Essentials – clear and brief

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. The Commission plans to adopt a proposal of the revision on the 28th of September, 2022.

In parallel, the European Commission unveiled in April 2021 its Artificial Intelligence Act (AI Act) which has undergone the scrutiny of both co-legislators, the Council and the European Parliament. In February and March 2022, the European Parliament’s JURI, CULT and ITRE Committees presented their draft reports on the file.

It is for now unclear whether the Product Liability Directive will be revised separately, or if some of it will be absorbed by the upcoming AI Act.

Topics

Representative Actions

One of the main objectives of the European Commission through this proposal is to allow each and every EU citizen to have compensatory collective redress tools at national level.

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Members

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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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Mission

Goals

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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Recent

Latest News

EJF, along with 12 other co-signatories have published our joint business statement supporting the European Parliament Report on Responsible Private Funding of Litigation by MEP Axel Voss.

Third Party Litigation Funding (TPLF) allows private financiers, like investment and hedge funds, to sign confidential deals with lawyers or qualified entities to fund lawsuits and arbitration in exchange for a cut of any settlement or judgment/award. TPLF is an estimated €40 to €80 billion market globally. There are more than 100 litigation funders operating in Europe, yet TPLF is largely unregulated in the EU, unlike other financial and legal commercial activities.

In our letter, EJF, together with organisations such as Airlines for Europe (A4E), BusinessEurope, DigitalEurope, European Banking Federation, InsuranceEurope, MedTech Europe and U.S. Chamber Institute for Legal Reform, explain our concerns with this practice. Although the EU Directive on Representative Actions provided for some rudimentary rules around transparency of funders, these rules will only apply to collective actions brought under this one Directive, and not to any other type of claim or law outside the Directive’s scope, including, in particular, those brought via the claims assignment models being operated in various EU Member States.

We are therefore supportive of the European Parliament’s legislative own-initiative report on responsible private funding of litigation, which calls on the European Commission to propose sensible safeguards for effective oversight of TPLF.