The International Comparative Legal Guide to:

Product Liability 2005

A practical insight to cross-border Product Liability work

Published by Global Legal Group with contributions from:

Arnold & Porter (UK) LLP August & Debouzy Basham, Ringe y Correa, S.C. Blake, Cassels & Graydon LLP Borislav Boyanov & Co. C.R. & F. Rojas - Abogados Claro y Ca. Clayton Utz Crown Office Chambers Cuatrecasas Abogados, S.R.L. Dechert LLP Eversheds LLP Freshfields Bruckhaus Deringer Hofmeyr Herbstein & Gihwala Inc. Kim & Chang Kromann Reumert Kyriakides-Georgopoulos Law Firm Lejins, Torgans & Vonsovics Lovells M. & M. Bomchil Macleod Dixon Mannheimer Swartling Matheson Ormsby Prentice Morrison & Foerster LLP Norcous & Partners Paul, Hastings, Janofsky & Walker LLP Pinheiro Neto Advogados PLMJ Proxen & Partners Raidla & Partners Reynolds Porter Chamberlain Roschier Holmberg, Attorneys Ltd. Shearn Delamore & Co. Shook, Hardy & Bacon LLP Winston & Strawn LLP Wolf Theiss Attorneys

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Chapter 42

Venezuela
Macleod Dixon
1
1.1

Ramn J. Alvins

Fernando A. Planchart Padula

Liability Systems
What systems of product liability are available (i.e. liability in respect of damage to persons or property resulting from the supply of products found to be defective or faulty)? Is liability fault based, or strict, or both? Does contractual liability play any role?

special administrative or criminal liability of manufacturers and distributors (for instance, the Medicines Law and the Law for the Pharmacy Profession).
1.3 Who bears responsibility for the fault/defect? The manufacturer, the importer, the distributor, the retail supplier or all of these?

There are three (3) main sources which define Venezuelas product liability system: (i) Article 117, Constitution of the Bolivarian Republic of Venezuela (CBRV); (ii) the Consumer and User Protection Law (CUPL), published in the Official Gazette on May 4, 2004, which establishes a general framework for product liability and seeks to uphold the consumers rights; and (iii) Article 1185, Venezuelan Civil Code (VCC), which establishes tort liability. Under the aforementioned sources, we believe it is possible to sustain product liability in respect of damage either to persons or to property. Depending on the nature of the claimant-defendant relationship, contractual or tort liability shall proceed and, in many cases, both types of liability may be joined in a single claim. Even though product liability has not been a widely discussed topic in Venezuela, a few commentators and our courts case law have defined product liability as fault based on Article 1185 of the VCC. Fewer Venezuelan commentators support a strict liability thesis, based upon Article 1193 of the VCC, which in some ways follows the USA and French currents for product liability. However, strict product liability has not been recognised by our courts; on the contrary, many arguments have arisen against a strict liability thesis in this field. According to Article 2 of the CUPL, provisions of such law are of public policy. Moreover, Article 87 (1) of the CUPL establishes that clauses included in an adhesion contract that exonerate, lessen or limit product liability are to be considered null and void. Thus contractual liability may only be regulated by the parties if limitations do not infringe upon the rights of consumers as provided in the CUPL.
1.2 Does the state operate any schemes of compensation for particular products?

Pursuant to Article 93 of the CUPL, producers, manufacturers, assemblers, importers, merchants with registered brands, distributors, retailers, and anyone who participates in the distribution chain, shall be considered jointly and severally liable for any civil compensation arising from damage caused by products or services rendered.
1.4 In what circumstances is there an obligation to recall products, and in what way may a claim for failure to recall be brought?

Pursuant to Article 9 of the CUPL, if a product is determined to be a considerable threat or risk to health (even if used properly), and provided that the consumer has not been adequately informed of such threat or risk, the provider shall, without prejudice of any liabilities, proceed to: (i) recall the product from the market; (ii) substitute the product with another different product; or (iii) replace the product at his own cost. Notwithstanding the above, the provider cannot be forced to recall the products himself, but may be fined if he does not comply with this obligation. In such case, a court may appoint a third party to recall the products, at the providers own cost.

2
2.1

Causation
Who has the burden of proving fault/defect and damage?

Apart from the general regime for the defence of consumers rights provided for in the CUPL and the VCC, there are no special compensation regimes for consumers for any particular products. Nonetheless, some laws do provide for

We have previously stated that two (2) different positions coexist in Venezuela regarding product liability: (i) a dominant current, which sustains that product liability is fault based; and (ii) a minor current, which sustains that product liability should be considered strict. In our opinion, and following the dominant current, the claimant (i.e. the consumer) must prove that the fault/defect of the product,

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Macleod Dixon
and any damage arising from it, are attributable to the negligence, imprudence or lack of expertise of the defendant (i.e. culpa). Indeed, pursuant to Article 506 of the Venezuelan Code of Civil Procedure (CCP), each party has the burden of proving his own pleadings. This has been recognised as a general principle in Venezuela.
2.2 What test is applied for proof of causation? Is it enough for the claimant to show that the defendant wrongly exposed the claimant to an increased risk of a type of injury known to be associated with the product, even if it cannot be proved by the claimant that the injury would not have arisen without such exposure? 2.4

Venezuela
Does a failure to warn give rise to liability and, if so, in what circumstances? What information, advice and warnings are taken into account: only information provided directly to the injured party, or also information supplied to an intermediary in the chain of supply between the manufacturer and consumer? Does it make any difference to the answer if the product can only be obtained through the intermediary who owes a separate obligation to assess the suitability of the product for the particular consumer, e.g. a surgeon using a temporary or permanent medical device, a doctor prescribing a medicine or a pharmacist recommending a medicine? Is there any principle of learned intermediary under your law pursuant to which the supply of information to the learned intermediary discharges the duty owed by the manufacturer to the ultimate consumer to make available appropriate product information?

Venezuela

In Venezuela, only direct and verifiable damage may be awarded compensation. Thus the claimant must prove (i) the actual existence of an injury; (ii) that the injury is the direct consequence of the claimants exposure to the product; and (iii) that the defendants conduct did not meet the bonus pater familia standard in manufacturing or distributing the product. The bonus pater familia constitutes a general standard of diligence required in the execution of obligations.
2.3 What is the legal position if it cannot be established which of several possible producers manufactured the defective product? Does any form of marketshare liability apply?

Market-share liability is not recognised in Venezuela as a possible solution in distributing concurrent liabilities. As stated previously, pursuant to Article 93 of the CUPL, all intervening parties within a determined chain of supply shall be jointly and severally liable for any obligations arising from any fault/defect in their distributed products. Thus the consumer can request total compensation for any damage suffered from anyone involved in the chain. Pursuant to Article 13 of the CUPL, anyone from the chain of supply who has paid compensation to a consumer for fault/defect of any distributed products, shall have the right to recover any compensation paid from the individual or legal entity actually responsible. On the other hand, according to Article 1195 of the VCC, whoever has compensated the damage in its entirety, shall have an action against each of the co-obligated individuals for an amount which shall be established by the judge in accordance with the seriousness of the fault committed by each one of them. Should it be impossible to determine the extent of each individuals liability, liability shall be shared equally amongst them.

Pursuant to Article 6 (3) of the CUPL, consumers have the right to be informed, among other things, of the risks, composition and contraindications of any product. Each individual involved in the production and distribution chain is under the obligation to provide the necessary information, advice or warnings about the product. According to Article 8 of the CUPL, the manufacturer or provider of the product shall immediately inform the authorities and the public about any risks or dangers concerning a product. Information must be provided through means adequate to promptly inform the public, at the sole cost of the manufacturer or provider. Should the manufacturer or provider fail to inform the consumer about any risks or dangers involved in the use of their products, the manufacturer or provider shall either recall or replace the product at their sole cost. Besides this, the manufacturer or provider will only be subject to administrative liability (i.e. fines set by the competent administrative body). We have no principle of learned intermediary in Venezuela. The supply of information from each of the individuals involved in the distribution chain must be enough to reach the ultimate consumer. No discharge of this duty seems to be applicable under the CUPL.

3
3.1

Defences and Estoppel

What defences, if any, are available?

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Under Venezuelan law, elements constituting a tort are (i) inexcusable non-compliance with an obligation; (ii) existence of actual and reparable damage; and (iii) causal relationship between the inexcusable non-compliance and the alleged damage. Even though the claimant is the one bearing the burden of proving the existence of the aforementioned elements, the defendant may bring any available defence tending to demonstrate otherwise. a) The defendant may plead that no fault can be attributed to him. Thus the defendant may prove that he always maintained prudent and diligent conduct by meeting the bonus pater familia standard which, in turn, weakens the claimants plea that the defendants fault was the direct cause of the damage suffered. b) Pursuant to Articles 1271 and 1272 of the VCC, the

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Macleod Dixon
defendant may exempt himself from contractual liability for damage, by proving that non-compliance originated from a non-attributable cause, including an unforeseen event or force majeure. c) Venezuelan commentators and case law have recognised contractual liability exemptions in tort cases, by extending Article 1193 of the VCC to all cases of tort. Article 1193 establishes that an individual may exempt himself from liability for damage, provided that he proves that the damage was due to (i) the victims own fault; (ii) a third partys conduct; (iii) an unforeseen event; or (iv) force majeure. In order for non-attributable causes to exempt the defendant from product liability, such causes must (i) absolutely bar the defendant from complying with his obligations; (ii) be unforeseeable and unavoidable; and (iii) not be attributable to any extent to the defendants fault. d) When in the presence of contractual liability, the defendant may bring any defence arising from any liability restrictions set forth in the agreement. Under the CUPL and to protect the consumers, certain limitations to such restrictions apply, mainly when in presence of an adhesion contract. Therefore, it is possible that certain clauses within the agreement be considered null and void.
3.2 Is there a state of the art/development risk defence? Is there a defence if the fault/defect in the product was not discoverable given the state of scientific and technical knowledge at the time of supply? If there is such a defence, is it for the claimant to prove that the fault/defect was discoverable or is it for the manufacturer to prove that it was not? 3.4

Venezuela
Can claimants re-litigate issues of fault, defect or the capability of a product to cause a certain type of damage, provided they arise in separate proceedings brought by a different claimant, or does some form of issue estoppel prevent this?

There is no issue preclusion or estoppel by judgement in Venezuela. Therefore, adjudication by a court of material issues shall not be binding upon third parties or even the same parties in any subsequent proceedings. All controversial matters shall be the object of proof by the party carrying such burden, irrespective of such matters having been discussed and settled in previous trials. Nonetheless, according to the res judicata rule contained in Article 49 of the Constitution of the Bolivarian Republic of Venezuela (CBRV); Article 1395 of the VCC; and Article 273 of the CCP, parties to a claim are barred from relitigating the same claim or cause of action, if such claim has been adjudged by a final judgment rendered by the competent court. For the res judicata rule to apply, elements constituting the second claim (i.e. thing sued; cause of action; parties involved and their quality as claimant and defendant), must be identical to those of the original claim.

4
4.1

Procedure
Is the trial by a judge or a jury?

Pursuant to Article 1274 of the VCC, only that damage which was foreseen or foreseeable at the time of the execution of an agreement, may be compensated. The latter clearly applies to contractual liability, but there is no legal argument to sustain that such provision may be extended to damage arising from tort. Pursuant to Article 506 of the CCP, should the defendant bring this defence, he will have the burden of proving that the fault/defect was not discoverable.
3.3 Is it a defence for the manufacturer to show that he complied with regulatory and/or statutory requirements relating to the development, manufacture, licensing, marketing and supply of the product?

According to the CUPL, consumers injured by defective products can claim reparation either before the Autonomous Institution for the Defence and Education of Consumers (INDECU) or before the courts. Consumers may try for mediation, conciliation or arbitration through the Conciliation and Arbitration Chamber of the INDECU. These proceedings are conducted by one mediator or arbitrator. The arbitration award shall be binding upon the parties and, in the case of non-compliance with its terms, may be enforced by a court of law. Article 168 of the CUPL establishes that trial proceedings shall be carried out in accordance with the CCPs Oral Trial, irrespective of the amount claimed and provided that no special procedure exists. The Oral Trial is meant to be an expeditious procedure, as opposed to common written trial proceedings, and is carried out before a judge.
4.2 Does the court have power to appoint technical specialists to sit with the judge and assess the evidence presented by the parties (i.e. expert assessors)?

Compliance with regulatory and/or statutory requirements may assist the defendant in demonstrating that he was diligent in manufacturing, marketing or supplying the product. Nonetheless, pursuant to Article 12 of the CUPL, authorisation granted by the State to a manufacturer to commercialise goods which may prove to be dangerous for the health of the population, shall not exonerate the manufacturer from any liability due to damage caused by the defective products. Thus compliance with regulatory and/or statutory requirements per se will not exonerate the manufacturer from liability.

The Oral Trial established in Article 859 of the CCP, makes no reference to the judge having the power to appoint expert assessors. Nonetheless, Articles 401 and 514 of the CCP expressly grant the judge the power to order an expert to assist the court upon certain issues, or to elaborate further or explain issues which were discussed in trial. Articles 401 and 514 seek to assist the judge in clarifying uncertain issues after the parties have presented their evidence. We believe the judge of an Oral Trial may have this power, provided the use of such power does not go against the oral nature of the proceedings.

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Venezuela

Macleod Dixon
4.3 Is there a specific group or class action procedure for multiple claims? If so, please outline this. Are such claims commonly brought? 4.8

Venezuela
Does the court appoint experts to assist it in considering technical issues and, if not, may the parties present expert evidence? Are there any restrictions on the nature or extent of that evidence?

According to Article 26 of the CBRV, and Article 80 of the CUPL, collective and class rights are recognised to exist and deserve the States protection. Nonetheless, neither a special procedure exists in Venezuela to try class actions, nor definition of collective or class rights has been much developed. Indeed, due to the somewhat recent recognition of collective rights in Venezuela (CBRV-1999; CUPL-2004), collective claims are not commonly brought in our country; however, such claims may become more frequent in the future.
4.4 Can claims be brought by a representative body on behalf of a number of claimants e.g. by a consumer association?

As stated in question 4.2 above, pursuant to Articles 401 and 514 of the CCP the judge has the power to order an expert to assist the court upon certain issues, or to elaborate further or explain issues which were discussed in trial. According to Articles 451 and in accordance with the CCP, the parties also have the right to present expert evidence. Under Venezuelan law, expert evidence is restricted to issues of fact.
4.9 Are factual or expert witnesses required to present themselves for pre-trial deposition and are witness statements/ expert reports exchanged prior to trial?

Venezuela

Article 80 of the CUPL allows for collective claims to be brought when class rights are at stake. Article 76 (2) of the CUPL grants duly constituted consumer associations the right to represent consumers collective rights before administrative or judicial bodies. Both the INDECU (Article 110 of the CUPL) and the Public Defenders Office (Article 281 Venezuelan Constitution), also have the power to bring collective claims on behalf of consumers. However, the aforementioned entities may only bring claims regarding criminal and administrative liability.
4.5 How long does it normally take to get to trial?

There is neither pre-trial conference nor pre-trial discovery in Venezuela. All the evidence is presented and studied at the trial hearing.
4.10 What obligations to disclose documentary evidence arise either before proceedings are commenced or as part of the pre-trial procedures?

As stated above, there are no pre-trial procedures (including pre-trial discovery) under Venezuelan law.

5
5.1

Time Limits
Are there any time limits on bringing or issuing proceedings?

There are no pre-trial proceedings in Venezuela. Thus trial procedure begins as soon as the claim is filed with the competent court.
4.6 Can the court try preliminary issues, the result of which determine whether the remainder of the trial should proceed? If it can, do such issues relate only to matters of law or can they relate to issues of fact as well, and if there is trial by jury, by whom are preliminary issues decided?

Pursuant to Article 866 of the CCP, the defendant may bring preliminary issues (for example, lack of jurisdiction, lack of standing, formal deficiencies in the lawsuit, res judicata, the existence of a legal prohibition on admitting the proposed claim, etc.) to the attention of the court. Depending on the preliminary issue and its recognition by the court, the remainder of the trial may or may not proceed. Under Venezuelan law, preliminary issues relate only to matters of law, and are decided by the trial judge pursuant to a special procedure established in the CCP.
4.7 What appeal options are available?

Pursuant to Article 1977 of the VCC, all personal actions (including, in our opinion, actions for product liability) have a ten-year statute of limitations period, unless otherwise provided in special cases. Article 1525 of the VCC establishes a special regime for contractual liability arising from defective products. Thus depending on whether it is real estate or goods, a one-year or three-month limitation period would apply (40 days when dealing with animals). However, due to the protective proconsumer nature of the CUPL, we believe Article 1525 of the VCC would not apply to cases governed by the CUPL.
5.2 If so, please explain what these are. Do they vary depending on whether the liability is fault based or strict? Does the age or condition of the claimant affect the calculation of any time limits and does the court have a discretion to disapply time limits?

Pursuant to Article 878 of the CCP, decisions from the Trial Court may be appealed before the Court of Appeals. Decisions from the Court of Appeals may, in turn and depending on the amount of the claim, be appealed through a cassation writ before the Supreme Tribunal of Justice.

As stated above, time limits on bringing a product liability claim are based on the ten-year statute of limitations period. The statute of limitations period is not conditioned by the claimants age or situation, and courts have no discretion to ignore it.
5.3 To what extent, if at all, do issues of concealment or fraud affect the running of any time limit?

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Issues of concealment or fraud do not affect the running of the statute of limitations period.

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6
6.1

Venezuela

Damages
What types of damage are recoverable e.g. damage to the product itself, bodily injury, mental damage, damage to property?

his feelings, shame or degradation. This may appear to be some kind of punitive damages; however, damages for pain and suffering are meant to compensate the claimants loss, and not to punish the defendants wrong. Compensation goes to the injured party and not to the State.
6.4 Is there a maximum limit on the damages recoverable from one manufacturer e.g. for a series of claims arising from one incident or accident?

All damage referred to in this question are recoverable in Venezuela, provided that the injury is the immediate cause of a contractual breach or tortious act on the part of the defendant or any of the co-obligated individuals or legal entities. Three types of damage are recoverable in Venezuela: (i) compensatory damage (daos emergentes), a decrease in the claimants assets directly and immediately attributable to the contractual breach or tortious act; (ii) loss of profits (lucro cesante), deprivation of earnings to which a claimant was entitled, and which may be seen as nonincrease of assets; and (iii) pain and suffering (moral damages), an emotional or non-material injury to an individual. Furthermore, Venezuelan commentators have been developing a thesis allowing for the possibility of recovering damages from a so-called loss of opportunity. Loss of opportunity would constitute a future damage, and its reparation is justified by the claimant having been deprived of the opportunity of obtaining a profit. Pursuant to Article 1275 of the VCC, consequential or indirect damage is not recoverable in Venezuela.
6.2 Can damages be recovered in respect of the cost of medical monitoring (e.g. covering the cost of investigations or tests) in circumstances where the product has not yet malfunctioned and caused injury, but it may do so in future?

There is no limit. Any claimant would have the right to file suit for damages to the extent necessary to compensate his loss, and irrespective of how many claims arise from the same wrong.

7
7.1

Costs / Funding
Can the successful party recover: (a) court fees or other incidental expenses; (b) their own legal costs of bringing the proceedings, from the losing party?

Pursuant to Article 274 of the CCP, both court fees (or other incidental expenses) and the successful partys own legal costs of bringing the proceedings may be recovered from the losing party. According to Article 286 of the CCP, recoverable legal costs are limited to thirty percent (30%) of the amount claimed. Each proceeding, appeal or incidental proceeding thereof must be considered separately in establishing court fees and legal costs.
7.2 Is public funding e.g. legal aid, available?

In Venezuela, only direct and actual damages are recoverable, meaning that: (i) the injury must exist by the time damages are claimed; or (ii) the damages must be the direct consequence of a real and existing injury. Thus eventual or speculative damages may not be recovered.
6.3 Are punitive damages recoverable? If so, are there any restrictions?

There is no public funding or legal aid available in Venezuela. The interested party must provide/pay any fees or legal costs arising from the proceedings.
7.3 If so, are there any restrictions on the availability of public funding?

See answer to question 7.2 above.

7.4 Is funding allowed through conditional or contingency fees and, if so, on what conditions?

In Venezuela, only damages intended to compensate the injured party for any loss or aggravation suffered may be recovered. Damages are not meant to either punish the defendant or set an example to the community. Thus punitive damages are not recoverable. As stated in question 6.1 above, damages for pain and suffering are recoverable in Venezuela. As opposed to actual damages which tend to compensate the claimant for his loss of property, damages for pain and suffering seek to compensate the claimant for mental anguish, laceration of

The party may contract professional legal services through conditional or contingency fees. Nonetheless, lawyers are prohibited from obtaining payment of their fees directly from the courts adjudication to their clients (prohibition of the cuota litis agreement). In other words, an agreement whereby the client assigns his lawyer a percentage of any compensation obtained in trial, is null and void under Venezuelan law.

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Venezuela

Macleod Dixon

Venezuela

Ramn J. Alvins
Macleod Dixon Centro San Ignacio, Torre Coprnico, piso 8 Av. Blandn, La Castellana Caracas, 1060. Venezuela

Fernando A. Planchart Padula

Macleod Dixon Centro San Ignacio, Torre Coprnico, piso 8 Av. Blandn, La Castellana Caracas, 1060. Venezuela

Venezuela

Tel: Fax: Email: URL:

+58 212 276 0009 +58 212 276 0011 ramon.alvins@macleoddixon.com.ve www.macleoddixon.com

Tel: Fax: Email: URL:

+58 212 276 0028 +58 212 276 0011

fernando.planchart@macleoddixon.com.ve

www.macleoddixon.com

Ramn is a partner of Macleod Dixon in Caracas, heading the Litigation and Arbitration Department. In 1986, he received his degree from Universidad Catlica Andrs Bello, Caracas, and his Master in Civil Procedural Law from the University of Illinois Urbana-Champaign in 1993. Ramn has over fifteen years experience in litigation and arbitration, and wide experience in corporate, labour and civil law. He has participated in several bankruptcy procedures and reorganisations, and has served as counsel in many arbitration procedures, both in Venezuela and abroad. Ramn also has ample experience in negotiating and obtaining settlements and contracts. He has argued in proceedings before the Supreme Court of Justice on matters related to both Constitutional Injunctions and Appeals for Annulment.

Fernando received his law degree cum laude from the Universidad Catlica Andrs Bello in 2001. He joined Macleod Dixon in February 2000 as a paralegal, and was offered a position as an associate with the firm in August 2001. Fernando practices in the Firms labour litigation department, and is a member of the State of Miranda Bar Association. As a labour litigation associate, his practice has been mostly focused on employment and commercial law. He has also handled a number of claims for wrongful dismissal and has litigated collection cases. Since 2003, Fernando has been Teachers Assistant at the Universidad Catlica Andrs Bello in Civil Procedural Law I and General Theory of the Process. He is currently enrolled as an LL.M. student at Harvard Law School.

Macleod Dixon is a 240-lawyer international firm, focused for nearly a century on providing advice to clients globally. With offices in Calgary, Caracas, Rio de Janeiro, Moscow, Almaty, Atyrau and Toronto, we have developed a reputation for our ability to provide top-quality legal advice. Macleod Dixon opened in Caracas in 1997, formed in the wake of the Third Reactivation Round, and has grown from four original lawyers to a staff of 68, including 35 lawyers and 10 other professionals. Macleod Dixon-Caracas provides corporate and commercial consultation to private businesses, public companies, joint ventures and non-profit organisations which operate in a great variety of sectors and industries. Our typical clients are large public or privately-owned multi-national corporations.

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