In review: the product liability framework in Israel

All questions

Introduction to the product liability framework

The Defective Products Liability Law, 5740-1980 (DPL) specifically regulates the issue of defective products that result in bodily injury. The DPL imposes strict liability on manufacturers of defective products, the liability for which is subject only to limited and specific defences and does not require proof of fault on the part of the manufacturer but only the existence of a defect in the manufacturer’s product. Nonetheless, a prescribed cap is imposed in the DPL for non-pecuniary damages, as well as for loss of earnings and loss of earning capacity. The DPL also provides a shortened limitation period. In view of these limitations, the DPL is seldom solely relied on, and injured persons usually also utilise other causes of action that are not subject to these limitations.

Liability for a defective product may also be based on a tort claim filed in reliance on the Civil Wrongs Ordinance (New Version) 5728-1968 (CWO)² or on a claim for breach of contract filed in reliance on the Contracts Law (General Part), 5733-1973 (the Contracts Law); the Sale Law, 5728-1968 (the Sale Law); or the Sale Law (International Sale of Goods), 5760-1999 (the International Sales Law) (the latter being the Israeli ratification and adoption of the United Nations Convention on Contracts for the International Sale of Goods).

Liability for failure to disclose material information relating to a product may be imposed by virtue of the Consumer Protection Law, 5741-1981 (CPL), and deviation from standards governing the manufacture, distribution and sale of products may be actionable under the Standards Law, 5713-1953 (SL).

Regulatory oversight

i Israeli Standardization Administration

The Israeli Standardization Administration (ISA), which falls under the auspices of the Ministry of Economy and Industry, oversees the adoption of and adherence to the relevant standards under the SL. The ISA may determine that a specification of a product or certain working process be listed as an Israeli standard. The Minister of Economy may declare an Israeli standard as an official standard. Upon such a declaration, no person may deal with any such product or perform such a working process unless they comply with the requirements of the official standard.

The SL regulates the issue of product recalls of products that are subject to an official standard and, inter alia, authorises the Commissioner of Standardization to impose a product recall and prescribes the circumstances under which a safety event or deviation from the applicable standard must be notified to the Commissioner of Standardization. The SL imposes tractability obligations alongside requirements, inter alia, to quality checks and approval for the marketing of standard subject products. In addition, Israeli Standard 10393, which is not an official standard but voluntary, adopts in its entirety international standard ISO 10393 and provides practical guidance to suppliers about consumer product recalls and other corrective actions to be taken after a product has left the manufacturing facility.

An amendment enacted in the context of the regulatory reform in Israel in 2021 (and expected to take effect in mid-2022, unless the Ministry of Economy determines that necessary preparations for change have not yet been completed) provides, inter alia, that satisfying an Israeli standard, when the standard is an adoption of an international standard, can be proven by providing certification of compatibility with the international standard from a standards institution that is a member of the International Laboratory Accreditation Cooperation, subject to also satisfying Israeli product labelling requirements and, in the case of electric appliances, compatibility with Israeli electric regulations. The amendment also places an obligation on importers to submit a notice if they find that a product that they import is not in line with applicable standards, including an obligation to undertake and notify of any necessary action to prevent its marketing, including withdrawals. The amendment also empowers the Minister of Economy with authority to waive the applicability of a standard for up to a year if there is a special need and there will be no harm to the public, etc.

ii Product-specific regulation

Certain products are regulated by specific legislation that identifies the regulatory authority responsible for overseeing the safety of those products. Hereinafter are some examples.

Medicinal preparations

Medicinal preparations fall within the responsibility of the Pharmacy Department, a division within the Ministry of Health (MOH). All matters pertaining to medicinal preparations are largely regulated by the Pharmacists Ordinance [New Version] 5741-1981 (PO), as well as corresponding regulations and guidelines issued by the MOH. The recall of medicinal preparations is addressed in the PO, as well as in the Pharmacists Regulations (Preparations) 5746-1986 and Guideline No. 3, published by the MOH and entitled ‘Notification of a Defect in Medicinal Preparations and Raw Active Ingredients’. The issue of pharmacovigilance and safety monitoring is addressed in Guideline No. 6 published by the MOH and entitled ‘Reporting Adverse Events and New Safety Information’.

A comprehensive amendment to the PO, enacted a few years ago, introduced into primary legislation the obligation to immediately notify the Director General of the MOH (DG) of a defect in a preparation. The amendment also lists the steps that the DG is authorised to take in connection with a preparation that is found to be defective, to safeguard public health – for example initiating a product recall and notifying the public thereof by publishing same in the media. It is also prohibited to manufacture, market and use a preparation that was the subject of a decision given by the DG under the aforesaid authority, except in accordance with the DG’s directives in connection with that preparation.

In addition, in respect of a potentially hazardous preparation, an MOH-supervised consumer product or a cosmetic product, the DG is authorised to prohibit the manufacturing or marketing of such a product or preparation or to order its destruction after being convinced that the product is indeed hazardous (subject to giving manufacturers or distributors or registration owners an opportunity to present their arguments in the matter).

Medical devices

Medical devices fall within the responsibility of the Medical Devices Department, a division within the MOH. The Medical Devices Law, 5772-2012 (MDL), which will officially enter into effect when all corresponding regulations are enacted, caters for the regulation of medical devices. The MDL addresses, inter alia, the issue of product recalls and provides that the MOH will publish regulations detailing the registration owner’s duty to notify the MOH of events with safety implications and regulations detailing the manufacturing, marketing and use of unregistered devices or use of same that is not in accordance with the registration.

Cosmetics

Cosmetics fall within the responsibility of the Cosmetics Department, a division within the MOH. As with medicinal preparations, according to the PO, the DG is authorised to take certain steps in connection with potentially hazardous cosmetics. An additional amendment to the PO, enacted a few years ago, aimed at further regulating matters relating to cosmetics, addressed, inter alia, the issue of product withdrawals and recalls, and prescribed steps that should be taken by a dealer³ that discovers that a cosmetics product under its responsibility is harmful. The amendment also granted the DG broad powers in respect of harmful cosmetics, including the authority to impose a product recall, notify the public of the harmful cosmetic product, etc. An additional amendment enacted in the context of the regulatory reform in Israel in 2021 (and expected to take effect in 2023) addresses, inter alia, aspects of parallel importation, certain recognition of regulatory registration made in other countries (subject to certain testing and adding a disclaimer on the product’s labelling in Israel), limitations on attribution of medicinal or healing properties to cosmetics, obligations in respect of record-keeping, changes in recall mechanisms, and the exclusion of (hard) soap bars and perfumes from the definition of ‘cosmetics’ under the PO, etc. The MOH Guidelines for Licensing Cosmetics provide, inter alia, that if a cosmetic product is found to be, among other things, harmful or might be harmful to public health, or is not effective for the purpose for which it was intended, the Pharmacy Department is authorised to prohibit its manufacture, import and marketing. The Department is also authorised to cancel the licence or refuse to renew a licence that is related to the harmful cosmetic product.

The food sector

The food sector falls within the responsibility of the National Food Service, a division within the MOH. The Protection of Public Health (Food) Law, 5776-2015 (FL) regulates the food and nourishment sector. The FL grants the DG broad powers in respect of harmful food products, including the authority to issue directives to food dealers, to impose a product recall, to instruct food dealers to publish details regarding harmful food products and to notify the public of harmful food products, etc. According to the FL, a dealer that discovers or is made aware of the fact that a food product under its responsibility is harmful is obliged to take, as soon as possible, reasonable steps to prevent use of that food product, including, inter alia, withdrawing it from the market, notifying the public thereof, etc. The dealer is also obliged to notify the DG of any steps that it has taken as aforesaid to comply with any directives issued by the DG after receiving such reports and to adhere to record-keeping duties as prescribed by the FL. The DG is also authorised to independently take the necessary steps to protect the public from harmful food products, including, in certain circumstances, notifying the public thereof by publishing same in the media, withdrawing the harmful food product from the market, etc. An amendment to the FL, enacted in the context of the regulatory reform in Israel in 2021 (and expected to take effect in 2023), addresses, inter alia, the adoption of certain EU regulations (in their original language) as directly applicable, a ‘European route’ for importation of certain foodstuff that will apply EU regulations instead of the majority of Israeli regulation (subject, inter alia, to keeping a record of food safety-related documents such as documentation of withdrawals and recalls performed in Europe), a waiver of certain examination requirements for sensitive foodstuff imported via the European route and a lower burden for (charity) food distribution organisations, etc.

Vehicles and transportation-related products

Vehicles and transportation-related products fall within the responsibility of the Ministry of Transport and Road Safety (MOT). The Licensing of Services and Occupations in the Vehicle Field Law, 5776-2016 (VL) provides comprehensive regulation of the vehicle sector. The VL contains provisions facilitating, inter alia, the recall of vehicles and transportation-related products. In respect of vehicles, the VL imposes on local vehicle manufacturers and importers, inter alia, a duty to notify the MOT, vehicle owners, the general public (if instructed by the Director General of the MOT) and the direct (authorised) importer’s service garages of any serial safety malfunction. The direct importers are further obliged to repair in their service garages any such malfunction, without consideration. Certain notification duties are also imposed on parallel and small-scale importers. Under the VL, the Minister of Transport was given the authority to enact regulations governing the recall procedure of vehicles and transportation-related products. Various regulations have been enacted by virtue of the VL, addressing, inter alia, the recall of privately imported vehicles and related notification, publication and reporting duties imposed on vehicle importers; conditions for acquisition of different licences; obligation of vehicle service providers (i.e., manufacturer, importer and trader) to provide their service on demand, indiscriminately, unless there is good reason to refuse service (e.g., the service might harm the vehicle’s safety); and safety standards and requirements for transport-related products. The recall procedure of vehicles is further regulated by Guideline 83, published by the MOT, which sets out the period given to an importer to inform the Licensing Department at the MOT of the recall process, and also imposes sanctions on individual citizens who fail to perform the recall procedure in a timely manner following its publication in the press.