GERMANY: GERMAN COURTS PAVE PLAINTIFFS' ROAD

BONN, Germany-Over the past 10 years, several landmark decisions by state and federal courts in Germany have eased the burden of proof for claimants and bolstered the trend toward stricter liability for manufacturers.

As a result of the legal precedents set by these decisions:

Companies must sufficiently warn consumers of potential dangers of their products to avoid liability.

The State Supreme Court in Frankfurt ruled in 1990 that a manufacturer, Milupa GmbH & Co. Kg of Fuerth, ignored scientific evidence that a tea it produced for children could cause a progressive form of tooth decay. The tea's instructions did not sufficiently warn the public of the potential danger, the court found.

A final court decision has yet to be made about the amount of any damage awards, though 400 cases are pending with pain and suffering claims ranging between 5,000 DM ($3,015) and 50,000 DM ($30,150).

A board of directors can be held collectively responsible for corporate decisions.

The German Federal Supreme Court in Karlsruhe, ruling in 1990 on criminal negligence charges brought against Mainz-based Werner & Mertz GmbH, found that the company's board did not react to evidence of the potential health dangers of a leather spray it produced.

Two Werner & Mertz executives and the entire five-member board, even those not directly involved with the decision, were found guilty of negligence resulting in personal injury.

The seven were fined a total of 120,000 DM ($72,360) and received prison terms ranging from six to 12 months.

In Germany, corporate entities cannot be indicted for criminal charges, though directors and officers can.

A company must monitor its products on the market for possible latent defects.

The Federal Supreme Court ruled in 1986 that Offenbach-based Honda Deutschland GmbH failed to adhere to its duty to monitor the safety of its products in the market.

The case involved a man who was killed in a motorcycle accident, allegedly caused by an airflow spoiler attached to the motorcycle. The same type of spoiler allegedly was to blame for other accidents.

The Federal Supreme Court ruled that companies must not only warn of dangers involving its own products but also of products manufactured for use with its products.

If product safety is in doubt, then the company must take action, such as a recall or safety warning, the court held.

This includes products made by other companies for use with Honda cars, for example.

German law does not explicitly require companies to recall defective products, though civil or criminal courts may order such a recall.

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