European Tech Regulation

The Product Liability Directive

The European Union (EU) has a claimant-friendly ‘strict liability’ regime for product liability claims, established under the Product Liability Directive (PLD) (85/374/EEC). Producers are responsible for defects under the PLD, regardless of whether it’s their fault. Claimants just need to show that:

  • A product was defective.
  • They suffered damage.
  • There was a causal link between the defect in the product and the damage they suffered.

It also is possible to bring claims under fault-based regimes (e.g., in negligence), but PLD claims are usually preferred as liability is strict.

In 2022, the European Commission published a legislative proposal to revise the PLD. These are the first reforms in nearly four decades and will significantly change the EU’s product liability landscape.

Affected businesses

  • Product manufacturers, importers and authorised representatives
  • Fulfilment service providers and online marketplaces

Key impacts

In short, the proposed revisions will create an even more claimant-friendly product liability regime in the EU, allowing more claims and a greater range of damages, as well as lowering the burden of proof so consumers can succeed more easily.

In more detail, the revisions will:

  • Expand the definition of a ‘product’, which under the current PLD only covers hardware, to add:
    • Software (both embedded and stand-alone software, with limited exceptions) including artificial intelligence (AI) systems.
    • Digital manufacturing files.
    • Certain ‘related services’, defined as digital services integrated into, or interconnected with, a product in such a way that the absence of the service would prevent the product from performing one or more of its functions.
  • Create liability for a wider range of defects – including issues with software updates (or lack of updates), AI and cybersecurity risks.
  • Expand the range of recoverable damages to include:
    • Medically recognised damage to psychological health.
    • Destruction or corruption of data (not used for professional purposes).
  • Lower the burden of proof for the claimant – including by establishing a presumption of defect in certain circumstances, such as:
    • In scientific or technically complex cases, where it could be difficult for the claimant to prove liability (with examples of AI or medical devices given).
    • Where a product does not comply with mandatory product safety requirements under EU or national laws intended to protect against the risk of damage suffered by the injured person.
    • In the case of an ‘obvious malfunction’.
  • Expand the range of defendants, with new liability for:
    • Authorised representatives where there is no manufacturer established in the EU.
    • Fulfilment service providers where there is no manufacturer, importer or authorised representative established in the EU. An online marketplace may be held strictly liable if it fails to identify who supplied it with the product within one month upon request in certain cases.
  • Establish new powers to order discovery of documents at an early stage in proceedings, which is a significant procedural change as discovery is currently not available in all Member States.
  • Extend the long-stop period where symptoms are slow to emerge from 10 years to 25 years.

Enforcement

Enforcement is carried out by consumers who bring claims under the PLD. The PLD is in scope of the EU’s new class action laws – established under the Representative Actions Directive (EU) 2020/1828) – which will make it possible to bring large collections of product liability claims on behalf of consumers across the EU.

Key timings

Unknown at this stage.

It is estimated that the legislation may be passed in Q3/Q4 2024 with the rules applying in Q3/Q4 2026. However, this is still in negotiation

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