Product liability refers to the body of law which addresses damages or injuries
sustained from the use of faulty or “defective” products.
encompasses a wide spectrum of cases, from relatively minor damages resulting
from the malfunction of a small consumer gadget through multi-million dollar
corporate claims stemming from the operational failure of major industrial
In some cases, damages are a direct result of the defendant’s
action or inaction, while in others the defendant merely set in motion a chain
of actions which ultimately caused the plaintiff’s loss.
But one thing is
clear: some of the most publicized cases and courtroom trials in history are, at
heart, essentially product liability claims.
Israel, too, has caught the
product liability wave that has taken other western countries by storm. Israeli
parties are increasingly stepping up their efforts to pursue such claims in
Israeli courts – even against manufacturers based thousands of miles away, even
where the foreign-produced products played only a minor role in causing the
damages, and sometimes even where the case has almost no factual connection to
Israel at all.
As a result, foreign companies are now finding themselves
in the position of having to educate themselves on Israeli law and
jurisprudence. The truth is, behind the populist facade of product liability
lies pretty complex legal DNA. In Israel in particular, product liability claims
can be based on a wide variety of very distinct legal theories.
plaintiffs choose to predicate their case on the Contract Law (General Part),
1973, alleging the seller breached certain express and/ or implied contractual
obligations with the buyer by delivering a defective product. Other claimants
establish their claims using the Sales Law, 1968, alleging that the defendant
failed to live up to its warranty that the product in question was fit for a
particular purpose or of standard and average quality. Others focus on the
defendant’s deception, arguing that this constitutes a violation of the Consumer
Protection Law, 1981.
But perhaps the most common approach of all is to
argue that the defendant’s conduct constituted “negligence,” thereby violating
the Torts Ordinance [New Version].
As is the case in general tort law,
here the claimant must establish that the defendant had a duty of care toward
the claimant which was breached by the defendant’s production and/or sale of a
defective product and that said breach caused the claimant
Because the “tort route” is the most prevalent (and interesting)
of the various causes of action that may be considered, it is the one upon which
we primarily focus on here.
When analyzing a product liability claim
grounded in tort, defense lawyers often give special attention to the issue of
causation. That is, did the defendant legally and factually cause the damages
sustained by the plaintiff? Or did something else – such as the plaintiff’s own
“contributory negligence” – play a prominent role in the damages? This issue
tends to be of particular relevance in Israeli cases, perhaps due to a mindset
that is highly prevalent in Israel; the same entrepreneurial and innovative
spirit which has come to be associated with Israeli scientific and technological
ingenuity can sometimes lead to a tendency to “experiment” when using
This can translate into the use of products in ways which were
never intended by the producers of those products.
In some cases, damages
or injuries might have resulted from the incorporation of foreign products as
components into Israeli end- products.
Frequently, rather than ordering a
complete end-use product which can be quite expensive (especially due to hefty
Israeli customs duties and other taxes but also because of the origin of the
product from a quality manufacturer), Israeli contractors prefer to order parts
or components of the product and to then apply their own tailor-made
modifications to the product. While this practice may save the Israeli user
money initially, it can often lead to disastrous results in the form of
malfunction, damages or personal injury.
As a matter of Israeli law,
where a plaintiff “contributes” to his own damages by engaging in negligent
conduct, the courts adopt a strict “comparative negligence” standard, meaning
that the defendant’s responsibility to pay for damages from the defective
product will be offset by the share of fault that is ascribed to the plaintiff
for his or her own negligence.
It is important to stress that this
“contributory negligence” defense, while helpful from the defendant’s point of
view, is still not a complete defense because the defendant might still be
liable for his share of the fault.
A somewhat related but legally
distinct idea is known as the “assumption of risk” doctrine.
defense argues that the claimant knew or should have known that a particular
course of conduct would pose a risk of harm, and yet engaged in said conduct
anyway – thereby “assuming the risk” of any damages that may have
Like contributory negligence, this idea also focuses on the
claimant’s own culpability. But it also goes a step further in that it is a
complete defense, meaning that under Israeli law, there is generally a complete
bar to any recovery whatsoever by the plaintiff.
Thus, where Israeli
product users choose to experiment with products, one of the defense counsel’s
tasks is to investigate whether it can argue that this constitutes contributory
negligence, or even better, cast this conduct as an “assumption or risk” on the
part of the plaintiff.
In a recent case handled by our firm, we
represented a European manufacturer of unique walls and rails which sold various
partitions to an Israeli contractor for use in a popular hotel. In order to save
costs, instead of purchasing a complete wall unit for the site, the contractor
pieced together smaller components and, to boot, used improper appliances and
materials to construct the wall.
We were able to make effective use of
the “product misuse” defense and to convince the court that the plaintiff
assumed the risk posed by the products in question by misusing them. In so
doing, we successfully shifted the focus from the defendant’s activity to the
However, it is important that attorneys employing
this defense be prepared for a counterargument often used by plaintiffs, namely
that the defendant knew or should have known that the product would be “misused”
in a specific way and thus should have designed the product to be able to
withstand the risks posed by the alleged misuse.
Whether or not this
counterargument succeeds often turns on just how novel the plaintiff’s use of
the product was, and consequently, the degree to which plaintiff’s activity was
foreseeable to the defendant.
Israeli firms experienced in product
liability defense also obviously have a variety of other tools in their arsenal
to assist foreign manufacturers, distributors, retailers and other potential
defendants. As is the case with all cross-border litigation, another area ripe
for exploration is whether the local court is the proper forum for the
In another recent matter, we obtained the dismissal of a lawsuit
against an Italian automobile product manufacturer on the grounds that the
Israeli court lacked both personal and subject matter jurisdiction over the
As these cases become even more prevalent in
Israel, the importance of selecting local Israeli counsel with expertise in the
nuances and intricacies of Israeli jurisprudence cannot be overstated. It can
often mean the difference between a judgment for the plaintiff and one for the
Adv. Benjamin Leventhal is a partner and Menachem
C. Klein, Esq. is New York counsel at the Tel Aviv-based law firm of
Gideon Fisher & Co. They are both members of the firm’s international
department which specializes, inter alia, in product liability litigation as
well as other cross-border disputes and transactions, international arbitration
and general corporate advice. Adv. Leventhal regularly appears in Israeli courts
of all levels, including the Israeli Supreme Court.