The Convention on the Law Applicable to
Products Liability
Hugo Fischer *
INTRODUCTION
The choice of law rule that Canadian Courts apply with respect
to a claim arising from a tort committed abroad has remained static
for about three-quarters of a century.’ Nevertheless, our age is
characterized by an increase in the rapid and convenient movement
of persons, goods and ideas. Increased travel brings with it an
increase in traffic accidents and claims, and the frequency with
which goods are shipped to distant points makes an increase in
claims against foreign suppliers of goods inevitable. Considering
that the present conflict rules for all torts, including claims arising
from traffic accidents and products liability, are based on cases
involving false imprisonment 2 and libel,3 it is not surprising that
attempts have been made to find a connecting factor that would
better fit the circumstances giving rise to such damage claims. The
philosophical basis of tortious liability is now not so much charac-
terized by the connotation of responsibility for criminal or quasi-
criminal acts, but by considerations of an appropriate distribution
of risks among insurers. 4
* Of the British Columbia Bar, Legal Research and Planning Section, Depart-
ment of Justice, Ottawa. This article expresses the author’s private opinions.
I The rule is based on Phillips v. Eyre (1870), L.R. 6 Q.B. (Ex.) and Machado
v. Fontes, [18973 2 Q.B. 231 (C.A.), and has been restated in Dicey and Morris,
Conflict of Laws 8th ed. (1967), 919-920 as follows:
An act done in a foreign country is a tort and actionable as such in
England only if it is both
(a) actionable as a tort, according to English law, or in other words, is
an act which, if done in England, would be a tort; and
(b) not justifiable, according to the law of the foreign country where
it was done.
The Canadian Courts received these cases as law through the Supreme Court
decision in McLean v. Pettigrew, [19453 S.C.R. 62.
2 Phillips v. Eyre, supra, f.n.l.
3 Machado v. Fontes, supra, f.n.1.
4With respect to traffic accidents, Professor Baer states in Conflict of
Laws – Torts – A Blind Search for a “Proper” Law, (1970) 48 Can. Bar Rev.
161, 166 that:
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PRODUCTS LIABILITY CONVENTION
Which law should govern a damage claim? The lex loci delicti
commissi suggests itself as the most appropriate choice. It is also,
in many cases, easily ascertainable (e.g. traffic accident cases). But
even here, and in numerous other cases, the place where the tort
was committed may be fortuitous and thus not commend itself as
the connecting factor. These difficulties have led to the invention
of the “proper law of the tort” theory which requires the applica-
tion of the law of that jurisdiction with which the circumstances
of the case have the closest connection.5
Our tort laws are primarily concerned with compensating accident victims,
and the conflicts that exist in North American tort law centre around
the extent to which victims should be protected at the expense of auto-
mobile owners as a class through liability insurance. Conflicts exist because
some jurisdictions provide more protection than others.
See also the note in (1973) 86 Harv.L.R. 923, 930 on Torts – Products
Liability:
The manufacturer is in a better position to know whether the particular
form of negligence ascribed to the worker is frequent in the use of a
particular machine, to evaluate the costs of such negligence as against
the costs of physically preventing it, and to act on this evaluation.
5 The theory first found judicial favour in a decision of the New York
Court of Appeal, Babcock v. Jackson, 12 N.Y. 2d 473, 191 N.E. 2d 279 (1963).
However, a decade later, the very same court was to reverse the Babcock
ruling in Neumeier v. Kuehner, 31 N.Y. 2d 121, 286 N.E. 2d 454 (1972).
Anglo-Canadian jurisprudence in Boys v. Chaplin, [1969] 2 All E.R. 1085
(H.L.); aff’g [1968] 1 All E.R. 283 (C.A.); aff’g [1967] 2 All E.R. 665 (MilmoJ.)
was presented with a case whose facts were well suited for a development
or a well-reasoned repudiation of this theory but, unfortunately, this oppor-
tunity was missed.
The facts were uncomplicated. The plaintiff and defendant, both normally
resident in England, were serving with the British forces in Malta when,
through the plaintiff’s negligence, the defendant was injured in a motor car
accident. Maltese law, the lex loci delicti commissi, did not permit a compen-
sation for pain and suffering, but English law, the lex fori, did. The trial judge
followed Machado v. Fontes (supra, f.n.1), applied the lex fori, and awarded
the plaintiff full damages including a substantial compensation for pain and
suffering. The Court of Appeal dismissed-the defendant’s appeal. Lord Denning
based his decision on the “proper law of the tort” because both parties were
English servicemen, insured in England by an English company, and because
the defendant had his home in England. Lord Upjohn applied the rule based
on Phillips v. Eyre and Machado v. Fontes (supra, fn.1) and Diplock,CJ. would
have allowed the appeal.
The House of Lords in Chaplin v. Boys, while unanimously dismissing
a further appeal by
their reasoning.
Lord Hodson at page 1094 agreed with Lord Denning’s view and said that
“even though the ocurrence took place in Malta, this was overshadowed by
the identify and circumstances of the parties. British subjects temporarily
serving in Malta”. Lord Guest, like Lord Upjohn before him, applied in effect
the defendant, was divided
in
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It is suggested that the same court may in one case apply the
“proper law of the tort”, particularly if it happens to be the lex
fori, and in another case where, on the principles followed in the
first case, a foreign law should be applied, apply again the lex
fori, but on quite different principles, also ostensibly as the “proper
law”. It matters little how this procedure is supported, whether
by criticizing a defense based on a foreign law as unwarranted; or
by analysing the policies expressed in the lex fori and the foreign
law and inquiring into the circumstances in which it is reasonable
for the respective states to assert an interest in the application of
these policies;0 or again by saying that, in some cases at least, the
the Phillips and Machado rule and so did Lords Donovan and Pearson. Lord
Donovan at page 1097, agreeing on this point with Diplock,CJ.., expressly
repudiated “any such doctrine as ‘the proper law of the tort’ with all its
uncertainties” and said that there was “no need for such a doctrine”. Lord
Wilberforce, in a much milder fashion, also disagreed with the “proper law
of the tort” rule and was thus unwilling to apply Maltese law, but on the
ground that (at page 1104) “nothing suggests that the Maltese State has any
interest in applying this rule to persons resident outside it”. In other words,
there was no real conflict of laws. Thus, out of the five judges in the House
of Lords, a majority of three applied in effect the Phillips and Machado rule;
one, or perhaps two, were in favour, and two definitely against “the proper
law of the tort” rule.
In the Court of Appeal, Diplock,CJ. expressed regret that the Court had
been unable to agree on the relevant conflict rule and added, as if he had
had a forewarning of the ultimate outcome of the case, “Lex propria delicti,
lex fori, lex loci delicti; quot iudices tot sententiae” at page 302 of the report
(an appropriate criticism of the present conflict rules with respect to torts
in England).
The jurisprudence of the United States does not present a more satisfactory
picture.
There have been two Canadian cases following Boys: LaVan v. Danyluk
(1970), 75 W.W.R. 500 (B.C. S.C.) and Gronlund v. Hansen (1969), 68 W.W.R.
329 (B.C. C.A.). Neither answered the question of whether McLean, based on
Machado, following the decision in Boys (a clear repudiation by the House
of Lords of the rule in Machado) was still good law in Canada.
0 “A court attempting to proceed with an interest analysis schema w&ill often
be constrained to indulge in conclusory speculation as to the existence and the
– Ontario guest
nature of state interests”: Finkelstein, Conflict of laws
statute held applicable where Ontario plaintiff sued for loss occasioned by
Ontario accident, (1972) 22 Buffalo L.Rev. 335, 342, a comment on Neumeier
v. Kuehner, 31 N.Y. 2d 121, 286 N.E. 2d 454 (1972). If more than one state
interest or legislative purpose of a rule is “discovered”, the court is faced
with the necessity of attributing primacy of one interest or purpose over
the other, the absence of criteria how this is to be done notwithstanding:
Reese, Chief Judge Fuld and Choice of Law, (1971) 71 Col. Law Review 548, 558.
Also, “it is entirely possible for two identically worded statutes to have been
enacted for different purposes”: op. cit., 559.
1974]
PRODUCTS LIABILITY CONVENTION
court must apply the lex fori because, notwithstanding the presence
of a foreign element, the purported conflict is a false one.
The application of the lex fori based on other than well-defined
rules merely increases the uncertainty of the law in this sphere
and the cost of litigation. It would not appear that the proponents
of the “proper law” theory have sufficiently considered this aspect
of the problem. It has, with much justification, been said that “[i]f
one lesson emerges from the United States decisions, it is that case-
to-case decisions do not add up to a system of justice”7
In view of these uncertainties it may be asked whether it would
not be desirable to have the judiciary relieved from creating ad
hoc choice of law rules by the ingenuity of specialists who, not
being exposed to the impact of litigation, can more easily arrive
at general choice of law rules acceptable to the international com-
munity. Until such rules have been created and accepted, it is, not-
withstanding other disadvantages, safer, less expensive, and in the
long run more equitable, to adhere to the well established and pre-
dictable rules of the common and the civil law regardless of their
classification by their adversaries as “conceptualistic” or “irra-
tional”.
Indeed, the Committee on Private International Law of the
Office of Revision of the Civil Code in Quebec rejected the idea
of formulating specific conflict rules for traffic accidents and
products liability and adopted instead the following general con-
flict rule:
Extracontractual civil liability is governed by the law of the domicile
(habitual residence) of the plaintiff at the time when the act which caused
the damage occurred. However, the defendant may raise a defense based
on the lawfulness of the act which caused the damage and the absence
of an obligation to repair it according to the law of the place where this
act occurred. 8
However, Lord Pearson said in Chaplin v. Boys that “[t]here
ought to be a general rule so as to limit the flexibility and conse-
quent uncertainty of the choice of the substantive law to be
applied”.9
Professor Castel put it this way:
Actually, as a result of technical developments, the courts and the legisla-
ture should realize that it is no longer possible to have only one general
rule of conflict of laws in the field of foreign torts. Traffic accidents,
7 Chaplin v. Boys, supra, f.n.5, 1104 per Lord Wilberforce.
8 Castel and Crdpeau, Views from Canada, (1971) 18 AmJ.Comp.L. 17, 33
writing about the Quebec equivalent of a law reform commission.
9 [1969] 2 All E.R. 1085, 1116.
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products liability, defamation, invasion of privacy and other types of
wrongful conduct require special conflict rules as the issues they raise
are not always of the same nature.’0
And further:
There is no reason why in Canada there could not exist side by side a
general common law rule, which might well be the double actionability
rule, and several specially designed conflict rules to cover traffic accidents,
products liability, defamation and other types of wrongful acts.”
I agree with Professor Reese that “the broad rules (as, e.g., the
place of injury rule in torts) … have been tried and found wanting”
and that “nexw rules… are likely to be narrow in scope and large
in number”. 12 I also agree with Professor Kalensks’, who recognizes
that:
… it would be illusory to expect in the forseeable future the formation
of a substantive private international law which would be a comprehen-
sive system applicable to all cases containing a foreign element …
Reference should, in this connection, also be made to the pre-
amble of the revised draft resolution of the Twenty-sixth Com-
mission of the International Law Institute on tortious liability in
private international law which reads in part as follows:
.13
Estimant… que l’9tendue et les modalitds de la substitution a la loi du
lieu du ddlit d’un autre syst~me juridique doivent faire l’objet d’une 6tude
particuliare pour chaque type de ddlit (accidents de la circulation, acci-
dents du travail, diffamation et violation de la sphere privge par les moyens
de communication, concurrence ddloyale et autres ddlits dconomiques,
ddlits commis en haute mer, dans l’air, dans l’espace, etc.), et que les
limites d’une Rdsolution gdndrale sur la responsabilitg ddlictuelle sont
ainsi ddpassdes …. 14
It was precisely for this latter reason that the Hague Conference
on Private International Law decided to attack piecemeal the vast
problem of conflict rules relating to tortious liability. So far, two
conventions have been concluded, one on the law applicable to
traffic accidents,’ and the other on products liability. We are here
concerned with the latter Convention.
10 Castel, Conflict of Laws – Torts –
Time for a Change, (1971) 49 Can.
Bar Rev. 632, 636.
“Ibid., 637.
‘2 Reese, Dgpagage: A Common Phenomenon in Choice of Law, (1973) 73 Col.
Law Review 58, 59.
13 Kalensky, Trends in Private International Law (1971), 262.
14 See infra, f.n.57.
15 See, e.g., Castel and Crdpeau, International Developments in choice of
law governing torts, (1971) 19 Am.I.Comp.L. 17; Fischer, The Convention on
the law applicable to traffic accidents, (1971) C.Y.I.L. 189- The Conference of
Commissioners on Uniformity of Legislation in Canada unanimously recom-
19741
PRODUCTS LIABILITY CONVENTION
THE CONVENTION
The Convention on the law applicable to products liability is
the result of the deliberations of Commission One of the Twelfth
Session of The Hague Conference on Private International Law.
The Commission met during the period October 2 to 21, 1972.
Canada was one of the 26 participating countries. The final act
of the Twelfth Session, of which the Convention forms Part II,
was signed October 21, 1972.
The forerunner of the Convention on which the conference
participants based their deliberations was a preliminary document
of July 1971 11 prepared by a Special Commission on which Canada
was represented by Professor J.-G. Castel of Osgoode Hall Law
School.
The Convention 17 consists of 22 articles of which the first eleven
might be the subject of implementation by municipal law. The
present study deals, in the main, with these provisions.”8
The object of the Convention is the uniform determination of
the law applicable to the liability of certain suppliers of products
for damage caused by a product. The primary question the Con-
if a
vention aims to resolve may shortly be stated as follows:
product, manufactured in state A, causes damage in state B, under
the laws of which state should the liability of the manufacturer
be determined? From this question there arise other questions,
as for example, the definition of a manufacturer. Is he merely the
person who produces or assembles the merchandise or also the
person who supplies the component parts? Should repairers be
included? Should the growers of agricultural products be included?
As far as the kind of damage is concerned, should the Convention
mended for adoption the uniform Act proposed by Fischer and reprinted
op. cit., at page 214. See 1970 Proceedings of the fifty-second annual meeting,
Charlottetown, P.E.I., 38, 215, 263. So far, it was, with insignificant changes,
enacted only in the Yukon Territory: Conflict of Laws (Traffic Accidents)
Ordinance, O.Y.T. 1962, c.3.
16 Reprinted as appendix to Fischer, Conflict of laws – Products Liability –
Uniformity – Hague Conference, (1972) 50 Can. Bar Rev. 330, 345; and to
DeMent, International products liability: towards a uniform choice of law
rule, (1972) 5 Cornell Int. L.J. 75, 96; and to Saunders, An innovative approach
to international products liability: The work of The Hague Conference on
Private International Law, (1972) 4 Law & Pol. Int’l Bus. 187.
1 7 See infra, Appendix A.
18 A suggested implementing uniform statute is reprinted as Appendix B.
The question of legislative jurisdiction is dealt with in the conclusions of
this paper.
McGILL LAW JOURNAL
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also regulate economic loss? Should the law of more than one
country be applied to the victim’s claim, for example, the question
of liability under one but the amount of damages under another
law? Which, in any event, is the most appropriate law: that of the
place where the product was manufactured, where it was offered
to the public, where it was supplied to the victim, where it was
used or consumed, where the damage occured, where the victim
resides, where the action is brought or that which, in the circum-
stances, is most favourable to the victim? If an answer to these
questions is found, should there be an exception in certain circum-
stances as, for example, where the plaintiff and defendant share a
common domicile or citizenship or where the victim is being treated
or has been treated for his injuries within the jurisdiction where
the product was manufactured? Answers to these questions may
be deduced from the Convention although, it must be stressed, its
provisions are not exhaustive.’ 9
Primary Classification
The statement of the object of the Convention, namely the
uniform determination 2 of the law applicable to the liability of
persons for damage caused by a product, evokes several questions.
In the first place, what is the nature of the liability? Secondly,
whose liability is involved? Thirdly, for what kind of product does
liability arise? And fourthly, what is the nature of the damage to
which liability attaches? The Convention does not tell us what law
to apply when answering these questions. The determination of
10 Saunders, supra, f.n.16, 205 et seq. Similarly, the provisions of the Con-
vention on the Law applicable to Traffic Accidents are not exhaustive: Fischer,
The Convention on the law applicable to traffic accidents, (1971) 9 C.Y.I.L.
189, 197-198.
2o The Convention in art. 1(3) is intended to apply irrespective of the nature
of the proceedings. Cf. s.4 of the Austrian Code of Criminal Procedure (St.P.O.)
dealing with the rights of a partie civile:
4. Unless the adjudication of the private law claims of the victim of a
crime would, because of necessary protraction, make a transfer to the
civil courts appear to be inevitable, these claims are, at the instance of the
victim, to be adjudicated upon as part of the criminal proceedings.
(4. Privatrechtliche Anspriiche aus straftbaren Handlungen sind auf An-
trag des Beschddigten im Strafverfahren mitzuerledigen, wenn nicht die
Notwendigkeit weiterer Ausfiihrung eine Verweisung vor die Zivilgerichte
als unerldsslich erscheinen lasst.)
Cf. Canadian Crim. Code, 1972, ss.388(2), .616, 650(4), 653-655, 663(2)(e), and
742.
1974]
PRODUCTS LIABILITY CONVENTION
this law is thus left to general conflict rules. The questions here
posed are preliminary questions and are thus to be determined
under the lex jorf. No other law is yet involved.2
The question whether the Convention applies at all depends on
the application of four factors.
1. Unlike the Convention on the law applicable to traffic acci-
dents,22 the Convention on products liability is not confined to ques-
tions of tortious liability. The Conference voted against the inclusion
of the words “civil non-contractual liability”,2 probably because, as
one delegate put it, “certain countries neither knew nor cared wheth-
er or not products liability was contractual”,2 or perhaps because,
as another delegate said:
… the typical case of products liability was one in which the plaintiff
would join a retailer as well as the manufacturer of a defective product
as defendants … the plaintiff [has] the choice of suing the retailer in
contract and in tort … one law should be applicable to the plaintiff’s
action in such case… If contractual actions were excluded from the
Convention … the plaintiff might have to prove two foreign laws … P5
And “[w]hether an action for damages is delictual or contractual is
a matter of classification which can only be decided by the court in
the light of its own law”. 06 This is the general conflict rule. However,
the Convention implicitly assigns this question to the lex causae and
thus obviates the uncertainty that would arise if the question of a
contractual exception clause, pleaded in defence to a tort claim, were
to be decided according to the lex fori.
2. The persons whose liability is involved are referred to in
articles 1 and 3 of the Convention. They are:
(1) manufacturers of a finished product or of a component part;
(2) producers of a natural product;
(3) suppliers of a product;
(4) other persons, including repairers and warehousemen, in the
2 1 This should be a sufficient answer to the vicious circle theory. Cf. I.pineo
Examen critique du syst~me de la loi applicable en matigre d’accidents de la
circulation routigre selon la Convention de la Haye de Droit international
priv6, 1968, (1969) 47 Can. Bar Rev. 509, 522.
22 Art. 1: “The present Convention shall determine the law applicable to
23 Procgs-verbal No.11, October 16 1972, item 123.
24 Ibid., item 122 (Mr Rogulien of Norway). See, however, the Carlill case,
civil non-contractual liability arising from traffic accidents…”.
infra, f.nA0.
25 Procs-verbal No.3, October 4 1972, item 81 (Mr Aranne of Israel).
20Kahn-Freund, Delictual Liability and the Conflict of Laws, 124 Recueil
de Cours 1, 130.
McGILL LAW JOURNAL
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commercial chain of preparation or distribution of a
product;2 7 and
(5) the servants and agents of the persons dnumerated under
(1) to (4).28
It does not make any difference whether those enumerated
above are natural persons or corporations. The Convention includes
legal persons (personnes morales) 29 and excludes partnerships.30
The enumeration is exhaustive. 31 However, to a person who
transfers to the victim the property in the product or the right
to use it, the Convention does not apply32 The Convention applies
therefore only where the plaintiff, who will normally be the
victim, acquired the product from the defendant through one or
more third parties. To the suit against his immediate contractant
the Convention does not apply.3 Thus it does not apply to the
relationship between the buyer of a car and the dealer from whom
he bought it.34 It does apply, however, to the relationship between
the buyer and the manufacturer who supplied the dealer. Similar-
ly,
the Convention does not apply to the relationship between
donor and donee or to the parties to a rental agreement, but does
27Article 3, para. 1, nos. 1 to 4.
28Article 3, last paragraph.
2 9 Article 2(c). See also article 8(7).
3o Proc~s-verbal No.12, October 18 1972, items 97 and 103: the formula “the
word ‘person’ shall refer to a legal entity as well as to a natural person”
was rejected. The exclusion of partnerships and limited partnerships (offene
Handelsgesellschaft, Kommanditgesellschaft, Austrian Commercial Code, ss.105
ff. and 165 ff., the latter being the equivalent of the partnership en commandite
referred to in art. 1871 of the Civil Code) was specifically mentioned by Dr
Edlbacher of Austria (ibid., item 98), and Professor Loussouarn stressed that
“le terme ‘legal entity’ ne correspond a absolument rien en frangais” (items
100-102). In any event, a partnership does not appear to be a legal entity:
Re Thorne and N.B. W.C. Board (1962), 33 D.L.R. (2d) 167 (N.B. C.A.).
3 1Proc~s-verbal No.4, Oct. 5 1972, item 69.
32Article 1(2). The Convention is intended to apply to the action of what
has been termed a “remote” consumer or against a “remote” manufacturer:
Turner, The vexing problem of the purely economic loss in products liability:
an injury in search of a remedy, (1972) 4 Seton Hall Law Rev. 145, 154-155.
The Convention is not, however, restricted to actions by consumers or against
manufacturers: see, e.g., infra, f.n.40 and 41 and accompanying text.
38This exception was apparently made so as to avoid any conflict with the
1955 Hague Convention on the Law applicable to the International Sale of
Goods: Saunders, supra, f.n.16, 195.
34 Where the victim acquired the car from an exclusive dealer, the manu-
facturer should not be permitted to argue that the car was acquired ‘directly’
from the manufacturer and that thus the Convention does not apply: Saunders,
vupra, f.n.16, 215-216.
1974″I
PRODUCTS LIABILITY CONVENTION
apply to the relationship between the donee 35 or hirer on the one
hand and the person or persons who supplied those who trans-
ferred the property in, or the right to use, the product. In other
words, the Convention is not intended to apply where there is
privity between the parties.
An example of the producer of a natural product is the bottler
of mineral water.8 6 Article 16(2) permits a contracting state not
to apply the Convention to raw agricultural products. A qualified
objection to the inclusion of these products was made by only one
province, and in view of this there appears to be no reason why
Canada should make use of this right of reservation.
Commission agents and forwarding agents can be classified
as suppliers but also as persons who belong to the commercial
chain of the distribution of the product. Persons who “enrich”
(“ennoblissent”) a product are suppliers.31 Repairmen are in a
special category. The Convention applies to them only if they
form part of the commercial chain of the product,38 and thus, by
implication, excludes other repairmen:
inclusio unius, exclusio
alterius. The Conference expressly dealt with this question.39
The application of the Convention is not necessarily predicated
on the acquisition of a product by the party plaintiff. It applies
where the plaintiff was injured in consequence of the consumption
of a product given to him by the party who acquired it, as happen-
ed in the celebrated case of M’Alister (or Donoghue) v. Stevenson.40
35 Proc~s-verbal No.12, item 109: any reference to “persons giving possession
for value” would exclude manufacturers who sent free samples of products
to potential users. This reference which was included in art. 2(c) of the Draft
Convention (supra, f.n.16) is absent from the document in its final form.
36 Proc~s-verbal No.2, Oct. 3 1972, item 29.
37 Procas-verbal No.5, Oct. 6 1972, items 66 and 67.
38 Article 3(4).
39 Procas-verbal No.5, item 47: “Les D6lgugs se prononcent en faveur de
l’inclusion des rdparateurs dans la mesure o& ils font partie de la chaine
commercial du fabricant”.
40 [1932] A.C. 562 (H.L. Sc.). The action will usually sound in tort or be
for a delict or quasi-delict. The tort, most likely, will be negligence. It may
be fraud where the defendant knowingly and falsely warranted to the pur-
chaser an article to be safe with the intention that the representation be acted
upon by a third party, and the act injured that party: Langridge v. Levy (1837),
2 M. & W. 519; 150 E.R. 863 (sale of defective gun to the plaintiff’s father).
Exceptionally, the action may be for a breach of contract: thus under art. 1029
C.C. one may sometimes infer a warranty against defects to persons who
acquire a product from the warrantee. See also Carlill v. Carbolic Smoke Ball
Co., [1883] 1 Q.B. 256 (CA.), an offer to pay a sum of money to anyone who con-
tracts influenza after having used the defendant’s preparation in a prescribed
McGILL LAW JOURNAL
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It also applies where the injury to the plaintiff was consequential
upon the use of a chattel by the person to whom it was supplied. 1
In cases such as these, the person directly suffering damage would
be the person who suffered bodily injury and not the person who,
for example, suffered damage by losing the services of the injured
person or by being obligated to pay for medical treatment. This
distinction comes into play where the habitual residence of the
victim, or perhaps also where the place of the acquisition of the
product, is the connecting factor under articles 4 and 5 of the
Convention. The residence referred to in article 4 is, in a case
referred to here, that of the person who suffered bodily injury.
As mentioned earlier, where the defendant has transferred the
property in the product, or the right to use it, to the person suffer-
ing damage, the second paragraph of article 1 of the Convention
excludes its application to the liability of these persons inter se.
Under certain circumstances, presently to be mentioned, this ex-
clusion may have to be extended to persons who are not explicitly
referred to in the Convention. Section 2 of the Bills of Lading Act 42
reads as follows:
2. Every consignee of goods named in a bill of lading, and every endorsee
of a bill of lading to whom the property in the goods therein mentioned
passes upon or by reason of such consignment or endorsement, has and
is vested with all such rights of action and is subject to all such liabilities
in respect of such goods as if the contract contained in the bill of lading
had been made with himself.
The question arises whether the application of the Convention
is excluded between the consignor of goods and a consignee or
endorsee mentioned in section 2. Section 2 puts every such con-
signee or endorsee into the position of a person who had directly,
without the interposition of a middleman, acquired the goods from
the transferor or consignor, and it would thus appear that the
Convention should not apply to their liability inter se. This is a
matter of construing an implementing statute in the light of the
Bills of Lading Act, and is best left with the courts.
3. The next question concerns the nature of the product. The
manner. The defendant was held contractually liable to the plaintiff, who,
having done so, nevertheless became an influenza victim. Cf. Austrian Civil
Code, s.860, Auslobung.
41 Cf. Stennett v. Hancock, [1939] 2 All E.R. 578: pedestrian injured because
of a latent defect in the assembly of a motor vehicle component; Bexiga v.
Havir Mfg. Corp., 290 A. 2d 281 (1972): workman injured because of faulty
design of machine.
42R.S.C. 1970, c.B-6.
19741
PRODUCTS LIABILITY CONVENTION
Convention applies to “natural and industrial products, whether
raw or manufactured and whether movable or immovable”.4 3
Under modern conditions, where industrial products are used
in the production and treatment of agricultural products, it would
be unreasonable, and in any event difficult, to distinguish between
damage caused by one product and the other. The Convention,
therefore, applies to both. It does not differentiate between an
untreated product as, for example, mineral water, and an agri-
cultural product on which sprays or fertilizers have been used.
The Conference debated at length whether agricultural products
should be excluded from
the scope of the Convention. .The
difficulty of doing so was seen to lie in the difficulty of describing
when a product had been “treated”. Professor Loussouarn of France
referred to tinned food and asked, “Oih commence et oh finit le
traitement d’un produit? Une mise en boite ou une mise en bouteille
constitue-t-elle ddja un tel traitement?”44 The Conference voted
against the exclusion of agricultural products and natural un-
treated products. 45 Natural gas, electricity and animals, whether
alive or not, are thus products within the meaning of the Conven-
tion, and the classification by the lex fon 6f’ a matter being im-
movable does not take it out of the purview of’ the Convention.
4. What is the nature of the damage to which liability under
the Convention attaches? Damage, as the expression is used in
the Convention, includes injury to the person (doitmage. aux per-
sonnes)4 6 and economic loss suffered in consequence of the defen-
dant’s wrongful act or omission. The Conference voted against a
proposal that would have limited the application of the “Conven-
tion to damage arising from physical injury to a person, including
actions by dependants in case of death, and to damage to property,
thus excluding consequential loss. 47 A word of caution is here
43 Article 2(a).
44 Proc~s-verbal No.2, item 38.
45Ibid., item 49.
46 Art. 2(b).
47Procs-verbal No.3, items 49 and 59. For the extent of consequential
economic loss in English law see, e.g., Owners of Dredger Liesbosch v. Owners
of S.S. Edison, [1933] A.C. 449, 468 (H.L.) per Lord Wright. The owners of
a dredger lost in consequence of the defendants’ negligence were awarded:
(1) the market price of a comparable dredger in substitution; (2) costs of
adaptation, transport, etc., to the place where it was to be used; and (3)
compensation for disturbance and loss in carrying out the dredging contract
between the day of the accident and the day a substituted dredger could
reasonably have been available at the proper place, including items as over-
McGILL LAW JOURNAL
[Vol. 20
perhaps not out of place. The inclusion of economic loss in the de-
finition of damage does not necessarily mean that the plaintiff will,
even if he proves the defendant’s negligence, recover damages for
such loss. The Convention merely determines the law to be applied
to the question whether liability attaches, but that law may deny
liability therefore. Unless the application of that law is excluded be-
cause of the public policy of the forum, damages for economic loss
cannot, in such circumstances, be recovered.4 8
The causes of damage have been classified as follows: faulty
design, defect in the production of a single article, absence d’instruc-
tions, and dangers inherent in scientific and technical development 9
To this there might be added negligence in the bottling or packaging
of an article.5 0 The very important classification, absence d’instruc-
tions, of which Distillers Co. (Biochemicals) Ltd. v. Thompson “‘
and Lambert v. Lastoplex Chemicals Co. Ltd.5 2 are examples, found
its expression in article 1 which includes in its purview “damage in
consequence of a misdescription of the product or of a failure to give
adequate notice of its qualities, its characteristics or its methods of
use”.
There were long discussions on whether damage to a product
should be totally included in the purview of the Convention or totally
excluded, and the delegates, voting against both proposals, agreed
head charges, expenses for staff and equipment; they were not, however,
awarded damages for special loss due to the plaintiff’s impecuniosity. Because
of their lack of money they were unable to buy a dredger that was available
earlier than the one they rented.
48Cf. infra, f.n.93 and 114.
40Von Caemmerer, “Products liability in Germany”, in Ziegel and Foster,
Aspects of Comparative Law: Sales, Consumer Credit and Secured Trans-
actions (1969), 64, 67-68; Ginsberg, Torts – Products Liability, (1972) 4 Seton
Hall Law Rev. 397, 401. For examples of defect in a single article and of
faulty design, see supra, f.n.41.
5O Mathews v, Coca-Cola Co. of Canada, Ltd., [1944] 2 D.L.R. 355 (Ont. CA.);
appeal dismissed, [1944] S.C.R. 385; McIntyre v. Kansas City Coca-Cola Bottling
Co., 85 F.Supp. 708 (1949).
51 [1971] A.C. 458 (P.C. from N.S.W.S.C.): failure by the manufacturer of
a drug containing thalidomide to warn possible purchasers of the harmful
effect on a foetus if the drug were taken by a pregnant woman. This type
of case gave rise to prolonged discussions, mainly with respect to the question
of the place where the tort or tortious breach of contract was committed.
On this, see infra, text to f.n.72. On other thalidomide cases see DeMent,
supra, f.n.16.
52 (1972), 25 D.L.R. (3d) 121 (S.C. from Ont. C.A.): general warning that the
product is inflammable is inadequate where it gives off vapours in such a
degree as to be likely to create a risk of fire from a spark or from a pilot
light in another part of the area where the product is being used.
19741
PRODUCTS LIABILITY CONVENTION
that the Convention should apply to damage caused to the product,
and consequential economic loss, but only if at the same time damage
to another object or injury to a person has been caused. 3 Thus
where a car breaks down because of faulty design or a defect in its
construction and neither personal injury nor property damage is
caused in consequence thereof, the Convention does not apply to a
claim based on the manufacturer’s breach of duty.
The Connecting Factor
Unlike the law at present applicable in all the provinces of Cana-
da, 54 in the Commonwealth, 55 and in at least one of the states of the
Union,56 the Convention does not refer to the lex fori and thus dis-
courages forum shopping. With the implementation of the Con-
vention, the rule of the lex fori as a means of determining the con-
necting factor in interprovincial and international torts would, after
having lasted well over a century,57 come to an end. The lex fori will,
however, still determine public policy,5 8 and, as previously mention-
ed, the primary classification also requires its application.
Articles 4 to 6 of the Convention refer to three connecting fac-
tors5 9 to be selected according to a “‘hierarchy’ of criteria… in
53 Proc~s-verbat No.3, items 24 to 29. Art. 2(b), refers to “damage to the
product itself” if it is “associated with other damage”. This “other damage”
includes, again, injury to the person.
54 McLean v. Pettigrew, [1945] S.C.R. 62; Gagnon v. Lecavalier (1967), 63
D.L.R. (2d) 12 (Ont. H.C.); and LaVan v. Danyluk (1970), 75 W.W.R. 500 (B.C.
S.C.).
55 Boys v. Chaplin, [1967] 2 All E.R. 665 per MilmoJ.; [1968] 1 All E.R. 283
(C.A.); and [1969] 2 All E.R. 1085 (H.L.).
56 Babcock v. Jackson, 12 N.Y. 2d 473 (1963) and Kell v. Henderson, 270 N.Y.S.
2d 552 (1966). “Kell v. Henderson should, as a result of the arbitrary applica-
tion of the lex fori, be considered as a standard or textbook example of ‘forum
shopping”‘: Kahn-Freund, Delictual liability and the conflict of laws, (1968)
124 Recueil de Cours 1, 74.
57 For a general survey of the history of the application of the lex fori, see
the lectures of Professor Kahn-Freund in the Hague Academy of International
Law, supra, f.n.56, 12 et seq. The Twenty-sixth Commission of the International
Law Institute had unanimously rejected the application of the lex fori: Les
obligations ddlictuelles en droit international privg, (Rapporteur: M. Otto
Kahn-Freund), (1969) 53 Annuaire de l’Institut de droit international 180, 194:
“M. Lalive … declare dtre favorable au principe de l’unitg de la loi applicable,
unitg qui doit 6tre maintenue autant que possible.”
58 See infra, text to f.n.114 et seq.
59 The provisions concerning the connecting factor are based on Document
de travail No.36 of Denmark, the United States, France, Norway and the
Netherlands: Procs-verbal No.8, October 10 1972, item 33.
McGILL LAW JOURNAL
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more or less ‘descending’ order”, 0 namely the habitual residence of
the person directly suffering damage (here shortly referred to as the
victim’s residence), the place of the injury or damage (le territoire
duquel le fait dommageable s’est produit), and the principal place of
business of the person claimed to be liable (here shortly referred
to as the defendant’s business). In each case the reference is to the
internal law thus excluding renvoi and Weiterverweisung.
The rigidity of the reference to the three connecting factors
is mitigated by the right of the victim to choose as a connecting fac-
tor the place of the injury in preference to the principal place of
business of the person claimed to be liable and by the right of the
latter to choose this connecting factor.
The Convention gives the defendant in article 7 the right to
exclude as connecting factors the victim’s residence and the place
of the injury or damage. This is done by establishing that he could
not have foreseen 0 1 that the product or his own products of the
same type would be made available through commercial channels
within the jurisdiction where the victim’s residence or the place of
the injury or damage, as the case may be, are situated. Exclusion
of the law of a state where the supplier could not have foreseen that
his product would reach the particular market is justified when one
considers the difficulty of obtaining insurance against a risk of an
occurrence that gives rise to a damage claim under a law unforesee-
able by the supplier. Professor Ehrenzweig observes that:
… the supplier’s broadening liability to both his buyer and third parties
is both bearable and needed primarily because it serves the distribution
of objectively, and usually subjectively, unavoidable loss and is, therefore,
calculable in the process of pricing and insuring.0 2
And further:
The average consumer cannot realistically be expected to carry the accident
or health insurance he needs even under the products liability laws of
his home state. On the other hand, insurance for liabilities incurred under
the consumer’s law can reasonably be carried by the manufacturer who
expects distribution of his product in the consumer’s state.63
The Convention designates in article 5 the victim’s habitual resi-
dence as the connecting factor if at least one of two requirements is
fulfilled and the defendant has not, or could not, have the right given
00 DeMent, supra, f.n.16, 88.
01 The delegates voted against the exclusion of foreseeability: Procas-verbal
No.8, 1972, item 33, in fine.
2 Ehrenzweig, Products Liability in the Conflict of Laws – Toward a Theory
of Enterprise Liability under ‘Foreseeable and Insurable Laws’: II, (1960) 69
Yale L.J. 794, 799.
63 Ibid., 801.
1974]
PRODUCTS LIABILITY CONVENTION
to him by article 7. One of the requirements is that the victim’s
residence and the defendant’s business are situated within the same
jurisdiction and the other is that the victim’s residence and the place
where he acquired the product are so situated.
Where the product is sent by mail, it could be argued, in accord-
ance with the common law, that the plaintiff acquires it at the point
of mailing. If this argument is accepted, a distinction would be
created between two plaintiffs habitually residing within the same
jurisdiction if the product is sent to one by mail from without the
jurisdiction and the other obtains it at a local outlet or acquires it
by constitutum possessorium. It would be difficult to justify such
a distinction. In either case the reference to the place of acquisition
should be read as a reference to the place where the plaintiff obtains
physical control over the product.
The place of the injury is the connecting factor if either, under
article 6, the plaintiff is permitted to choose it or if, under article 4,
at least one of three requirements is fulfilled and, in any event, the
defendant’s right under article 7 is not exercised. One requirement is
that the place of the injury and the victim’s residence are situated
within the same jurisdiction, another that the place of injury and the
defendant’s business are also situated in the same jurisdiction, and
the third that the place of injury and the place where the product
is acquired by the person directly suffering damage are so situated.
Where neither the victim’s residence nor the place of the injury
constitute, under the Convention, the connecting factor, article 6
designates as such the defendant’s principal place of business.
From the foregoing.it follows that the Convention refers to the
internal laws of three jurisdictions. A fourth is introducted by article
9 ” notwithstanding that, as one delegate put it, “[o]n sombre alors
dans une complexitg extreme”. 5 Article 9 is permissive. It allows the
court to apply the rules of conduct and safety (les r~gles de sdcurit6)
prevailing in the jurisdiction where the product was introduced into
the market. This clause was adopted by a minority vote of nine in
favour, seven against and four abstentions.0 6 Although the Canadian
delegation voted against the adoption of the clause, Canada will not,
in view of article 16 of the Convention, be permitted to reserve the
right not to apply the clause. Examples of the rules of conduct and
safety would be the regulations authorized by the Explosives Act,67
United Kingdom delegation.
64 This article is based on the first alternative of Doc. tray. No.43 of the
65 Proc~s-verbal No.9, October 11 1972, item 33 (M. Bellet of France).
66 Ibid., item 34.
67R.S.C. 1970, c.E-15, s.4.
McGILL LAW JOURNAL
[Vol. 20
the prohibitions contained in the Act,68 those contained in the Pest
Control Products Act,,9 or in the Plant Quarantine Act.7″
The Convention on the law applicable to traffic accidents permits
a direct action against the person liable if such action is authorized
either by the law governing the insurance policy or by any other law
that applies under that Convention. The Conference voted against
considering direct actions against insurance companies. 71
From the discussions at the Conference it appears that the dele-
gates were fully aware of the difficulty in the classification of the
place of injury as one of the connecting factors. Four alternatives
were canvassed. The first was the place where the act that gave rise
to the injury or damage was done or, where the action is based on
an omission, the place where the act should have been done. The
second alternative was the place of the first impact, the third where
it made itself felt for the first time, and the fourth where the injury
or damage was finally suffered to its full extent. The first and last
alternatives were discarded, and the editors were advised to phrase
the clause so that a judge could choose between the place “du pre-
mier impact dommageable” and the place “de la premiere manifes-
tation du prdjudice”.72 The Convention speaks, in articles 4 and 6,
(8 See, e.g., s.5:
5.
(1) Except as provided by the regulations, no person shall have in his
possession, import, store, use, make or manufacture, whether wholly or in
part, sell or offer for sale, any explosive that is not an authorized explosive.
(2) Subject to any exemption made by regulation,
(a) no person shall make or manufacture explosives either wholly
or in part except in a licensed factory;
(b) no person shall sell any explosive designated by the Governor
in Council for the purpose of this section unless he is the owner
or occupant of a licensed factory, licensed magazine or registered
premises; and
(c) no person shall carry on, except in a licensed factory, any of
the following processes, namely:
(i) of dividing into its component parts, or otherwise breaking
up or unmaking, any explosive,
(ii) of making fit for use any damaged explosive, or
(iii) of remaking, altering or repairing any explosive.
(3) Paragraph (2) (c) does not apply to the process of thawing explosives
containing nitroglycerine, if a proper apparatus or thawing-house is used in
accordance with regulations or any provincial law.
(4) No person shall store any explosive in a magazine that is not a
licensed magazine.
09R.S.C. 1970, c.P-10, s.4.
70R.S.C. 1970, c.P-13, para. 4(a) and (f) and s.10.
71 Proc~s.verbal No.10, October 13 1972, item 64.
72 Proc~s-verbal No.10, items 82 – 90. Article 10 of the draft Convention on
the law applicable to contractual and non-contractual obligations prepared in
19741
PRODUCTS LIABILITY CONVENTION
merely of “the State of the place of the injury (le territoire duquel le
fait dommageable s’est produit)”. As far as the common law relating
to the tort of negligence is concerned, this wording, if adopted by
the domestic law, would probably not correspond to the intention
the Conference wished to express.
At common law, at least as applied in the courts of Ontario and
Nova Scotia for the purpose of granting service out of the jurisdic-
tion, a tort is committed within the jurisdiction only if the breach
of duty occurred within the jurisdiction
In Beck v. Willard Choco-
late Co., Ltd74 the plaintiff was injured by a piece of jagged cop-
perplate concealed in a chocolate bar. The bar was manufactured
outside the jurisdiction but the injury was suffered within the ju-
risdiction. A motion for service of the writ outside the jurisdiction
was denied on the ground that the action was “for tort committed
or wrong done within the jurisdiction”, the court holding that “the
1972 for the member states of the European Economic Council and reported
in (1973) 62 Revue critique de droit international priv6 211 states:
Les obligations non contractuelles ddrivant d’un fait dommageable sont
rdgies par la loi du pays oht ce fait s’est produit.
Toutefois, lorsque, d’une part, il n’existe pas de lien significatif entre
la situation rdsultant du fait dommageable et le pays oh s’est produit ce
fait et que, d’autre part, cette situation pr6sente une connexion prgpondd-
rante avec un autre pays, il fait application de la loi de ce pays.
Cette connexion doit se fonder normalement sur un ildment de rat-
tachement commun a la victime et a l’auteur du dommage et, si la respon-
sabilitg d’un tiers pour l’auteur est mise en cause, commun & la victime
et & ce tiers.
En cas de pluralitg de victimes la loi applicable est ddterminge sgparg-
ment & l’6gard de chacune d’entre elles.
73 Service out of the jurisdiction was, however, allowed in Moran v. Pyle
National (Canada) Ltd. (1972), 25 D.L.R. (3d) 718 (Sask. Q.B.). The claim was
based on negligence, and while conceding at pages 726-727 that plaintiffs are
free to sue a negligent defendant in his home jurisdiction where the tort
was committed, the court at page 727 came to the conclusion that, if this
were insisted on, plaintiffs with modest financial means would in effect be
denied justice. In the Distillers case, supra, f.n.51, service out of the jurisdic-
tion was granted. The decision was upheld by the Privy Council. The defendant,
an English company, was held to have committed a tort in failing to give
warning of the danger of the product within New South Wales where the
product was purchased and where the damage was suffered. Obiter it was
denied by Lord Pearson on page 467 that it could be held that the tort was
committed where the last ingredient of the cause of action was completed.
In this particular instance, the breach of duty and the harm it produced
happened in the same place. It does not appear to be satisfactory to say
that “the tort should… be regarded as having been committed in the country
with which it is most closely connected”, a suggestion made by Scott, The
place of the tort, (1971) New Law Journal 693, 695.
74 [1924] 2 D.L.R. 1140 (N.S. S.C.).
McGILL LAW JOURNAL
[Vol. 20
wrong done … contemplates a tortious act or omission as dis-
tinguished from its consequences”.7 5
Paul v. Chandler & Fisher Ltd.70 was an action for damages
brought by the widow of a patient in an Ontario hospital. The
patient’s death had been caused by the use of catgut manufactured
by the defendant company in Manitoba. The catgut brought on tet-
anus from which the plaintiff’s husband died. Service of the writ
out of the jurisdiction was refused on the ground that “[i]f the
defendants were guilty of negligence, whether in the manufacture
of a dangerous article or in the sale of it, the negligent act which
constituted the tort was wholly within Manitoba.” 7 In the more
recent case of Abbott-Smith v. Governors of University of Toronto 7
the court reached a similar decision. The plaintiff claimed that the
defendant manufactured an antipolio vaccine outside the jurisdiction
but did so negligently and that the plaintiff, having been inoculated
within the jurisdiction, suffered damage in consequence of this neg-
ligence. The court, while admitting that “the tort of negligence is
not committed until the damage is sustained”, 79 nevertheless came
to the conclusion that:
… it smacks of artificiality or technicality to consider that where an
intended defendant is not alleged to have done anything within the juris-
diction, the fact that what he did outside the jurisdiction should be
regarded as the commission of a tort or the doing of a wrong within the
jurisdiction.80
On the other hand, where the tort consisted in the transmission
of defamatory statements or of music in breach of copyright from
without the jurisdiction but received within the jurisdiction, the
courts have held that the tort was committed within the jurisdic-
tion.8′ Professor J.-G. Castel has criticized the case law that estab-
71 Ibid., 1143 per MellishT.
70 [1924] 2 D.L.R. 479 (Ont. S.C.).
77 Ibid., 482 per Orde,f.
78 (1964), 45 D.L.R. (2d) 672 (N.S. S.C.).
70 Ibid., 680 per IlsleyC.S.
80 Ibid., 687 per Ilsley,C.J.
81 Cf. Jenner v. Sun Oil Co., Ltd., [1952] 2 D.L.R. 526 (Ont. H.C.), where
defamation broadcast from a radio station in the United States was received
in Ontario. Composers, Authors and Publishers Association of Canada Ltd. v.
International Good Music, Inc. (1963), 37 D.L.R. (2d) 1 (S.C. from Ex. Ct):
plaintiff’s copyright infringed by, a television transmission from the United
States but received in Canada. Original Blouse Co. Ltd. v. Bruck Mills Ltd.
(1963), 42 D.L.R. (2d) 174 (B.C. S.C.): intentionally false representations about
the defendant’s goods made in a letter mailed in Montreal but received in
Vancouver, the plaintiff acting on these representations and suffering damage
in Vancouver.
19741
PRODUCTS LIABILITY CONVENTION
lished the place of the obnoxious act done, instead of the place of the
injury suffered, as the locus delicti commissi.8
It is not clear whether Canadian courts will equate “the place of
the injury” (the expression used in the Convention) with a “wrong
done within” a certain jurisdiction 8 (the expression used in the
Rules of Practice relating to service out of the jurisdiction). Assum-
ing that this possibility cannot be excluded, the adoption of the Con-
vention as part of our internal law by merely repeating its wording,
that is by referring to “the place of the injury”, would frustrate the
intentions of the framers of the Convention and could expose Cana-
da, upon its ratification, to the charge of having committed an inter-
national tort. The framers of the Convention expected the place of
the injury, and not the place of the breach of the duty, to be consid-
ered the locus delicti commissi. However, if the ratio of Beck, Paul
and Abbott-Smith 8 were applied, “the place of the injury” would be
the place where the breach of duty occurred. It would not at all be
helpful to expect a Canadian court to interpret implementing legis-
lation with reference to rules by which international conventions
are being interpreted in international law. If this were done, the
court would consult the travaux prdparatoires and find that the
framers of the Convention intended the place of the injury to be the
place where the breach of duty first took effect.”5 Unfortunately,
however, where implementing legislation is concerned, these rules
have no application. If authority for this proposition were required,
I would refer to R. v. Sikyea, 8 where counsel failed to persuade the
court to apply these rules to the Migratory Birds Convention, a treaty
concluded between the United Kingdom, on behalf of Canada, and
the United States. The Convention, reproduced in the Schedule to
the Migratory Birds Convention Act, 7 was, by section 2 of the Act,
“sanctioned, ratified and confirmed”. The court refused to interpret
the Convention with reference to international law rules and held
as follows:
We were invited by counsel for the respondent to apply to the Migratory
Birds Convention those rules which have been laid down for the inter-
pretation of treaties in international law and we have been referred to
many authorities on how these treaties should be interpreted. We are not,
82 Canadian private international law rules in the field of civil responsibility,
(1958) 18 R. du B. 465.
83 See supra, f.n.72.
84 Supra, f.n.74, 76 and 78.
85 Supra, text to f.n.72.
86 (1964) 43 D.L.R. (2d) 150 (N.W.T. C.A.).
87Now R.S.C. 1970, c.M-12.
McGILL LAW JOURNAL
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however, concerned with interpreting the Convention but only the legisla-
tion by which it is implemented. To that statute the ordinary rules of
interpretation are applicable and the authorities referred to have no
application.88
From this it follows that a statute implementing the Convention
on Products Liability would have to define the place of injury as the
place where the injury was suffered or the damage was sustained
and could not, by omitting this definition, leave it to the courts to
glean this definition from the preparatory material.
The connecting factor designates which jurisdiction’s laws are to
be applied under the Convention. Most of these laws will be provin-
cial laws. There is, however, a possibility that some may be federal.
The Railway Act, 9 for instance, imposes civil liability, in addition to
criminal liability, for any breach of duty imposed by the Act or reg-
ulations supplementing
it. Section 336, for example, reads as
follows:
336. Any company that, or any person who, being a director or officer
thereof, or a receiver, trustee, lessee, agent, or otherwise acting for or
employed by such company, does, causes or permits to be done, any
matter, act or thing contrary to this or the Special Act, or to the orders,
regulations or directions of the Governor in Council, or of the Minister,
or of the Commission, made under this Act, or omits to do any matter,
act or thing, thereby required to be done on the part of any such company,
or person, is, in addition to being liable to any penalty elsewhere provided,
liable to any person injured by any such act or omission for the full
amount of damages sustained thereby, and such damages are not subject
to any special limitation except as expressly provided for by this or any
other Act.
The Railway Act also
the
limitation of actions. 0 Article 12 of the Convention provides that
where, as is the case in Canada:
indicates certain defences and
… a State comprises several territorial units each of which has its own
rules of law in respect of products liability, each territorial unit shall be
considered as a State for the purposes of selecting the applicable law
under this Convention.
If the Convention is to be applied within Canada, an umpiemenL-
ing statute should make it clear beyond doubt that the laws ot a
province comprise not only provincial laws properly so called but
all laws in force in the province, Acts of Parliament included.
8 8Supra, f.n.86, 162 per SohnsonT.A.
89R.S.C. 1970, c.R-2.
00 Ss. 341 and 342.
1974]
PRODUCTS LIABILITY CONVENTION
Intertemporal Conflicts of Laws –
The Convention does not regulate intertemporal conflicts of laws,
but it is felt that on a proper determination of the connecting factor
few, if any, such conflicts will arise.
From what was said with respect to the classification of the con-
necting factor, the point in time to which reference should be made
where, under article 4 or 6 of the Convention, the place of the injury
is the connecting factor, is the day on which there occurred the
“premier impact dommageable” or “la premiare manifestation du
prgjudice”.9 1
Article 5 refers to the habitual residence of the person who
directly suffered damage, and it would thus appear that, where the
connecting factor is determined under this article, the same point
in time should be referred to as under article 4. It is submitted that
it would not be appropriate to refer to the day of the breach of duty
which gave rise to the action because on that day no person may
have suffered damage.
While, under article 5, the principal place of business should,
in my submission, be determined as it existed on the day the delete-
rious effepts made themselves first felt, it is also submitted that
where, under article 6, the principal place of the defendant’s business
is the connecting factor, this should be determined with reference
to the day the product left the defendant’s plant, or, if the defendant
retained control over the product beyond that day, with reference
to the day the control ceased. The same day, it is further submitted,
should be the reference point under article 7 which gives the defend-
ant the option to have the law of the state of the principal place
of his business applied when he could not reasonably have foreseen
that the product (or products of the same type) would be made
available in that state through commercial channels. If between the
day the product left the defendant’s control and the day the damage
occurred he moved to a jurisdiction the laws of which are adverse to
him, it would not be just to apply these more severe laws because
at the time of dispatch he could not have foreseen the application of
these laws and should not, therefore, be expected to govern himself
in accordance with them or be held liable under them.
Secondary Classification
When the applicable law has been found by the determination of
the connecting factor and, if necessary, its classification, the question
of the extent of its application arises.
91 Supra, f.n.72 and accompanying text.
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Article 8 introduces the nine points to which the law determined
under the Convention is to be applied with the words “[tihe law
applicable under this Convention shall determine, in particular….,
thus permitting the court to apply it to other questions not enumer-
ated in the article. The nine points are as follows:
1. the basis and extent of liability;
2. the grounds for exemption from liability, any limitation of liability
and any division of liability;
3. the kinds of damage for which compensation may be due;
4. the form of compensation and its extent;
5. the question whether a right to damages may be assigned or inherited;
6. the persons who may claim damages in their own right;
7. the liability of a principal for the acts of his agent or of an employer
for the acts of his employee;
8. the burden of proof insofar as the rules of the applicable law in respect
thereof pertain to the law of liability;
9. rules of prescription and limitation, including rules relating to the
commencement of a period of prescription or limitation, and the inter-
ruption and suspension of this period.
Points 1, 2, 5, 7 and 9 (and points 4 and 6 in the French version)
are identical with points 1, 2, and 4 to 8 of article 8 of the Convention
on the law applicable to traffic accidents.2
Although the Convention includes damage to property and eco-
nomic loss in the definition of “damage”, recovery of some of these
items may be precluded where, under point 1 of article 8, the basis of
liability is to be decided under a law that does not permit recovery
for these items. This may happen under a law that applies the (now
reversed) ruling of the British Columbia Court of Appeal in Rivtow
Marine Ltd. v. Washington Iron Works and Walkem Machinery &
Equipment Ltd. where it was held that:
… neither a manufacturer of a potentially dangerous or defective article
nor other person who is within the proximity of relationship contemplated
in M’Alister (Donoghue) v. Stevenson, [1932] A.C. 562, is liable in tort, as
distinct from contract, to an ultimate consumer or user for damage
arising in the article itself, or for economic loss resulting from defect
in the article, but only for personal injury and damage to other property
caused by the article or its use. 93
92 Reprinted in Fischer, supra, f.n.19, 209.
93 [19721 3 W.W.R. 735, 759 (B.C. C.A.) per TysoeJ.A. For a criticism of this
case see Newbury, Note, (1972) 7 U.B.C. L.Rev. 303. On August 27, 1973
the Supreme Court of Canada, in a judgment not yet reported, set aside the
judgment of the B.C. Court of Appeal and restored the judgment of the trial
judge. The court was unanimous in allowing recovery for economic loss which
was not consequent upon physical injury.
For a jurisdiction which still applies the law as stated in the decision of
the British Columbia Court of Appeal see Spartan Steel & Alloys Ltd. v. Martin
& Co. (Contractors) Ltd., [1972] 3 All E.R. 557 (CA.).
1974]
PRODUCTS LIABILITY CONVENTION
The extent of liability to which point 1 refers “was designed to
deal with statutes limiting the maximum amount of damages recov-
erable under certain laws”.94 The application of the lex causae may,
however, be avoided on the grounds of public policy 5
A good example of the application of point 2 is the LaVan case.Y0
Point 3 is almost identical with the corresponding provision in the
Traffic Accident Convention but deletes the words “l’existence”
from the phrase “l’existence et la nature des dommages susceptibles
de reparation”. The English text is only slightly different. No material
change is involved, because the sense of the omitted words is in-
cluded in point 1. Point 3 covers such questions as whether one may
recover only special or also general damages and to what extent, for
example, damnum emergens and lucrum cessans.
An example of a kind of damage for which no compensation is
awarded is the suffering of a decedent’s family in consequence of
his death. With respect to this, the solatium doloris, it was held that
“[i]l est bien 6tabli en jurisprudence que ces dommages ne peuvent
faire l’objet d’une poursuite judiciaire”Y
As far as the quantum of damages mentioned in point 4 is con-
cerned, the British delegate, probably mindful of Boys v. Chaplin,98
would have preferred it if this item had been left to be determined
by the lex fori, but he withdrew his objectionP9
The question whether a right to damages may be inherited,
mentioned in point 5, is, at common law and in the civil law, regu-
lated by the law of the decedent’s personal law at the time of his
death. The substitution of the lex causae for the loi successorale is
therefore an innovation. The lex causae governs also the question of
assignability, although this may, as Professor Kahn-Freund points
out, amount in certain cases to “mechanical jurisprudence”.00
94 Procs-verbal No.9, item 45. This would, for example, refer to the limita-
tion in Swiss law of the liability of an impecunious defendant. See also in
the
Kilberg v. Northeast Airlines, Inc., 172 N.E. 2d 526 (1961)
reference to a Massachusetts statute limiting damages against common car-
riers for negligently causing a passenger’s death to not less than $2,000 or
more than $15,000. On this case see f.n.114 and 115, and accompanying text.
(N.Y. C.A.)
95 Cf. f.n.114 et seq.
96 (1967), 63 D.L.R. (2d)
(Ont. H.C.). See also the Bexiga case, f.n.41.
Normally the injured workman would have been held contributorily negligent,
but the injury was of the very kind that called for the installation of a safety
device.
9 7 Surprenant (Dame) v. Air Canada, [1973] CA. 107, 111 per TremblayCJ.
98 Supra, f.n.55.
99 Procks-verbal No.9, items 44 and 54.
100 Cf. supra, fn.56, 118.
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Point 6 aims at deciding who, apart from the person directly suf-
fering damage, may claim damages as, for example, an employer for
the loss of his employee’s services. M
As far as point 7 is concerned, it is interesting to note that a
separate vote was taken in favour of phrasing it in the same way
as the corresponding provision in the Convention on the law appli-
cable to traffic accidents. 1 2 The rendering of “commettant du fait”
and “prdposd” as “principal and agent” and “employer and em-
ployee” was necessitated by the fact that the civilian “commettant du
fait” corresponds to “principal” as well as to “employer” and
“master”, and “prdposg” to “agent” as well as to “employee” and
“servant” at common law.
A modem example of the application (or rather the non-applica-
tion) of the maxim respondeat superior is the recent House of Lords
decision in Morgans v. Launchbury. Lord Wilberforce explained the
conditions for the application of the maxim in these words:
… respondeat superior is the law saying that the owner ought to pay…
The owner ought to pay … because he has authorized the act, or requested
it, or because the actor is carrying out a task or duty delegated, or because
he is in control of the actor’s conduct. He ought not to pay… if he has
no control over the actor, has not authorized or requested the act, or if
the actor is acting wholly for his own purposes. 103
The inclusion of the burden of proof as point 8 was modified by
the words “insofar as the rules of the applicable law in respect
thereof pertain to the law of liability”. This clause, added as a com-
promise, was the outcome of a debate initiated by the Danish
delegation. Professor Loussouarn, after having declared unaccept-
able a solution that would permit the question of the burden of proof
to be decided by the lex fori in case the applicable law was devoid
of special rules concerning that burden,1 4 merely abstained when
the vote on this point was taken. 0 5 An example of the burden -of
proof insofar as the rules of the applicable law in respect thereof
pertain to the law of liability is the application of the maxim res ipsa
loquitur.10
101 In Nykorak v. A.-G. of Canada, [1962] S.C.R. 331; 33 D.L.R. (2d) 373, it
was held that the Crown has a right of action per quod servitium amisit for
expenses incurred as a result of the negligent injury of a member of the
armed forces regardless of his rank.
102 Procas-verbal No.9, item 61.
103 [1973] A.C. 127, 135 (H.L.).
104 Ibid., item 65.
105 Ibid., item 77.
106 See, e.g., Jackson v. Millar (1973), 1 O.R. 399 (C.A.).
19741
PRODUCTS LIABILITY CONVENTION
The importance of the modification of the applicability of the
lex causae to the burden of proof by the addition of the words
“insofar as the rules of the applicable law in respect thereof pertain
to the law of liability” will be better appreciated by reference to a
short example. Let us suppose that under the lex fori that law will
be applied where no other is proven,”‘0 and the statute implementing
the Convention points to the laws of state X which are less advan-
tageous to the plaintiff than the lex fori, and the laws of state X
require the plaintiff to provide, as one of the elements of his case,
proof of the law to be applied.1 8 In these circumstances, it will be
107 Key v. Key, [1930] 3 D.L.R. 327 (Ont. CA.), whose headnote reads as
follows: “[t]he general law of a foreign state is presumed to be the same as
that of the domestic jurisdiction, and the onus of proving that it is different
is upon those who so contend.” In this case the court applied Ontario law
as the forum law because the foreign (New York) law, while pleaded, was
not proven. With respect to the law of a sister province, the Supreme Court
used to take judicial- notice thereof: Logan v. Lee (1908), 39 S.C.R. 311, but
this is no longer the -case. Where the law of another province is relied on
without having been pleaded, “it would be unfair for … [the Supreme] Court
to take suo motu judiciary notice of the statutory or other laws of another
province, ignored in the pleadings, when the Quebec courts [i.e. the trial and
intermediate appeal courts] did not consider them, and, forsooth, were pro-
hibited from considering them as applying to the case”: Canadian National
Steamships Company Ltd. v. Watson, [1939] S.C.R. 11, 18 per Cannon,J. This
decision can hardly be called an “absurdity”. Cf. Wengler, Der Mythos von
der lex fori, (1969) fus privatum gentium 299, 315:
In a state with a plurality of jurisdictions the mere existence of a com-
mon appellate court, not limited to the application of one local law, makes
evident the absurdity of a rule that would, where the application of an-
other local law of the same state cannot be proved, compel the appellate
court to apply as subsidiary law the lex fori of the lower court from whose
judgment the appeal happens to have been brought.
(Im Mehrrechtsstqat ldsst allein schon die Existenz eines nicht auf
die Anwendung eines einzelnen Teilrechtes beschrdnkten Obergerichts die
Absurditat einer Regelung evident werden, wonach das Obergericht als
subsidiares Recht die lex fori des jeweiligen untergerichts anzuwenden
hatte, sofern nicht die Anwendbarkeit eines anderen inldndischen Teil-
rechts erwiesen werden kann.)
For the position in the United States see Schlesinger, A Recurrent
Problem in Transnational Litigation: The Effect of Failure to invoke or
prove the Applicable Foreign Law, (1973) 59 Cornell L.R. 1.
108 Walton v. Arabian American Oil Co., 233 F. 2d 541 (C.C.A. 2d, 1956). Pro-
fessor Schwind, in the draft of a P.I.L. statute for Austria, (1971) 12 ZfRV
161, 164, would require the court to ascertain the foreign law ex officio:
3. Ascertaining the foreign law
(1) The court shall acquire knowledge of the foreign law ex officio.
(2) In so doing, the court is not restricted by the evidence supplied by
the parties; it has to institute, ex officio, all inquiries it deems
McGILL LAW JOURNAL
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incumbent upon the defendant to show that “the rules of the appli-
cable law… [that] pertain to the law of liability” are more advan-
tageous to him. If the defendant fails to provide this proof, the case
will be decided under the lex fori, and the defendant cannot expect
the dismissal of the claim on the ground that, under the applicable
law, the plaintiff had to prove it but failed to do so.
The debate on whether rules of prescription and limitation should
be decided under the lex fori because they are procedural, or under
the lex causae because they are substantive, led to a compromise.
Matters of prescription and limitation are, under point 9 of article
8, to be decided under the lex causae, but, under point 1 of article 16,
any state may reserve the right not to apply this provision. As far
as Canada is concerned, Professor Crdpeau explained that:
… en Common law canadien on distingue la prescription et la ddchdance,
l’une touchant & la procddure, l’autre au fond. En droit civil canadien
on distingue dgalement la prescription et la dbchance mais, dans les deux
cas, sur le plan de la qualification, il s’agirait d’une question de fond. 0 9
Allard v. Charbonneau 1 l may serve as an example for the classi-
fication at common law of a limitation rule as procedural and Catel-
tier v. Bdlanger ‘ for the classification, according to the civil law,
as substantive. In the Allard case the Ontario Court of Appeal allow-
ed an appeal from a judgment for damages. The accident had occur-
red in Quebec, and under Quebec law the limitation period was two
necessary and may use the co-operation of the parties, the evidence
of experts and, where necessary, the assistance of administrative
officials of this country [Austria].
(3) Where the law to be applied cannot at all be ascertained, the most
nearly related law is to be applied, and if it cannot be ascertained.
the domestic law [of Austria].
(3. Ermittlung fremden Rechts
(1) Das Gericht hat sich die Kenntnis fremden Rechts von Amts wvegen
zu verschaffen.
(2) Bei dessen Ermittlung ist das Gericht auf die von den Parteien ange-
botenen Beweise nicht beschrdnkt; es hat alle ihm n6tig scheinenden
Erhebungen von Amts wegen einzuleiten und kann sich der Mit-
wirkung der Parteien bedienen, Sachverstdndige zuziehen und, soweit
erforderlich, die Hilfe der inliindischen Verwaltungsbeh6rden in
Anspruch nehmen.
(3) Sind die anzuwendenden Rechtsnormen iiberhaupt nicht feststellbar,
so sind die einschldgigen ndchstverwandten anzuwenden; sind solche
nicht zu ermitteln, das inldndische Recht.)
On United States federal law in this respect, see Saunders, supra, f.n.16, 217.
109 Eleventh Session, Commission No. II, P.V. No. 9, corr. 4, Oct. 19 1968.
110 [1953] 2 D.L.R. 442 (Ont. C.A.).
111 [1924] S.C.R. 436 (from Que.).
1974]
PRODUCTS LIABILITY CONVENTION
years. In Ontario, however, it was one year, and the action was
brought more than one year but less than two years after the date
of the accident. The court applied the lex fori to the question of limi-
tation and dismissed the action. In the Catellier case Mignault,S.
said with respect to prescription that:
… cette prescription est une vritable d~chgance et la loi ddniant l’action,
les tribunaux peuvent, et j’ajoute doivent, supplier d’office le moyen rdsu-
tant de la prescription.”i 2
The Convention on the law applicable to traffic accidents does
not permit a state to reserve the right not to apply the provision
relating to prescription and limitation, and the Conference of Com-
missioners on Uniformity of Legislation in Canada had no reservation
regarding the inclusion of this provision into a uniform act.” 3 There
should not, therefore, arise any difficulty in accepting this provision
as far as the Convention under review is concerned.
Public Policy
Article 10 of the Convention authorizes a court to refuse the
application of the lex causae “where such application would be
manifestly incompatible with public policy (‘ordre public’)”. This
principle has been applied where the lex causae limited the defend-
ant’s liability and where the place of injury that determined the
application of that law was considered to be fortuitous. Thus in
Kilberg v. Northeast Airlines, Inc. Desmond,J.C. said:
Our courts should if possible provide protection for our own State’s people
against unfair and anachronistic treatment … There is available … a way
of accomplishing this conformably to our State’s public policy and without
doing violence to the accepted pattern of conflict of law rules.” 4
The learned Chief Justice held that the $15,000 limit imposed by
a Massachusetts death statute was inapplicable, and “in view of
[New York’s] strong public policy as to death action damages
[he treated] the measure of damages … as being a procedural or
remedial question controlled by [New York] State policies”,.”5
112 Ibid., 440.
l3 Supra, f.n.15.
114 Supra, f.n.94, 527-528.
“15 172 N.E. 2d 526, 529 (N.Y. CA.). Cf., however, Pearson v. Northeast Air-
lines, Inc., 307 F. 2d 131 (C.C.A. 2d, 1962) where it was held that the full faith
and credit clause of the United States Constitution required the federal dis-
trict court of New York to apply the $15,000 wrongful death damage limitation
of a Massachusetts statute in a New York administratrix’s wrongful death
action against a Massachusetts corporation for death occurring in Massa-
McGILL LAW JOURNAL
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In this connection reference may also be made to the dictum of
Lord Denning who in Boys v. Chaplin awarded damages under the
lex fori rather than under the lex loci on the ground that the plaintiff
“gets justice here in that he gets fair compensation [w]hereas the
[foreign] law … gives him less than fair compensation”.” 6
In Canada the ordre public clause does not appear to have been
invoked so as to exclude the application of the laws of a sister
province, notwithstanding the absence of a full faith and credit
clause in the B.N.A. Act. Can a foreign law that would usually be
classified as being incompatible with the forum’s public policy be
saved from being so classified on the ground that it is similar to the
law of a sister province? While the question seems to be academic,
I would hesitate to give a categorical positive answer, as Professor
Wengler does.117
The Convention is silent on several matters as, for example, the
application of the forum law to primary classification or the manner
in which intertemporal conflicts are to be resolved. Underlying this
omission is the expectation that the courts will, wherever the Con-
vention is silent, apply general conflict rules. The ordre public clause
appears therefore to have been included out of abundant caution.”‘
CONCLUSIONS
What advantage would there be in incorporating the rules con-
tained in the Convention into our domestic law?
The Convention excludes, as was mentioned previously, the ap-
plication of the lex fori and thus discourages forum shopping. It is
argued that the Convention provides more equitable solutions to
chusetts. The limitations, contained in the laws of some of the states of the
Union, on the amount of damages which may be claimed in the case of a
fatal airplane accident have been classified as “a particularly annoying type
of conflict” and “a daily menace to the general public”: Nadelmann, Conflict
of Laws: International and Interstate (1972), 138.
116 [1968] 1 All E.R. 283, 289 (C.A.). A complementary rule is contained in the
judgment of the Supreme Court of Austria (April 9 1970) holding that the
application of a foreign law that permits the award of damages in excess
of those to be adjudged under the internal laws of Austria is not contrary
to the ordre public of Austria: JB1. 1971, 93; A.B.G.B. (ed. Kapfer) 29th ed.
(1972), 38.
“17 Supra, f.n.107, 311.
118 Cf. the objections by Messrs Yasseen and Valladio to the inclusion of an
ordre public clause (a general provision in the conflict of laws) in a document
dedicated to specific questions: supra, f.n.57, 192-193.
19741
PRODUCTS LIABILITY CONVENTION
conflicts problems than the existing rule or rules and that legislation
based on the Convention would ensure uniformity and predictability
of the law. This in turn would enable insurers to base their practice
on statutory rules and, it is hoped, to enable them to offer better
terms to customers in the export trade. This would ultimately profit
the consumer. Whether the insurance companies will be sufficiently
alert to their interest in this particular field remains to be seen.
An alternative to the conflict rules contained in the Convention
would be those developed by our own courts. While these rules, as
far as they relate to tortious liability, are the same for Quebec and
for the rest of Canada,119 the incorporation of the proposed conflict
rules into a new Civil Code ‘120 would sever this common link based
on the common law and established by O’Connor v. Wray 12 and
MCLean v. Pettigrew 12 2 as far as Quebec is concerned. To “introduce
a distinction [between Quebec and common law conflict rules] …
might be attended with inconvenient results”, 123 it is true, but, on
the other hand:
… pourquoi, au nom de queule r~gle ou de quel principe, la Cour supreme
du Canada, saisie d’un litige de droit privg, provenant de la province de
Quebec, estime-t-elle devoir trouver la r~gle de droit applicable en l’esp~ce
dans un syst~me juridique 6tranger en l’occurrence, dans le droit inter-
national privg anglais [?] 124
It would thus appear that there is little hope for the development
of uniform conflict rules by our courts, and legislation uniform
throughout the country would therefore appear to be an acceptable
solution. The fact that only one of the twelve Canadian jurisdictions
has adopted the uniform Act based on the Convention on the law
applicable to traffic accidents 125 is not very promising. If court
decisions and provincial legislation cannot be relied on to provide
us with the requisite rules, perhaps Parliament can fill the gap.
119 O’Connor v. Wray, [1930] S.C.R. 231 (from Que.); McLean v. Pettigrew,
[1945] S.C.R. 62 (from Que.). For a criticism of these and related cases see,
e.g., Cr6peau, infra, f.n.124, 27.
120 Castel and Cr6peau, Views from Canada, (1971) 18 Am.J.Comp.L. 17, 33,
writing about the Quebec equivalent of a law reform commission.
121 Supra, f.n.119.
12 Supra, f.n.119.
12 3 O’Connor v. Wray, supra, fn.119, 249 per NewcombeJ.
124 Cr6peau, De la responsabilitg civile extracontractuelle en droit interna-
tional privd qudbecois, (1961) 39 Can. Bar. Rev. 3, 27.
125The French Parliament authorized ratification by Act No.71-1036 of De-
cember 24 1971: supra, f.n.72, 98, a report on Garantie mutuelle des fonction-
naires v. Bres (April 27 1972), Cour d’appel de Nimes.
McGILL LAW JOURNAL
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It is not clear, however, whether to do so would be within its
powers. It is submitted that, on the strength of head 91(2) of the
British North America Act, 1867, this question can be answered in
the affirmative but probably only if these rules are made part of a
statute which “in pith and substance” regulates trade and commerce.
Our jurisprudence carefully distinguishes between the regulation
of trade and commerce, a matter coming within the class of subjects
in relation to which Parliament has, under head 91(2), exclusive ju-
risdiction, and the regulation of contracts of sale. Kerwin,C.J. said
in Reference re The Farm Products Marketing Act that:
… the concept of trade and commerce, the regulation of which is confided
to Parliament, is entirely separate and distinct from the regulation of
mere sale and purchase agreements. Once an article enters into the flow
of interprovincial or external trade, the subject-matter and all its attendant
circumstances cease to be a mere matter of local concern. 126
The Convention likewise distinguishes, by implication, claims
arising from contracts for the sale of goods and international, in-
cluding interprovincial and interstate, commerce. This distinction is
implied by article 1 which excludes expressly from the application
of the Convention claims against the person from whom the victim
acquired the noxious product. The Convention does not therefore
regulate claims arising out of the sale of goods. Apart from this
negative aspect, it appears from the whole tenor of the Convention
that it aims at regulating only claims arising out of trade between
two or more different jurisdictions. Incidentally, it may also relate
to matters within one and the same jurisdiction where, for ex-
ample, the product which caused the injury was acquired by the
plaintiff in the jurisdiction or in which the injury occurred, or in
which the victim has his habitual residence or his place of busi-
ness. In a situation of this kind no conflict of laws would arise
and no regulation aiming at solving it would be necessary. “[T]rans-
actions in any … natural product which are completed within the
province.., have no connection with interprovincial or export
trade”1 7 and are therefore beyond the powers of Parliament. In
Attorney-General for Manitoba v. Manitoba Egg & Poultry Asso-
ciation 2 8 Laskinj. summarized from Reference re The Farm Pro-
ducts Marketing Act ‘ 29 the meaning for constitutional purposes of
intraprovincial, as distinguished from extraprovincial,
including
external, trade and commerce. He said:
126 [1957] S.C.R. 198, 205. Italics added.
27 Re Natural Products Marketing Act, 1934, [1937] 1 D.L.R. 691, 692 (P.C.).
1
128 [1971] S.C.R. 689 (from Man.).
120 [1957] S.C.R. 198.
19741
PRODUCTS LIABILITY CONVENTION
What emerges from the various reasons of the court is that… regulation
of the marketing, or the processing and marketing, of products in a
province for consumption therein is within provincial competence…
[but] regulation of the marketing of provincial produce intended for
export or sought to be purchased for export is beyond that competence…
[R]egulation of production or manufacture must be distinguished from
regulation of transactions in the product and it cannot be said that the
former is so wholly within provincial regulatory competence as in all
cases to cover production or manufacture for export; and … even in
respect of the latter it cannot be categorically stated that ultimate extra-
provincial destination will foreclose provincial regulation of intermediate
steps in the marketing process.’3 0
Parliament has certainly the power to regulate interprovincial and
international trade, and:
… legislation necessarily incidental
to the undoubted powers of the
Dominion in respect of the Regulations of Trade and Commerce is com-
petent although such legislation may trench upon subjects reserved to
the Provinces by s.92.131
Parliament would thus have legislative jurisdiction if the imple-
mentation of the Convention were made “an integral part of a
scheme for the regulation of international or interprovincial trade”.’3 2
Article 7 of the Convention may behelpful in deciding whether
a claim is made in respect of a matter that relates to interprovin-
cial or external trade and commerce. This article permits the de-
fendant to avoid the application of any law but that of his principal
place of business if “he could not reasonably have foreseen that the
product … would be made available … through commercial chan-
nels” in a jurisdiction other than his own. This indicates that the
application of the law of any such jurisdiction is predicated on the
supplier’s -intention that the product be exported from his own
jurisdctpn or, at least, sought to be purchased for such export.
Does the making of rules which presuppose such an intention and
which are designed to resolve conflicts of laws arising out of acts,
omissions or transactions subsequent to, or connected with, or
influencing the manufacture, packaging, or bottling of a product
and its shipping beyond the borders of the province come within
the trade and commerce power of Parliament? It is not certain
whether an implementing statute which is not part of a scheme
for the general regulation of international or interprovincial trade
can, in itself, be classified as regulating such trade. This uncertainty
130 [1971] S.C.R. 689, 713. Italics added.
381 Re Natural Products Marketing Act, 1934, supra, f.n.127, 414.
132 Caloil Inc. v. A.-G. of Canada (1971), 20 D.L.R. (3d) 472, 477 (S.C. from
Ex. Ct.). per Pigeon,.
McGILL LAW JOURNAL
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can only be resolved by the courts.’
If there is federal legislative
jurisdiction, it would be worthwhile to consider whether the Fed-
eral Court – Trial Division should not be given concurrent original
jurisdiction, analogous to section 23 of the Federal Court Act, in
all cases where the statute implementing the Convention is to be
applied. The fact that an implementing statute would deal with
damage caused by the instrumentality of a product that has entered
into the flow of interprovincial or international trade would militate
in favour of federal legislative jurisdiction. On the other hand, the
ratio of the case presently to be mentioned would support provin-
cial jurisdiction.
In Northern Helicopters Ltd. v. Vancouver Soaring Association 13 4
Berger,I. held that provincial legislation is to be applied to the
apportionment of fault for a mid-air collision in the absence of
federal legislation dealing with this matter. While an accident of
this kind is a matter within the legislative jurisdiction of Parliament
over aeronautics, the apportionment of fault was held to be a
matter relating to property and civil rights. If the same reasoning
can be applied to the implementation of the Convention here under
review, dealing as it does with the regulation of the choice of law
applicable to liability for damage caused by a product that has
entered the flow of interprovincial or international trade, it would
follow that, unless Parliament occupies the field in the exercise of
its trade and commerce power, implementation is a matter within
provincial legislative jurisdiction.
Insofar as the Northern Helicopters case deals with the question
of legislative jurisdiction in relation to tortious liability and dis-
tinguishes this question from that of the jurisdiction in relation
to the activity that gave rise to that liability, it is of greater assist-
ance in resolving the question of legislative jurisdiction to imple-
ment the Convention here under consideration than cases which
aim at regulating the activity itself. If the appellate courts accept
the reasoning of the trial court, then the implementation of the
Convention must be left to the provincial legislatures.
1
3 3l ackett,C.. says at p. 3 of his working paper on the reasons for judgment
in John A. MacDonald, Railquip Enterprises Ltd. v. Vapor Canada Limited,
[1972] F.C. 1156 (C.A.), filed under No. A – 85 – 72: “In my experience, there
is no statutory provision concerning which the jurisprudence is so confusing.
It is possible to find cases to support many quite contrary views as to the
ambit of section 91(2).”
134 (1973), 31 D.L.R. (3d) 321, 329 (B.C. S.C.).
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PRODUCTS LIABILITY CONVENTION
APPENDIX A
Convention on the law applicable to products liability
The States signatory to the present Convention.
Desiring to establish common provisions on the law applicable, in inter-
national cases, to products liability,
Have resolved to conclude a Convention to this effect and have agreed
upon the following provisions
Article 1
This Convention shall determine the law applicable to the liability of the
manufacturers and other persons specified in Article 3 for damage caused
by a product, including damage in consequence of a misdescription of the
product or of a failure to give adequate notice of its qualities, its characteristics
or its method of use.
Where the property in, or the right to use, the product was transferred
to the person suffering damage by the person claimed to be liable, the Con-
vention shall not apply to their liability inter se.
This Convention shall apply irrespective of the nature of the proceedings.
Article 2
For the purposes of this Convention –
a. the word ‘product’ shall include natural and industrial products,
whether raw or manufactured and whether movable or immovable;
b. the word ‘damage’ shall mean injury to the person or damage to
property as well as economic loss; however, damage to the product itself
and the consequential economic loss shall be excluded unless associated with
other damage;
c. the word ‘person’ shall refer to a legal person as well as to a natural
person.
Article 3
This Convention shall apply to the liability of the following persons –
1. manufacturers of a finished product or of a component part;
2. producers of a natural product;
3. suppliers of a product;
4. other persons, including repairers and warehousemen, in the com-
mercial chain of preparation or distribution of a product.
It shall also apply to the liability of the agents or employees of the
persons specified above.
The applicable law shall be the internal law of the State of the place
of injury, if that State is also –
Article 4
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a. the place of the habitual residence of the person directly suffering
damage, or
b. the principal place of business of the person claimed to be liable, or
c. the place where the product was acquired by the person directly
suffering damage.
Article 5
Notwithstanding the provisions of Article 4, the applicable law shall be
the internal law of the State of the habitual residence of the person directly
suffering damage, if that State is also –
a. the principal place of business of the person claimed to be liable, or
b. the place where the product was acquired by the person directly
suffering damage.
Article 6
Where neither of the laws designated in Articles 4 and 5 applies, the
applicable law shall be the internal law of the State of the principal place
of business of the person claimed to be liable, unless the claimant bases his
claim upon the internal law of the State of the place of injury.
Article 7
Neither the law of the State of the place of injury nor the law of the
‘State of the habitual residence of the person directly suffering damage shall
be applicable by virtue of Articles 4, 5 and 6 if the person claimed to be liable
establishes that he could not reasonably have foreseen that the product or
his own products of the same type would be made available in that State
through commercial channels.
Article 8
The law applicable under this Convention shall determine, in particular –
1. the basis and extent of liability;
2. the grounds for exemption from liability, any limitation of liability
and any division of liability;
3. the kinds of damage for which compensation may be due;
4. the form of compensation and its extent;
5. the question whether a right to damages may be assigned or inheritdl;
6. the persons who may claim damages in their own right;
7. the liability of a principal for the acts of his agent or of an employer
for the acts of his employee;
8. the burden of proof insofar as the rules of the applicable law in
respect thereof pertain to the law of liability;
9. rules of prescription and limitation, including rules relating to the
commencement of a period of prescription or limitation, and the interruption
and suspension of this period.
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PRODUCTS LIABILITY CONVENTION
Article 9
The application of Articles 4, 5 and 6 shall not preclude consideration
being given to the rules of conduct and safety prevailing in the State where
the product was introduced into the market.
Article 10
The application of a law declared applicable under this Convention may
be refused only where such application would be manifestly incompatible
with public policy (‘ordre public’).
Article 11
The application of the preceding Articles shall be independent of any
requirement of reciprocity. The Convention shall ‘be applied even if the
applicable law is not that of a Contracting State.
Article 12
Where a State comprises several territorial units each of which has its
own rules of law in respect of products liability, each territorial unit shall
be considered as a State for the purposes of selecting the applicable law
under this Convention.
Article 13
A State within which different territorial units have their own rules of
law in respect of products liability shall not be bound to apply this Conven-
tion where a State with a unified ystem of law would not be bound to
apply the law of another State by virtue of Articles 4 and 5 of this Convention.
Article 14
If a Contracting State has two or more territorial units which have their
own rules of law in respect of products liability, it may, at the time of
signature, ratification, acceptance, approval or accession, declare that this
Convention shall extend to all its territorial units or only to one or more
of them, and may modify its declaration by submitting another declaration
at any time.
These declarations shall be notified to the Ministry of Foreign Affairs of
the Netherlands, and shall state expressly the territorial units to which the
Convention applies.
Article 15
This Convention shall not prevail over other Conventions in special fields
to which the Contracting States are or may become Parties and which contain
provisions concerning products liability.
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Article 16
Any Contracting State may, at the time of signature, ratification, accept-
ance, approval or accession, reserve the right –
1. not to apply the provisions of Article 8, subparagraph 9;
2. not to apply this Convention to raw agricultural products.
No other reservations shall be permitted.
Any Contracting State may also when notifying an extension of the
Convention in accordance with Article 19, make one or more of these re-
servations, with its effect limited to all or some of the territories mentioned
in the extension.
Any Contracting State may at any time withdraw a reservation it has
made; the reservation shall cease to have effect on the first day of the third
calendar month after notification of the withdrawal.
Article 17
This Convention shall be open for signature by the States which were
Members of the Hague Conference on Private International Law at the time
of its Twelfth Session.
It shall be ratified, accepted or approved and the instruments of ratifica-
tion, acceptance or approval shall be deposited with the Ministry of Foreign
Affairs of the Netherlands.
Article 18
Any State which has become a Member of the Hague Conference on
Private International Law after the date of its Twelfth Session, or which is
a Member of the United Nations or of a specialised agency of that Organisa-
tion, or a Party to the Statute of the International Court of Justice may accede
to this Convention after it has entered into force in accordance with Article 20.
The instrument of accession shall be deposited with the Ministry of
Foreign Affairs of the Netherlands.
Article 19
Any State may, at the time of signature, ratification, acceptance, approval
or accession, declare that this Convention shall extend to all the territories
for the international relations of which it is responsible, or to one or more
of them. Such a declaration shall take effect on the date of entry into force
of the Convention for the State concerned.
At any time thereafter, such extensions shall be notified to the Ministry
of Foreign Affairs of the Netherlands.
Article 20
This Convention shall enter into force on the first day of the third calendar
month after the deposit of the third instrument of ratification, acceptance or
approval referred to in the second paragraph of Article 17.
Thereafter the Convention shall enter into force
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PRODUCTS LIABILITY CONVENTION
–
–
–
for each State ratifying, accepting or approving it subsequently, on
the first day of the third calendar month after the deposit of its
instrument of ratification, acceptance or approval;
for each acceding State, on the first day of the third calendar month
after the deposit of its instrument of accession;
for a territory to which the Convention has been extended in con-
formity with Article 19, on the first day of the third calendar month
after the notification referred to in that Article.
Article 21
This Convention shall remain in force for five years from the date of its
entry into force in accordance with the first paragraph of Article 20, even
for States which have ratified, accepted, approved or acceded to it sub-
sequently.
If there has been no denunciation, it shall be renewed tacitly every five
years.
Any denunciation shall be notified to the Ministry of Foreign Affairs of
the Netherlands, at least six months before the expiry of the five year period.
It may be limited to certain of the territories to which the Convention applies.
The denunciation shall have effect only as regards the State which has
notified it. The Convention shall remain in force for the other Contracting
States.
Article 22
The Ministry of Foreign Affairs of the Netherlands shall notify the States
Members of the Conference and the States which have acceded in accordance
with Article 18,’ of the following –
1. the signatures and ratifications, acceptances and approvals referred
to in Article 17;
2.
the date on which this Convention enters into force in accordance with
Article 20;
3. the accession referred to in Article 18 and the dates on which they
take effect;
4. the extensions referred to in Article 19 and the dates on which they
take effect;
5. the reservations, withdrawals of reservations and declarations referred
to in Articles 14, 16 and 19;
6. the denunciations referred to in Article 21.
In witness whereof the undersigned, being duly authorised thereto, have
signed this Convention.
Done at The Hague, on the … day of … 19 .,
in the English and French
languages, both texts being equally authentic, in a single copy which shall
be deposited in the archives of the Government of the Netherlands, and of
which a certified copy shall be sent, through the diplomatic channel, to each
of the States Members of the Hague Conference on Private International Law
at the date of its Twelfth Session.
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APPENDIX B
An Act respecting the laws applicable to products liability
1. This Act may be cited as Conflict of Laws (Products Liability) Act.
2. (1) In this Act,
(a) “damage” means injury to the person, including death, damage
to property, whether moveable or immoveable, and economic
loss;
(b) “product” means a product supplied by a supplier, whether a
natural product, treated or untreated, or an industrial product;
(c) “state” includes a province of Canada and a territorial entity
of a state if this entity has its own legal system in respect of
products liability; and
(d) “supplier” means
(i) the producer of a natural product,
(ii) the manufacturer of a finished product or of a component
part thereof,
(iii) the supplier of a product,
(iv) any other person, including a repairer and a warehouse-
man, in the commercial chain of the preparation or dis-
tribution of a product, and
(v) the servants and agents of the persons enumerated under
subparagraphs (i) to (iv).
(2) For the purposes of this Act, it is immaterial whether the damage
was caused by the breach of duty imposed by law, including a misdescription
of the product or a failure to give adequate notice of its qualities, its charac-
teristics or its method of use, or whether the damage was caused by the
breach of a duty imposed by contract or by a statute that imposes civil
liability for its breach.
(3) A reference to the victim’s residence shall be read as a reference
to the habitual residence of the person directly suffering damage.
(4) A reference to the supplier’s business place shall be read as a
reference to the principal place of business of the supplier claimed to be
liable.
(5) A reference to the place where the damage was suffered shall be
read as a reference to the place where the effects of the act or omission that
caused the damage made themselves first felt.
(6) A reference to the laws of a state shall be read as a reference
to the laws in force ii the state excluding the conflict rules.
3. (1) Subject to this section and to section 7, this Act determines the
law applicable to the liability of a supplier for damage caused by a product
or to a product.
(2) This Act does not apply to the liability of a supplier toward the
person suffering damage to whom, without the interposition of an agent, he
transferred the property in, or the right to’ use, the product.
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PRODUCTS LIABILITY CONVENTION
(3) This Act does not apply to damage to a product and the conse-
quential economic loss unless other damage was also caused.
(4) This Act does not Apply unless the product has entered into the
flow of interprovincial or international trade.
(5) Where the victim is a Canadian resident and acquired the product
within Canada, this Act does not apply if, under its rules, a law other than
that of Canada or one of its provinces were applicable.
4. (1) Subject to this section and to section 7, the law applicable under
section 3 is the law of the state of the victim’s residence if within this state
this victim acquired the product or if the supplier’s business place is situated
therein.
(2) If subsection (1) does not apply, the law applicable under section
3 is, subject to subsection (3) and to section 7, the law of the state of the
place where the damage was suffered if either the claimant bases his claim
upon this law or if within this state there is situated
(a) the victim’s residence;
(b) the place where this victim acquired the product; or
(c) the supplier’s business place.
Alternative to “If subsection (1) does not apply…”: If the victim did
not acquire the product within the state of the victim’s residence and if the
supplier’s business place is not situated within this state …
(3) The law applicable under section 3 is, subject to section 7, the law
of the state of the supplier’s business place if neither subsection (1) nor sub-
section (2) applies or if the supplier establishes that he could not reasonably
have foreseen that the product or his own products of the same type would
be made available through commercial channels in the state of the victim’s
residence or the place where the damage was suffered, as the case may be.
Alternative to subsection (3):
(3) The law applicable under section 3 is, subject to section 7, the
law of the state of the supplier’s business place if either
(a) the victim did not acquire the product within the state of the
victim’s residence;
(b) the supplier’s business place is not situated within the state
referred to in paragraph (a);
(c) the claimant does not base his claim on the law of the state
of the place where the damage was suffered;
(d) the victim’s residence is not situated within the state referred
to in paragraph (c);
(e) the place where the victim acquired the product is not situated
within the state referred to in paragraph (c); and
(f) the supplier’s business place is not situated within the state
referred to in paragraph (c);
(g) the supplier establishes that he could not reasonably have
foreseen that the product or his own products of the same type
would be made available through commercial channels in the
or if
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state of the victim’s residence or the place where the damage
wvas suffered, as the case may be.
5. The law applicable under section 3 determines, in particular,
(a) the existence of liability and its extent;
(b) the grounds for exemption of liability, any limitation of liability,
and any division of liability;
(c) the kinds of damage for which damages may be claimed;
(d) the amount of damages;
(e) the question whether a right to damages may be assigned or in-
herited;
(f) the persons who have suffered damage and who may claim dam-
ages in their own right;
(g) the liability of a principal or master [commettant du fait] for the
acts of his agent or servant [prdpos6];
(h) the burden of proof where the rules of the applicable law in respect
thereof pertain to the law of liability; and
(i) rules of prescription and limitation including rules relating to the
commencement of a period of prescription or limitation, and the
interruption and suspension of that period.
6. The application of the law determined under section 4 does not pre-
clude the application of more stringent rules of conduct and safety contained
in the laws of the state where the product was introduced into the market.
7. No law that would be applicable under this Act applies if its applica-
tion is manifestly contrary to public policy.
8. This Act shall come into force on a day to be fixed by proclamation.
