Essentials – clear and brief

Ethical Business Practice & Regulation

Ethical Business Practice & Regulation (EBP&R) is a new code for business conduct, drawing on behavioural science, responsive regulation, safety in business and integrity management. The idea is to set ethical standards for business which minimize the problems giving rise to mass claims of the sort encountered in the last 30 years.

The drivers for this new approach are the increasingly regulated environments in which 21st century businesses operate, the challenges of big data management and its control, cases of preventable, systemic or systematic or blatant business errors, and in the context of all those, the risk management issues which flow from ever increasing consumer expectations and greatly increased litigiousness.

The overarching goal of EBP&R is an effective relationship between business and regulators, resulting in better outcomes for both whilst reducing risk exposure to mass claims. Some examples of EBP&R include open culture in civil aviation safety, feedback mechanisms provided by market vigilance systems and sectoral ombudsmen.


The operating world for business is increasingly characterized by volatility, uncertainty, complexity and ambiguity. The main drivers are digitalization and automation, increasing connectivity and globalization as well as changing societal values including new ways of mobilizing people. This changing environment results in more and more grey areas in the consumer interface and in the regulatory environment. EBP&R encourages leaders and employees to create an effective ethical culture where they do the right thing, based upon ethical values and supported by cultural norms and institutions.

EBP&R requires people to recognise ethical dilemmas, to challenge constructively, to speak up if they know or suspect unethical behaviour, and to use mistakes and wrongdoing as an opportunity to learn and improve. For organisations, EBP&R is also an opportunity to be open and to engage with regulators.


The current interface between businesses and regulators can encourage an open learning culture but whilst a lot of the groundwork is known, it is untrusted. This will call into focus the improvements of self-governance and co-regulation, a fundamental factor to allow businesses and organisations to keep their freedom to innovate and operate based on ethical principles.

Where do we stand

In 2017, the OECD published a comprehensive compilation applying behavioural insights (over 120 examples in 23 countries), which noted that governments are searching for more simple and effective regulatory solutions without resorting to additional rules or sanctions. Overall, the OECD recommendations on regulation were favouring a responsive regulation approach, advocating taking into consideration behavioural insights early in the design of policy.


Product Liability

Adopted in 1985, the directive 85/374/EEC on liability for defective products aims to “ensure that producers take responsibility for defective products vis-à-vis consumers”.

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Join EJF

Our services are based on three main pillars: policy and legal intelligence, research and academic input, and communication of key messages.

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EJF’s goal is to ensure that the Directive on Representative Actions will build a coherent and harmonized civil redress system architecture in Europe.

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Latest News

Europe is at a cross-roads for product liability rules. Following the proposal on a New Product Liability Directive, EJF and other European organizations urge policymakers, in a joint statement, to consider key issues such as protection against malicious mass-claims and new rules on burden of proof, to ensure a balanced and effective product liability regime that benefits both businesses and consumers. The proposed revision of the PLD, as it stands, would introduce radical changes in the EU legal landscape and it may indeed have unintended consequences for Europe's competitiveness and national justice systems. PLD could signal another move towards a litigation culture in the EU that serves primarily the economic interests of private third-party funders as well as placing an extra burden on already-stretched national court systems and state resources. Let's work together to protect European competitiveness and consumer rights via fair, effective and efficient civil rights systems in the EU.

Read more in our Joint Statement below.


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