Article 2.4.7 Product Liability (Non-Contractual)

(a) Scope and Application:

This Article governs claims for harm caused by defective products under the tort of negligence, including where no direct contractual relationship exists between the claimant and the manufacturer, supplier, or distributor. It applies to claims brought within the ICT where the harm occurs, or where the defective product was supplied, used, or distributed.

(b) Basis of Liability:

(i) Manufacturers, suppliers, or distributors may be liable where the claimant establishes that:

(ii) The product was defective in design, manufacture, or lacked adequate warnings or instructions concerning known or reasonably foreseeable risks; and

(iii) The defect caused or materially contributed to the claimant’s injury, financial loss, or damage; and

(iii) The defendant owed a duty of care in the circumstances, consistent with the principles of negligence under this ICT Code.

(iv) The duty of care may extend to any person who could reasonably be foreseen to suffer harm from the defective product’s use or malfunction, including third-party users, bystanders, or maintenance providers.

(c) Types of Defects:

Product defects may include:

(i) Design Defects: Where the product, as designed, poses a foreseeable and avoidable risk when used as intended or in a reasonably foreseeable manner.

(ii) Manufacturing Defects: Where the product deviates from its intended design due to errors or flaws in the production process.

(iii) Failure to Warn: Where the defendant fails to provide adequate instructions, labels, or warnings about known or foreseeable risks that are not obvious to ordinary users.

(d) No General Strict Liability:

This ICT Code does not establish a general regime of strict liability for product defects. Liability shall be grounded in negligence, misrepresentation, or other actionable conduct under this Code.

(e) Causation and Burden of Proof:

(i) The claimant bears the burden of proving that the product defect caused or materially contributed to the harm suffered.

(ii) Where appropriate, the ICT Court may apply a rebuttable presumption of defect or causation where the product clearly malfunctioned during normal use, and no intervening factors are evident.

(iii) In complex or multi-component products, causation may be inferred from system malfunction or failure consistent with the ordinary operation of the product, where no other reasonable explanation is evident.

(f) Liability of Distributors and Retailers:

Distributors and retailers may be held liable where:

(i) They failed to exercise reasonable care in the handling, storage, or sale of the product; or

(ii) They made representations about the safety or suitability of the product that contributed to the claimant’s harm; or

(iii) They failed to pass on material warnings or recalls issued by the manufacturer.

(g) Digital and Embedded Products:

This Article applies equally to physical products and digital products or systems embedded in physical goods, including software-controlled devices, autonomous systems, or connected infrastructure where a defect in design, coding, or operation causes harm. This includes systems operating with machine learning, artificial intelligence, or automated decision-making, where harm arises from flawed logic, bias, data misuse, or autonomous malfunction. Liability shall be assessed in light of reasonable industry standards and available safeguards at the time of design or deployment.

(h) Exclusions and Disclaimers:

(i) No liability shall arise where:

(ii) The product defect resulted from unauthorised modification or misuse by the claimant or other third party contrary to express instructions; or

(iii) The product was used in an experimental or sandbox environment clearly identified and authorised under the ICT Code; or

(iv) The claimant was aware of and voluntarily accepted the specific risk that caused the harm.

(v) Any exclusion of liability under this Article shall be interpreted narrowly and shall not undermine the reasonable expectations of product safety by ICT residents or users.

(i) Remedies:

Remedies for non-contractual product liability may include:

(i) Compensatory damages for physical injury, property damage, or financial loss;

(ii) Injunctive relief or product recall orders where continued use poses a risk of harm;

(iii) Declaratory relief concerning the safety of the product;

(iv) Costs orders or compliance undertakings.

(j) Interaction with Contractual Remedies:

This Article does not preclude claims based on breach of warranty, contract, or misrepresentation where such claims arise from the same set of facts and are otherwise available under this ICT Code.

(k) Operator and Innovation Exemptions:

Where a product is introduced within a sandbox, regulatory exemption zone, or innovation test environment authorised by the Operator, liability for harm arising from the product shall be limited or excluded where:

(i) The environment was clearly designated, time-limited, and subject to public notice; and

(ii) The claimant was informed or ought reasonably to have known of the experimental nature of the product; and

(iii) The Operator or responsible party acted in good faith and complied with the applicable procedural safeguards.

(l) Compliance with Safety Standards:

Compliance with applicable industry safety standards or Operator or ICT Code-approved standards may be considered as evidence of due care but shall not alone be conclusive proof that the product was not defective or that the defendant discharged their duty of care.

(o) Class Actions and Representative Claims:

Where multiple persons suffer harm from the same defective product, the ICT Court may permit representative claims or consolidated proceedings under the procedures set out in Part 4 of this ICT Code or applicable ICT Court rules.

(m) Interaction with Insurance and Risk-Sharing Mechanisms:

Nothing in this Article precludes the Operator or product providers from implementing approved product liability insurance schemes, indemnity frameworks, or risk-sharing protocols, provided they do not limit the claimant’s rights under this ICT Code unless specifically contractually agreed with the claimant.

(n) Duty to Disclose Risks in Emerging Technologies:

Where a product incorporates novel or evolving technologies (including AI, autonomous systems, biotechnology, or quantum-enabled systems), providers shall disclose:

(i) Any known limitations, learning thresholds, or risks of algorithmic unpredictability;

(ii) Whether and how the system self-updates or self-modifies post-deployment; and

(iii) Whether human override or emergency shutoff is reasonably available in case of system malfunction.

These disclosures shall be clear, accessible, and tailored to the expected user base. Failure to disclose may be treated as a breach of the duty of care or failure to warn.

(o) ICT-Linked Infrastructure and Critical Systems:

Where a defective product causes harm by interfering with ICT infrastructure (e.g. smart energy, transport, health tech), the ICT Court may:

(i) Prioritise rapid mitigation measures over traditional remedies;

(ii) Authorise provisional injunctive relief pending a final hearing; and

(iii) Require coordination with the Operator or emergency protocols set under other Parts of this ICT Code.

(p) Preserving Innovation Incentives:

Nothing in this Article shall be interpreted to:

(i) Prohibit safe experimentation conducted in good faith under Operator-approved frameworks;

(ii) Create liability for residual or unforeseeable harms that fall outside established risk profiles, provided the defendant exercised reasonable foresight and diligence.