Product Liability & Safety 2024 Comparisons

The following chapter featured in Product Liability & Safety 2023 and is awaiting update from the firm.

• Political Constitution of the United Mexican States (Constitución Política de los Estados Unidos Mexicanos or CPEUM): Mexico’s fundamental law, article 4 of which regulates the right to health while article 28 establishes consumer protection as a human right, among other matters.
• Commercial Code (Código de Comercio): Federal law that regulates acts of commerce.
• Federal Civil Code (Código Civil Federal or CCF) and State Civil Codes (Códigos Civiles Estatales or CCEs): Federal and State laws that regulate civil liabilities, among other things.
• Federal Consumer Protection Law (Ley Federal de Protección al Consumido or LFPC): Federal law that regulates consumer relations, as well as the rights and obligations between consumers and suppliers.
• Regulations of the Federal Consumer Protection Law (Reglamento de la Ley Federal de Protección al Consumidor or RLFPC): Legislation that establishes more detailed provisions of the Federal Consumer Protection Law.
• General Health Law (Ley General de Salud or LGS): Federal law that regulates the protection of the right to health, promoting access to health services, regulation of supplies, products, services, sanitary control in establishments, among other aspects.
• Regulation of Sanitary Control of Products and Services (Reglamento de Control Sanitario de Productos y Servicios or RCSPS): legislation that regulates the import and export process, as well as the services and establishments of various products.
• Mexican Official Standards (Norma Oficial Mexicana or NOMS): regulations whose purpose is to provide greater technical depth to the provisions established in laws and regulations, depending on the type and category of product.

• The Ministry of Economy (Secretaría de Economía or SE) is responsible for formulating and conducting the country’s general policies on industry, foreign trade, domestic trade, supply and prices, as well as regulating, promoting and overseeing the marketing, distribution and consumption of goods and services, including the development of the consumer protection policy, which is one of the social and economic instruments for promoting the interests and rights of consumers.
• The Ministry of Health (Secretaría de Salud or SS) is responsible for formulating and conducting national policy on social security, medical services, universal free medical services and general health, as well as coordinating health authorities at all levels (federal, state and municipal), including the development of programmes and legal provisions on health matters.
• The Federal Consumer Protection Agency (Procuraduría Federal del Consumidor or PROFECO) is a decentralised social service federal agency in charge of promoting and protecting the rights and interests of consumers and ensuring fairness and legal certainty in the relations between suppliers and consumers.
• The Federal Commission for the Protection against Sanitary Risks (Comisión Federal para la Protección contra Riesgos Sanitarios or COFEPRIS) is an autonomous administrative body of the Ministry of Health, which is in charge of the regulation, control and promotion of sanitary matters, including the evaluation and regulation of health risks due to the use or consumption of goods and services.
• The General Directorate of Standards (Dirección General de Normas or DGN) is a directorate of the Ministry of Economy in charge of developing, promoting and disseminating public policies and strategies on metrology, standardisation and evaluation of industry and commerce, including the development of Mexican Official Standards.

In matters pertaining to consumer protection, the LFPC and RLFPC set forth various corrective measures that can serve either as precautionary steps or definitive penalties, depending on the specific circumstances:

• halting the movement, sale, or distribution of packaging, goods, products and transportation;
• securing or seizing goods and products;
• suspending the commercialisation of goods, products or services;
• placing seals and warning information;
• ordering information or advertising to cease;
• ordering the supplier to insert in the advertising or information the claim that the truthfulness of the advertising or information has not been verified by the competent authority;
• issuing warnings to consumers and informing other authorities about defective or harmful products that pose a risk to life, health and safety of consumers, and recalling products that exhibit defects or damage that warrant rectification, repair, or replacement;
• fully or partially closing establishments;
• banning the commercialisation of goods or services that have been previously suspended; destroying such goods if it is determined that the conditioning, reprocessing or substitution thereof is impossible; and
• banning the sale of goods or services that have been previously suspended; destroying such goods if it is determined that the conditioning, reprocessing or substitution thereof is impossible.

Pursuant to article 25 Bis of the LFPC, suppliers are required to immediately inform the authorities if they determine that any of their products may pose risks to the life or health of consumers.

In this regard, the RLFPC considers that goods, products, or services are considered harmful or potentially harmful to life if their consumption directly threatens or could threaten life, endangers the normal functioning of the human body, either because of its dangerous characteristics such as being corrosive, reactive, explosive, toxic, flammable, radioactive, or biologically infectious, or because it utilises mechanisms, instruments, or devices that are inherently dangerous due to their speed, energy transmission, or other similar reasons.

In terms of consumer protection, there is no particular timeframe established for reporting a harmful product or service, but the general obligation stipulates immediate reporting, which is considered to be a maximum of three days from when the supplier becomes aware of the hazardous product or service. With respect to pharmaceutical products, according to the Mexican Official Standard “NOM 220-SSA1-2016”, holders of a sanitary registration have a maximum of seven calendar days to report a serious adverse event, and a 48-hour window for reporting two or more serious cases associated with the same drug and batch.

With regard to consumer protection, there are no procedures to inform PROFECO about a harmful product or service other than demonstrating legal representation of the company by means of a power of attorney and a certified copy of the bylaws of the supplier. In case of pharmacovigilance reports, the holder of the sanitary registration must follow a specific procedure stipulated by the National Centre for Pharmacovigilance.

The LFPC and the RLFPC stipulate the following penalties for infringing consumer protection provisions:

• fines ranging from MXN 336.05 to MXN 3,776,174.62, which can be doubled in cases of repeat offenses;
• in particularly serious cases, PROFECO may impose a complete or partial shutdown on the supplier for up to 90 days, and a fine ranging from MXN201,633.64 to MXN 5,645,741.68; and
• a ban on the commercialisation of products or services, and the destruction thereof where the commercialisation of any product or service has been suspended and it is determined that its conditioning, reprocessing, repair, or replacement is impossible.

In sanitary matters, the following sanctions may be imposed:

• sanitary safety measures, such as the suspension of health advertising messages, the seizure and destruction of products, among others; and
• administrative sanctions, such as warnings, temporary or permanent closure, either partial or total, arrest for up to 36 hours and fines that may range from MXN200,000.00 to MXN2,000,000.00, which may be doubled in case of repeat offences.

Under the provisions of the LFPC and RLFPC, in the event of a product liability issue, affected consumers can lodge a claim against the seller, manufacturer, or importer of the product, either by filing a complaint to PROFECO, a civil lawsuit, or a class action lawsuit if there is widespread impact. This process does not prejudice PROFECO’s powers to monitor and verify compliance.

In Mexico, product liability is not governed by specific legislation but falls under the broader scope of civil liability laws and the principles governing consumer-supplier relationships.

Per the LFPC, consumers may demand either restitution of a product or service, contract rescission, or a price reduction. Additionally, they are entitled to a compensation of at least 20% of the price paid when the product or contract item has hidden defects that render it unfit for its intended use, degrade its quality or usability, or compromise the safety that is normally expected of it. When the consumer opts for contract rescission, the supplier is obligated to refund the price paid and, if applicable, the interest on it according to the Average Percentage Cost of Collection.

Moreover, consumers can opt for either product replacement or refund of the amount paid upon returning the purchased product. They are also entitled to compensation of no less than 20% of the price paid when the product does not match the quality, brand, specifications, and other substantial elements as advertised, or fails to comply with Mexican official standards.

According to the Federal Civil Code, product liability arises from the principle of strict civil liability or the theory of created risk. This applies when a product is inherently dangerous, due, for example, to its speed, explosive or flammable nature, or electrical current conductivity. The supplier is required to compensate for any resulting damage unless it can be proven that the damage resulted from the victim’s fault or negligence. The remedy for the damage, at the discretion of the injured party, may involve either the restoration of the previous situation, if feasible, or compensation in the form of damages and lost profits.

To make a product liability claim, the affected party must demonstrate:

• the use of the harmful product;
• the damage caused by the use of the harmful product;
• a causal link between the use and the damage; and
• the absence of fault or negligence on the part of the victim.

In addition, the affected party must prove the damage incurred – ie, the harm to their property, as well as the loss of profits, understood as the foregone earnings that could have been obtained, in both cases attributable to the product liability.

In the event of product liability, the affected party may file the relevant claim against either the seller, the manufacturer or the importer of the product, in their own right or through a representative.

The statute of limitations for product liability actions are as follows:

• Claims and administrative proceedings processed by PROFECO and brought by consumers against a supplier for product liability have a limitation period of one year.
• Civil judicial actions brought by consumers against suppliers must be file within two years from the date on which the damage occurred.
• If product liability is claimed through a class action, the statute of limitations is three years and six months as of the date on which the damage occurred.

Under federal procedural law, the general rule of jurisdiction dictates that the court with jurisdiction over a product liability claim will be the one located where the defendant supplier is domiciled, even in the case of class actions.

It is not necessary to file any administrative or judicial pre-action to file a product liability action. However, consumers normally demand that suppliers pay the liability, as well as initiate conciliation procedures with PROFECO. This is done with the aim of settling the matter efficiently, or to obtain an initial response from the supplier and additional information, which could assist in preparing a potential lawsuit.

Furthermore, if it becomes crucial to maintain the current state of a product, object, or situation – especially when the favourable resolution of the action hinges on its preservation – the consumer or supplier has the option to initiate pre-trial procedures to prepare principal actions and precautionary measures.

There is no specific regulation for the preservation of information and other evidence in product liability cases. The general rule is that every supplier is obliged to preserve the books, records and documents of its business for at least ten years, which includes information or documentation related to product liability cases.

If the information is concealed or destroyed, procedural law allows for the drawing of negative inferences due to the failure to produce such information or documentation during a trial. This primarily involves accepting as true the facts that are sought to be proven with the missing evidence. Additionally, there is the possibility of criminal prosecution for concealing or destroying the information or documentation.

Mexican procedural law does not provide for discovery, so parties must present evidence in their possession when filing a lawsuit or a response. If the relevant information or documents are held by the opposing party or a third party, the court must be notified so that it may order the corresponding exhibition measures. Also, the court can draw negative inferences if the said documents or information are not produced.

A product liability trial can be prepared through a pre-trial procedure in the event of:

• a witness examination being required to prove any component of the action or defence; or
• an expert test or judicial inspection on the product’s condition or any circumstances that might predict potential rights infringement or the necessity to safeguard those rights.

There is no specific regulation for the presentation of expert evidence in product liability cases.

The general rule for the production of expert evidence is that any party may offer such evidence to prove the basis of its cause of action or defence. Regardless of which party offers the expert evidence, both parties may designate their expert, so that both experts may issue their opinions in writing. If the experts’ opinions conflict, the court will appoint an independent third expert to produce their opinion. The parties may question the experts on their opinions during a hearing, mainly in oral trials. The court then undertakes an evaluation of these expert opinions based on logical reasoning and past experience. The primary focus is on analysing the considerations underpinning each opinion. The court maintains its discretion and is not obligated to assign higher evidentiary weight to opinions that show agreement.

Under procedural law, parties are required to substantiate their claims; the plaintiff needs to demonstrate the elements of their case, while the defendant is responsible for evidencing their defence.

However, according to the rules of dynamic burden of proof, which apply to disputes between consumers and suppliers, and a recent judicial criterion of the Supreme Court of Justice of the Nation on hidden defects (which may not be applicable to all product liability cases), the onus may be on the defendant, typically the supplier, to prove the absence of damage caused by the product. This is primarily because it often has greater access to technical evidence.

Due to concurrent jurisdiction rules, product liability cases may be brought before federal or state civil courts. Since the Mexican legal system does not contemplate trial by jury, the judges must conduct and resolve the trials.

In Mexico, damage awards are typically direct and depend on the actual harm caused to the affected party’s assets and expected loss of profit. However, in instances of physical injury to the consumer or egregious negligence by the supplier, the affected consumer might be eligible to claim non-pecuniary and punitive damages. The quantification of these damages falls within the judge’s discretion, considering case-specific circumstances. Some precedents have seen these damages valued up to MXN30 million.

Concerning conciliation proceedings between consumers and suppliers, including those related to product liability, PROFECO may impose sanctions on suppliers that violate consumer protection provisions. Suppliers can challenge such resolutions in a contentious-administrative trial before the Federal Court of Administrative Justice, a process which can take up to a year. The final judgment issued by the Federal Court of Administrative Justice can further be contested through an amparo proceeding (a constitutional proceeding).

In addition, PROFECO can mandate a supplier to compensate the consumer for violation of consumer protection provisions. This enables the consumer to claim this amount in a civil court.

Regarding judicial trials, depending on the amount claimed and the type of action, appeals may be available. The appeal may be processed and resolved by a court of appeal composed of a panel of three magistrates. After the final judgment issued by the court of appeal, both parties may challenge such judgment through an amparo proceeding (a constitutional proceeding), which is processed and resolved by federal collegiate tribunals composed of three magistrates or, in some cases, by Mexico’s Supreme Court of Justice. Oral trials, however, do not allow for appeals, and final judgments can only be contested through an amparo proceeding.

Under Mexican law, the most common defences in product liability cases are:

• denying the existence of any defects or conditions in the product that could potentially cause harm;
• arguing that any existing defects are not the result of product design or manufacture, but stem from external factors not attributable to the seller, manufacturer, or importer;
• asserting that the alleged defect did not exist when the product was purchased;
• claiming that the victim’s gross negligence contributed to the harm;
• contesting any unlawful action attributed to the seller, manufacturer, or importer of the product; or
• arguing that the harm incurred was not directly or immediately caused by the product’s use.

Depending on the nature of the product, defences are normally proven in proceedings before PROFECO through laboratory analysis of product samples, inspections of the product, as well as the exhibition of authorisations or certificates of compliance of the product with NOMS. In civil lawsuits, these defences are often supported through expert evidence.

Compliance with regulatory standards plays a crucial role in shaping the attitudes of administrative and judicial authorities when examining a product liability case. If a product aligns with the applicable regulations at the time the harm was inflicted, it could potentially absolve the seller, manufacturer, or importer of liability, depending on the specifics of the case.

There is no specific protocol for the payment of legal costs in product liability cases. Since PROFECO is the government authority tasked with consumers rights protection, no costs are associated with proceedings before this entity.

In court trials, the general rule is that the losing party indemnifies the other party for all judicial costs incurred, including attorneys’ fees, when it has filed frivolous or improper defences or appeals for the purpose of delaying proceedings. Additionally, a party can be ordered to pay judicial costs when it:

• acts with recklessness or bad faith in the process;
• does not offer evidence to prove the cause of action or defences;
• exhibits false documentation;
• is sentenced in identical first and second instance judgments; and
• pursues improper judicial actions, defences, appeals or ancillary proceedings.

In class actions, judicial costs only apply to the defendant, never the class.

In Mexico, there is currently no regulation for third-party funding of cases, so any type of remuneration agreement may be established; however, banking regulations establish very strict requirements regarding credit risk, which prevents banks from participating in this type of transaction.

Therefore, it is usually foreign funds that enter into litigation financing transactions in Mexico.

Following various jurisprudential criteria of the Supreme Court of Justice of the Nation and a constitutional amendment of July 2010, in August 2011 a chapter was added to the Federal Civil Procedure Code to include and regulate class actions, protecting protect diffuse and collective rights and interests, as well as individual rights of collective incidence.

Class actions apply to a range of situations including:

• relations between consumers and suppliers;
• users of financial services;
• public services;
• damages derived from undue concentrations or monopolistic practices;
• environmental damages; and
• civil liability.

Under the CFPC, class actions can only be brought by:

• authorities such as PROFECO, the Federal Antitrust Commission, the National Commission for the Protection and Defence of Financial Users, the Federal Attorney’s Office for Environmental Protection and the Federal Attorney’s General Office;
• the common representative of a class formed by at least 30 members; and
• non-profit civil associations.

The main requirements for a class action are:

• it must involve acts that harm consumers or users of public or private goods or services or the environment, or it must involve acts that have harmed the consumer due to the existence of undue concentrations or monopolistic practices;
• it must involve matters common in fact or in law among the members of the class;
• there are at least 30 members;
• there is a connection between the subject matter of the action and the harm suffered;
• the subject matter of the litigation has not been subject to res judicata in previous proceedings; and
• the action is not time-barred.

Although the inclusion of class actions in the Mexican legal system has not led to the filing of many actions of this type, there are cases of class actions filed in relation to conflicts between suppliers and consumers, as well as in civil liability cases, including product liability matters, mainly in the automotive sector.

As mentioned in 2.9 Burden of Proof in Product Liability Cases, the Supreme Court of Justice of the Nation resolved a case that gave rise to the new criterion of burden of proof for the ascertainment of hidden defects in consumer protection matters. This case involved a plaintiff seeking the rescission of a vehicle purchase contract due to mechanical failures and concealed defects. Given the consumer’s knowledge disadvantage compared to the suppliers, a request was made to reverse the burden of proof, obligating the suppliers to prove the absence of hidden defects.

The Supreme Court determined that the consumer needs to provide only minimum evidence indicating the nature of these defects, which then establishes a presumption in their favour. This decision was based on the favor debilis principle, interpreted from Article 28 of the Constitution, which aims to balance the asymmetrical power dynamic between suppliers and consumers. Therefore, if the consumer presents minimal evidence indicating the possibility of hidden defects, a presumption is established in their favour. The burden of proof is consequently shifted to the supplier, who must refute this presumption, thus balancing the unequal relationship between supplier and consumer.

In the last 12 months there have been no significant changes in the regulation of product liability in Mexico, only the new judicial criterion issued by the Supreme Court of Justice of the Nation on the reversal of evidentiary burdens in conflicts between consumers and suppliers in which the existence of a hidden defect is claimed.

During the pandemic, there was an increase in the filing of class actions by various non-profit organisations, which led to the issuance of relevant judicial criteria on class actions and consumer protection, mainly regarding the right to bring such actions.

In October 2022, based on the judicial criteria issued by the Supreme Court of Justice of the Nation, the Legislative Group of the Institutional Revolutionary Party (Partido Revolucionario Institucional) in the Congress of the State of Nuevo León, through congressman Heriberto Treviño Cantú, announced a bill to amend the Federal Consumer Protection Law, so that consumers are not the ones who have to prove the errors or defects of origin of a product, but rather it is the suppliers who must prove the non-existence of hidden defects