Replacing Directive 85/374/EEC
In 1985 the European Union adopted the first Product Liability Directive (85/374/EEC), allowing consumers harmed by dangerous or unsafe products to claim compensation from the producers, if they can show that:-
- The Product was Defective, – failing to provide the level of safety that consumers are entitled to expect, considering all the circumstances.
- The consumers has suffered an actual harm– including physical injury or damage to personal property, but excluding pure economic or commercial losses.
- The Defect or lack of safety caused their loss or injury
Directive 85/374/ EEC also introduced the principles of:-
- Strict Liability for Product Defects, so that claimants do not need to show the producer was negligent or knew about the lack of safety.
- Joint Liability – making brand owners, manufacturers and their component suppliers jointly responsible for any harm to consumers caused by defects or the lack of safety, allowing consumers to take action against any or all of them.
To ensure that claims can be pursued and settled in a European Court, Importers and the Authorized Representatives of foreign manufacturers are also held liable, as producers, for any defective products they supply in Europe. However, other distributors and retailers, who have not modified the product or used their branding to sell the product, can normally avoid liability for product defects by identifying their European supplier who is liable.
However, the producer’s liability for defects is not an absolute liability. So the Directive 85/374/EEC established the arguments that may be deployed to avoid the producer’s liability, when a defective product has caused loss or injury:-
- We were not a Producer of the defective product or any of it’s component parts, and have not applied our branding to the the product supplied.
- The defect did not exist when the product was supplied, but has been introduced or created by some unauthorized change or damage after the product left our control.
- The defect, or lack of safety, could not have been detected, when the product was supplied due to the limits of scientific and technical knowledge at that time. (Known as the development risk defense, this argument may be limited or excluded by the national law of member states, for some or all products)
- The defect or lack of safety is not in the component we supplied, but due to the design and production of the product in which it was integrated.
- The defect or lack of safety in the component we supplied, is the result of following the instructions given by our client who is also a producer. (This defense protects companies who ‘make to drawing’ from any liabilities that might arise due to poor design, providing they followed their client’s instructions.)
- The defect was the inevitable result of compliance with a legal requirement. Although we may find conflicting legal requirements in different regulations, so far I have been unable to find any case studies to illustrate this argument.
Although primary (unprocessed) agricultural products were excluded from the scope of the original directive, this was amended by Directive 1999/34/EC. So, the Directive 85/374/EEC now applies to electricity and all physical products or component parts that are moveable, even when they are incorporated in an immovable object or structure.
Since 1985, our traditional supply chains have been transformed by globalization and the development of on-line sales channels, while public expectations of safety and the risk profile of products have changed as new technology is developed and adopted.
So, the European Union had introduced a new Product Liability Directive (EU) 2024/2853
When will the New Product Liability Directive be published?
The new Product Liability Directive (EU) 2024/2855, was published in the Official Journal of European Union on 18 November 2024
When will the Product Liability Directive come into force?
The new Directive came into force 8 December 2024, 20 days after it was published in the Official Journal of European Union.
When will the New Product Liability Directive take effect?
The New Product Liability Directive (EU) 2024/2855 will apply to all products supplied in the European Union on or after 9 December 2026.
The old Product Liability Directive 85/374/EEC will continue to apply to any claims related to products that are supplied before the New Directive takes effect.
Why have the EU adopted a New Product Liability Directive?
The Recitals or Preamble at the front of the Directive, paragraphs 1 – 64, explain the purpose of the new legislation and its Legal Intent. So, the Courts will interpret the law to achieve the purpose as explained in those Recitals.
However, the new Directive addresses the following concerns:-
- The introduction of new technology, in particular Software and Machine Leaning, into products that may be interconnected has changed the risk profile of typical products. So, the new Directive defines software as a product, and component part of any product in which it is integrated.
- Many products interact with and may be controlled by Software Applications and Services that may modify the products behavior or risk profile. So, these are now defined as Related Service and fall within the scope of the new Directive.
- Software vendors and Service Providers may be responsible for product defects that harm consumers. So, they are now considered to be ‘manufacturers’ or ‘component suppliers’, jointly liable for any lack of safety they introduce into products that rely on their ‘digital components’ or services.
- The characteristics and risk profile of products may be changed after they have been put into service, by software updates or physical modifications. So, the new Directive makes a manufacturer who approves or authorizes changes to products already in service, liable for any defects or lack of safety that may be introduced by the change.
- Independent operators may make unauthorized changes or updates to products already in service, changing their risk profile or introducing new risks to users. So, such modifications are regarded as ‘new products’ manufactured by the economic operator who made the change.
- As the ‘circular economy develops’ an increasing number of products and components may be repurposed at the ‘end of life’, and incorporated in new products. So, the Directive says that products that have undergone ‘substantial modification’ or been adapted for a use that is outside the scope of original manufacturer’s risk assessment, will be regarded as new products made by the company that modified them.
- The scope of the Directive now includes all products that have been supplied, or put into service, within the Single Market, including those are put into service by the manufacturer for their own use.
- The definition of defect, – a failure to achieve the level of safety people are entitled to expect, – has not changed, but their is a new presumption that products that don’t comply with Union Law (CE marking / type approval etc) or the National Law of a Member State are Defective.
- The potential harms that create a ‘recoverable loss’, have been extended to include psychological trauma, and the loss or corruption of data that is not held for ‘commercial purposes’, in addition to death, physical injury and material damage to private property.
- People making claims for compensation must still prove that the product was defective, they have suffered an actual loss, and that the defect caused their loss. But, as the claimant may need access to information held by the producers to make their case-
- The the Directive introduces the ‘Rights of Discovery’ and an obligation to disclose relevant information, for both claimants and defendants. (This is already recognized in UK law, but will now become mandatory throughout the EU Single market)
- The Courts may also presume the product was defective and unsafe when:-
- The defendants withhold the evidence required to assess it’s safety or identify a defect.
- The product does not comply with the requirements of EU or National Law that are intended to reduce the risk of the harm suffered by the claimant.
- The claimant demonstrates that the damage was caused by an obvious malfunction of the product during reasonable foreseeable use or misuse.
- If due technical complexity, technical knowledge, or a lack of data create excessive difficulties for claimants trying to prove the existence of a defect.
- The causal link between the proven defect and harm caused may also be presumed when
- The damage caused is of kind that is typically caused by the defect in question.
- Where the Court has presumed that the product is defective, or the defect caused the damage, the burden proof is reversed, so the manufacturer must prove that the product was not defective and did not cause the damage.
Other changes in the new Directive may enable and encourage groups of consumers with similar complaints to bring claims using Group Litigation or Representative Actions, while the EU will establish a public database of Product Liability Judgements.
While new Product Liability Directive (EU) 2024/2853 and General Product Safety Regulation (EU) 2023/988 will apply to all products supplied within the EU single market – including Northern Ireland, the UK Government have not explained how they plan to update UK legislation following Brexit.
Your next steps….
The new Product Liability Directive EU 2024/2853 and recently adopted General Product Safety Regulation EU 2023/988 are major reforms of consumer right and product regulation. Designed to improve consumer protection. they create new obligations and legal risks for economic operators in the extended supply chain. So, you and your management team, need to understand the law and how it will change your supply chain relationships .
Although some of the most obvious impacts involve software vendors and companies providing Related Services, these changes will affect everybody supplying products in the European Single Market.
So, if you need help, our Product Liability Training – designed for engineering managers – has been updated to reflect the recent changes in European law. Why not give us a call?
