Product Liability

The Product Liability Directive 85/374/EEC applies to any product marketed in the European Economic Area (EU, Iceland, Liechtenstein and Norway) and establishes an EU-wide regime under which the producer is liable if a product is defective and causes injury or damage to consumers.

Why

In its latest yearly report (May 2018) on the application of the Directive, the European Commission concluded “the Product Liability Directive continues to be an adequate tool.” However, it also acknowledged that the Directive is not perfect and that given the ubiquity of digital products and services now available to consumers or forming part of the supply chain, “its effectiveness is hampered by concepts, such as ‘product’, ‘producer’, ‘defect’ or ‘damage’, that could be more effective in practice.”

Technological revolution affecting consumer products, exponential developments in hardware and software engineering, the rapid take-up of digital marketing, the Internet of Things, artificial intelligence, robotics and cybersecurity inter alia, require the concepts on which the Directive was drafted to be re-evaluated.

How

The European Commission has set up an Expert Group to investigate these issues, which is working in two sub-groups:

• The 'product liability formation' to provide expertise and assistance to the Commission in drawing up guidance on the Directive;
• The 'new technologies formation' to assess the implications of emerging digital technologies for the wider liability frameworks at EU and national level.

Where do we stand

The European Commission conducted a first consultation in July 2021 and gathered feedback regarding its roadmap on the revision of the Product Liability Directive. It opened a second targeted public consultation in October 2021. EJF contributed to both those consultations.

In September 2022, the European Commission published a proposal for revising the Product Liability Directive. The proposal aims at modernising the existing EU harmonized regime on no fault-based liability for manufacturers of defective products and allow national courts to presume key elements of a claim for damages in a wide range of circumstances, leading to a de facto reversal of the burden of proof.

The Draft Report of the European Parliament's co-rapporteurs Vlad Botos (RO, Renew Europe, IMCO committee) and Pascal Arimont (BE, EPP, JURI committee) will be voted in Plenary on 10th July 2023.

The Council adopted its negotiating mandate in June 2023 while the European Parliament confirmed its negotiating position in October 2023. A political agreement was reached on 14 December 2023 in the framework of trilogue negotiations, with a view to finalise the legislative proposal before the European Parliament elections in June 2024.

The agreed text will have to undergo review by the European Parliament (initially in committees and then in a plenary session) and the Council for formal approval. Considering this context, the text must be voted on latest during the Plenary session scheduled for 11-14 March, 2024.

Key takeaways from current political agreement:

• Extended scope of application
• Economic operators liable
• Simplified proof of defectiveness and causation
• Broader recoverable damages
• Longer expiry period