Review your content's performance and reach.

Become your target audience’s go-to resource for today’s hottest topics.

Understand your clients’ strategies and the most pressing issues they are facing.

Keep a step ahead of your key competitors and benchmark against them.

Questions? Please contact [email protected]

Last week, the European Commission published its long-awaited proposal to revise the EU’s Product Liability Directive (85/374/EEC) (PLD).

The PLD establishes a framework for strict liability for defective products across the EU, meaning claimants do not need to establish fault to claim successfully. As a result, it’s the preferred way of making product liability claims in Europe. The revision is a significant development as the PLD dates back to 1985 and has not been amended for over 20 years.

From a practical perspective, the revision matters because it is clearly intended to extend the scope of claims that can be brought, expand the range of damages that can be recovered and make it easier for consumers to prove their case. Alongside other reforms, e.g., upcoming rules on representative actions, we are now looking at the coming to pass of the fundamental shift in the European risk landscape for product manufacturers and suppliers that we have been predicting for a few years now.

Here’s a quick overview of what we consider to be the key proposed reforms:

A 12 month transition period is proposed, with the new rules applying to products placed on the market after that date. In practice this means the new provisions could apply from 2024 – 2025.

The proposed reforms sit alongside parallel policy initiatives – such as upcoming laws on representative actions, proposals on artificial intelligence, circular economy activities and cybersecurity. Together, these reforms are set to significantly change the liability risks for product manufacturers and suppliers. For example, the combination of the removal of the threshold for property damage claims under the PLD and the introduction of new class action mechanisms under the laws on representative actions makes bringing large numbers of small claims a much more attractive prospect for claimant organisations.

The PLD establishes a strict liability (i.e. no fault) regime to enable claimants to seek compensation for defective products across the EU. To claim under the current rules, a claimant does not need to prove fault on the part of the “producer” (normally, the product manufacturer or importer). Instead, they merely need to prove that:

The strict liability regime under the PLD sits alongside fault-based claims for defective products such as tort (i.e. negligence) or breach of contract under the national laws of member states.

The PLD has been virtually unchanged for more than 35 years (with only minor amendments in 1999), and the European Commission has concluded that updates are now needed in order to protect consumers, especially considering new risks and challenges created by connected products, artificial intelligence, and the increasing importance of data security, circular economy activities, as well as e-commerce and other new marketing methods. The Commission published its legislative proposal to revise the PLD on 28 September 2022. Whilst some of the most important aspects of the proposed reforms focus on adapting the liability rules to deal with new technologies, circular economy activities and e-commerce, other reforms will affect all product sectors.

What products are in scope?

All products placed on the market or put into service in the course of a commercial activity. The proposed reforms would expand the scope of what is considered as a “product” to expressly include digital manufacturing files (e.g. for 3D printers), software and AI-systems. Software would be in scope whether embedded in a device or placed on the market as a digital product it its own right and irrespective of the mode of supply and usage (e.g. stored on a device or accessed through cloud technologies). AI-systems would also be within scope. There is also a separate proposal for another liability regime for AI.

Services generally remain out of scope, however certain “related services” will be in scope. These are defined as digital services integrated into, or inter-connected 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. An example given of a related service is continuous supply of traffic data to a navigation system.

The proposed reforms to the PLD are wide-ranging. Headline changes include:

How does this affect me?

The proposed reforms sit alongside parallel policy initiatives involving representative actions, circular economy activities and cybersecurity – together these reforms are set to significantly change the liability risks for all product manufacturers and suppliers who place products on the EU market.

In particular, upcoming EU representative actions laws set to apply from June 2023 that will allow consumer groups to launch class actions need to be kept in mind in the context of the proposed PLD reforms. The new representative action laws represent a major overhaul of the European class actions landscape – introducing mechanisms for group litigation in every one of the EU’s 27 Member States, alongside a new cross-border mechanism for bringing class actions in multiple EU countries at the same time. These new rules are specifically designed to enable groups of consumers, through representative agencies, to bring claims against companies on a large scale. Consumer groups can seek injunctions, damages and/or redress for breach of a wide range of EU laws – in total, 66 pieces of EU legislation covering product liability, alongside consumer rights, product safety, medical devices and more.

When will the new rules apply?

On our calculation, the revised PLD could enter into force around late 2023 – 2024. There is a 12 month transition period – meaning the new rules would apply to claims brought under the updated strict liability framework for products placed on the market after around 2024 – 2025. The current rules would continue to apply to claims for products placed on the market before this date.

In terms of next steps, the draft legislation is undergoing an 8-week feedback period which is open to industry and the public that currently closes on 30 November 2022. However, this date could be extended by a few days over the next week or so (it auto extends one day at a time until the proposal is available in all EU languages) – you can check here. Feedback received during this process is usually summarised by the Commission and presented to the European Council and European Parliament to consider as they review the proposal. Feedback will also be public on the Commission’s webpage for this proposal. The legislative proposal will then make its way through the ordinary legislative process involving the Council and Parliament each separately reviewing the proposal before meeting in trilogue negotiations with the Commission.

As a Directive, member states will be required to transpose the revised PLD into their national rules. Under the current legislative proposal, member states would need to do this within 12 months after the revised laws enter into force.

Where can I find out more?

If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected] .

Council Directive 85/374/EEC - Product Liability Directive

© Copyright 2006 - 2022 Law Business Research