Global Product Liability

Overview

The United Arab Emirates (UAE) has seen a slow and steady progression in its legislative approach to handling product liability issues, which it continues to progress.

The UAE has adopted a classification of goods system based on international standards. Furthermore, in 2006, UAE Federal Law No. 24 of 2006 on Consumer Protection (the "Consumer Protection Law") introduced direct product liability regulations across the UAE for the first time. More recently, Federal law No. 10/2018 ("Product Safety Law") was passed, introducing a further set of legal requirements around "unsafe products".

The rights and procedures for filing claims generally are provided for in the Civil Code, Commercial Transactions Code and the Criminal Code. Whilst there is no provision for class actions within the UAE, which might give the impression that the region is somewhat protected from the risk of claims by consumers, both the Federal Consumer Protection Department ("CPD") at the Ministry of Economy and the UAE courts are very pro-consumer in their attitudes generally. If the Consumer Protection Law is infringed, then it is rare to see a court ruling in favour of the supplier. Equally, in the event that a supplier reports a "defective" product to the CPD (as required under the Consumer Protection Law), the CPD will require that supplier to work closely with it to make the requisite announcements in order to ensure that consumers are made aware of the issue and are given the opportunity to have their "defective" product repaired or replaced. "Defect" is defined very broadly under the Consumer Protection Law, meaning that the likelihood of a notification being required in the event of discovery of an underlying product issue is, strictly speaking, relatively high.

The UAE is a civil law jurisdiction, which means that the laws and regulations are codified and courts are not bound to follow the prior decisions of superior courts. The majority of court judgments are not publicly available, making it very difficult to extract clear statements of principle from cases, especially as judgments are not intended to be authoritative statements of law.

In the UAE, DLA Piper has in-depth experience in the food, pharmaceutical and consumer product markets, as well as advising on issues around product recall and the liability of directors.

Consumer products

The Consumer Protection Law introduced potential monetary fines for "suppliers" of consumer products in the UAE in the event that any "harm" is suffered by consumers in the "ordinary use" of the product. Such fines may be between AED 5000 and AED 200,000, depending upon the precise nature of the infringement. In the event that the same violation is repeated within one year, the fine may be doubled. "Suppliers" are broadly defined, covering manufacturers, sellers, distributors, traders, importers and exporters.

Under the Consumer Protection Law, consumers have a right to "compensation for personal or material damages", with any agreement to the contrary being null and void. In addition, under the CPD Implementing Regulation consumers have a right to right to "compensation and fair settlement of his legitimate claims, including to be compensated for the bad quality goods, unsatisfactory services, or any other practices that may cause harm to the consumers". Any consumers who have a complaint are entitled to approach the CPD with that complaint, with the CPD then having the power to represent the affected individual(s) in any action against the supplier.

Suppliers and / or their commercial agents are under a general obligation to offer repair services and make available spare parts for products they manufacture or sell, with any contractual clause waiving that obligation will be void. When goods are manufactured locally and the consumer are not offered such services, the burden of any resulting liability is shared jointly by the manufacturer and seller.

When a supplier discovers an underlying defect in its product the Consumer Protection Law obliges them to notify both the CPD, and any affected consumers, before replacing, repairing and /or paying back the value of the good to the consumer. Whilst not entirely clear from the drafting of the Consumer Protection Law (when read alongside the CPD Implementing Regulation), there appears to be a distinction drawn between a contractual "guarantee" or "warranty" (with the terms being used interchangeable, depending upon the translation taken), which can be time limited, and a statutory "guarantee" which seems to apply indefinitely in the case of "defective" products, regardless of any contractually agreed warranty period. Anecdotally we are aware that the CPD is willing to disregard any contractually agreed warranty period in an instance where an underlying defect in a product is discovered.

The CPD Implementing Regulation sets out detailed requirements around the notification including a comprehensive list of information which must be provided to the CPD, providing details about the affected product, the nature defect and the number of items sold in the UAE. In addition, the supplier will be required to provide a draft copy of the advertisement which must be published in order to disclose the issue with the product to consumers, as well as potentially requiring a locally produced testing report to verify the nature of the defect.

The Federal CPD (as well as the Emirate level consumer protection departments) takes a strongly pro-consumer attitude and, in the event that any fault or wrongdoing is discovered, it will look to aggressively protect the rights of UAE consumers.

The safety and quality of products (whether produced in the UAE or imported) is regulated by the Emirates Authority for Standardisation and Metrology ("ESMA"), which oversees all matters relating to standards, measurements, quality and standardisation of products. ESMA has recently established an online platform (Mannaa) for the reporting and recall of "unsafe" products (which is mandatory, under the Product Safety Law) , with details of recently recalled products being published regularly on its website.

In the event of a failure to comply with the Unsafe Product Law a UAE Court may issue fines of up to AED 3,000,0000, as well as potentially confiscating (and ordering the destruction of) the infringing products and even cancelling the supplier’s business licence.

The regulatory authorities for pharmaceuticals in the UAE are the UAE Ministry of Health and Prevention, the Department of Health Abu Dhabi, the Dubai Health Authority and the Sharjah Health Authority. These authorities monitor the licensing of pharmacists and pharmacies, the registration of pharmaceuticals as well as compliance with the advertising guidelines for drugs. The Municipality in Dubai deals with food related recalls.

Regulatory

The Department of Economic Development of each emirate has created a CPD in line with the provisions of the Law, and any consumers who have a complaint will approach the CPD with their complaint, who will represent the affected party in any action against the supplier.

Since they were established, these CPDs have adopted a pro-consumer attitude and, in the event that any fault or wrong doing is discovered, will look to aggressively protect the rights of a consumer who has been harmed.

The safety and quality of products (whether produced in the UAE or imported) is regulated by the Emirates Authority for Standardisation and Metrology, which oversees all matters relating to standards, measurements, quality and standardisation of products.

The regulatory authorities for pharmaceuticals in the UAE are the UAE Ministry of Health, the Health Authority Abu Dhabi, the Dubai Health Authority and the Emirates Health Authority. These authorities monitor the licensing of pharmacists and pharmacies, the registration of pharmaceuticals and advertising guidelines for drugs. The municipality in Dubai deals with food related recalls.

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