Just like any new technology, LED lighting is creating all sorts of new legal and commercial challenges, and the temptation is strong for LED manufacturers to show that they have the same confidence in their products as the purveyors of longer-established technologies.
Two particular points of contention are claims about the useful life of LED products (often with no empirical evidence to substantiate them), and uncertainty around the point at which an LED product can be said to have ‘failed’.
Throwing around figures such as 50,000 or 100,000 hours life in promotional literature has become the norm among LED manufacturers. But such boldness is not without its legal risks – and a disgruntled customer does not need a warranty to have a strong case if a product fails to perform as promised. Here are five things that anyone buying or supplying LED products should be aware of.
1. Advertising codes
At an ethical level, the UK’s advertising codes provide that companies must hold documentary evidence so claims made about products in ads and promotional materials are capable of substantiation and are not misleading. If manufacturers do not have empirical evidence to justify their 50,000 or 100,000-hour claims for the anticipated life of an LED product, they would appear to be in breach of the code. Anyone can complain to the Advertising Standards Authority – you just fill in a form on its website giving details of the ad and how you think it breached the code. The problem is, the ASA has no legal teeth. It might name and shame a company or ask it to remove an ad, but it relies on advertisers to adhere to its code voluntarily.
2. Trade Descriptions Act 1968
The legal teeth come in the form of the Trade Descriptions Act 1968, which makes it a criminal offence to apply a false trade description to goods. A trade description includes any claims as to the ‘fitness for purpose, strength, performance, behaviour or accuracy… of goods’. An unqualified and inaccurate claim that an LED product is going to last for X thousand hours clearly falls under this, and so runs the risk of being deemed a false trade description. At the very least, then, manufacturers of LED products that make claims they can’t substantiate run the risk of being challenged by Trading Standards Officers.
3. Sale of Goods Act 1979
The next issue to consider is the contractual situation. The starting point is to look at the general law on the sale of goods, governed primarily by the Sale of Goods Act 1979. This act implies a term into most contracts that the goods will be of ‘satisfactory quality’. The definition of satisfactory quality includes the durability of the goods as well as their ‘fitness for all purposes for which goods of the kind in question are commonly supplied’.
A representation about the life of an LED product – 25,000, 50,000, 100,000 hours – could be taken as a benchmark from which to assess the durability of that product. If in practice the useful life falls short of any pre-estimate, then the claim could be said to be a misrepresentation that wrongly induced the buyer to enter into the contract. The actual lack of durability could also amount to a breach of the implied term of satisfactory quality.
Bear in mind that satisfactory quality and durability must be assessed at the point the product was first sold ‘as new’. So there might be scope for a manufacturer to argue that the product failed because it wasn’t properly installed or used. But in the absence of evidence of such misuse, the starting point will normally be that a product that fails before the expiry of its anticipated useful life is likely to have been of unsatisfactory quality.
In practice, the buyer of an LED product will usually have six years from the date of purchase within which to commence a potential claim based either on misrepresentation or breach of contract, thanks to the Limitation Act 1980.
Where products are purchased by consumers, it is not possible to exclude from their contract the implied term about satisfactory quality. In the case of commercial contracts between businesses, it is only possible to exclude it if, in the circumstances, it was ‘reasonable’ to do so.
“In practice, many warranties do not enhance or extend the right of the buyer of a product at all”
Most contracts produced by manufacturers for use in a commercial context use express warranty provisions to appear to supplement the terms about ‘satisfactory quality’. These warranty provisions effectively become a representation by the manufacturer as to what, overall, amounts to ‘satisfactory quality’ for their product – while also defining and limiting the way in which the product should be installed and used.
In practice, many warranties do not enhance or extend the right of the buyer of a product at all, they just define and restrict the scope of potential liability (as Simon Waldron of Sainsbury’s seems to have realised). Where warranties of this nature can add real value is if, on their terms, they grant an express right to the end user to make a direct claim against the manufacturer (rather than the supplier) for any defects. Without such an express right it is unlikely that the end user would have any direct contractual right of redress against the manufacturer, because there is no contract between them.
But warranties also usually restrict or define what the manufacturer will do if a valid claim is made (see Alan Tulla’s article on warranties for more on this). For the claimant there is a balance to be struck between pursuing an ordinary legal claim, with all the potential cost and hassle that that may entail, and pursuing a warranty claim – which is often easier but likely to lead to less generous recovery. For small claims, warranties may be worth their weight in gold, but for larger, more serious claims involving potentially wider loss and damage, a warranty claim is unlikely to provide an adequate solution.
• Read Alan Tulla’s accompanying article to find out how to get your warranty, your way
5. Liability of professionals
The group that is in potentially the most sensitive position when it comes to legal issues regarding LED products are not the manufacturers or end users, but the other professionals in the supply chain who sit between them.
“If a designer knows about potential problems with an LED product in a particular situation, and specifies it anyway, they may be exposed to liability”
These include the lighting designers, engineers and others who will often be responsible for specifying a product, designing a scheme using the product and installing it in a building. It is they who may have direct contractual liability to ensure that what they have designed or installed meets (and continues to meet) any specification they have signed up to. They will almost certainly have various duties of care to ensure that any work they have undertaken and any design they have developed has been completed in a competent and effective manner.
Regardless of any contractual representations or small print in the manufacturer’s terms and conditions, if a designer is aware of potential problems and difficulties with a particular LED product in a particular situation, then they may be exposed to liability if they nonetheless specify the use of the product in circumstances when they knows or ought reasonably to have foreseen that this might give rise to problems. The duty may well be one to ensure that the end user has been given appropriate advice so they can make an informed decision about what solution to choose.
In most cases the end user is likely to have a far closer relationship with the people who have installed or designed their lighting system than with the manufacturer, and they are likely to be the first port of call when problems arise. This will lead to a degree of self-policing because these professionals are unlikely to expose themselves to undue risk or reputational damage by recommending or using a product in which they do not have full confidence.
Another wrinkle can arise if an aggressive manufacturer discovers that intermediaries are not recommending its products on technical grounds, and resorts to threats of defamation – but such a heavy-handed approach is rare.
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