lawsuits seeking compensation for millions of recalled autos with defective ignition switches [has been] attacked as legally “unsupportable.”' Reuters explains in greater detail, if you feel the need to know more.

The short version is that GM has filed a motion in the Bankruptcy Court for the Southern District of New York (where it seems plaintiffs have also filed a class action claim to forestall this tactic: I am not sure which came first, and it doesn't seem to matter very much for the purpose of this posting), seeking protection against claims that date from before its 2009 bankruptcy and eventual re-emergence as 'new GM'. In other words, they argue that the plaintiffs' claims are against the defunct old company not the new one. That certainly has logic to it, but it doesn't strike me as an attractive argument. Still, when did lawyers ever worry about the aesthetics of the cases they plead?

Honda Motor Europe Ltd & Anor v Powell & Anor [2014] EWCA Civ 437 (11 April 2014)

Honda Motor Europe Ltd & Anor v Powell & Anor [2014] EWCA Civ 437 (11 April 2014) is noteworthy because it has a pretty obvious motor industry angle. Apart from the obvious, though, it's about Honda's group pension scheme, which until
Honda of the UK Manufacturing Ltd ("HUM")
 appeared on the scene had only one company member. The case concerned the interpretation of the manufacturing company's  Deed of Adherence dated 6 October 1986 by which it became a participating employer in the scheme and membership of the scheme was opened to its employees. The question for the Court was whether the Deed of Adherence conferred scale benefits on the HUM members which differed from (and were much less generous than) those in the existing scheme, or whether further documentation was required to produce that result. This turned on the meaning of the provision in clause 1 of the Deed of Adherence which stated that:

"[HME] … hereby extends the benefits of the Scheme to all eligible employees and directors of [HUM] with effect from [1 August 1986]"

The judge at first instance held that it did not confer those scale benefits, and on appeal the Court of Appeal agreed, dismissing the appeal. Important, certainly (£47 million at stake) and interesting if pension schemes are your thing - but not really the sort of subject we need to cover in depth here.

GM puts two engineers in recall probe on paid leave

I have deliberately not been posting about the GM recall affair in the US. Only so much news of what is going on over there is really of interest to British and other European readers, and we don't have Chevrolet Cobalts over here (although we do have Astras and Zafiras, built on the same platform - but presumably with different ignition switches - and soon we won't have more than a handful of Chevrolet cars anyway, which is another story altogether). That affair, though, is probably worth coming back to one day. For now, I just want to comment on the story that GM has sent two of its engineers on paid leave.

According to Just Auto, GM sent the two home after an interim report from the former US attorney who is conducting an independent investigation into the matter. The allegation is that GM knew about the problem with the switches, which can fail in use and deprive the car of braking and steering systems among other things: 13 fatalities are attributed to the problem. What GM did, or didn't do, about it is what everyone wants to try to work out. The two engineers are presumably involved in what happened back in the early 2000s: their identities have been mentioned in the media, but it adds nothing to this story to speculate on who they are.


The reason I considered this interesting enough to write up is this: if you wish to be able to deal with an employee in this way, and there are many reasons why you might so wish, you have to rely on the contract of employment. You have a duty to provide your employees with work, not just to pay them, and however generous it might seem to pay an employee for not working - in the classic case, paying them to tend their garden instead - you can only do this with their agreement, and that agreement is best obtained in advance, when they sign their contract. Most contracts of employment I have seen in recent years address this point, but there might be some 'legacy' contracts floating around, as old as if not older than a Chevrolet Cobalt, which don't have it.