Agreement reached on Product Liability Directive update

A political agreement on a new EU law on liability for defective products has been reached between the European Council and the European Parliament. The Council said the new law will update the current, decades-old, civil liability rulebook in order to make it fit for the digital age and circular economy. Under the new liability directive, the definition of ‘product’ will be extended to digital manufacturing files and software, although free and open-source software that is developed or supplied outside the course of a commercial activity is excluded from the scope of the directive. The EU has decided that online platforms can also be held liable for a defective product, “if they present the product or otherwise enable the transaction for the sale of the product in a way that would lead an average consumer to believe that the product is provided either by the online platform itself or by a trader acting under its authority or control”. And as far as the circular economy is concerned, the new directive stipulates that when a product is modified substantially, outside the original manufacturer’s control, and is made available on the market or put into service again, the company or person that made the substantial modification should be held liable as the manufacturer of the modified product. The Council and Parliament also agreed that any natural person who suffers damage by a defective product is entitled to compensation, with such damages including death or personal injury, including medically recognised damage to psychological health, damage to or destruction of property, as well as destruction or irreversible corruption of data. The right to compensation will cover material losses resulting from the damage as well as non-material losses resulting from the damage, in so far as they are compensable under national law, the directive says. The agreement also provides that when a manufacturer of a product or a component is established outside the EU, the importer of the defective product or component, the authorised representative of the manufacturer or, as a last resort, the fulfilment service provider, can be held liable for damages. The Council said: “One of the directive’s objectives is to ensure that consumers will have a fair chance of getting compensation in complex cases. When a claimant is faced with excessive difficulties, in particular due to the technical or scientific complexity of the case, to prove the defectiveness of the product or the causal link between its effectiveness and the damage, a court may decide that the claimant is only required to prove the likelihood that the product was defective or that its defectiveness is a likely cause of the damage.” BusinessEurope responded to the news by stating that it has “strong reservations about the recent revision of the Product Liability Directive”. BusinessEurope director general Markus J. Beyrer said: “European industry has serious concerns over the revision of the EU Product Liability Directive. The broad scope of this revision aimed at addressing new technologies raises serious concerns among the business community. We recognise the importance of adapting to evolving technological landscapes, but we question the need for an extensive overhaul of a directive that has already been working effectively.” He added: “Despite industry repeatedly voicing their concerns, the co-legislators appear to have ignored some issues that are fundamental for achieving balanced rules. This includes the heightened risk of third-party litigation funding, a reversed burden of proof, and the lack of safeguards on evidence disclosures. As Europe grapples with economic headwinds, we urge co-legislators to reconsider this revision.”

Agreement reached on Product Liability Directive update

Definition of ‘product’ extended and change to burden of proof

Want to read this article?

Read Next

International SOS warns of ‘burnout epidemic’

Strebel to replace Gonzalez as head of Swiss Re China

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Premium increases continue to slow down in US commercial P&C market

International SOS warns of ‘burnout epidemic’

Strebel to replace Gonzalez as head of Swiss Re China

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Premium increases continue to slow down in US commercial P&C market

Want to read this article?

Read Next

International SOS warns of ‘burnout epidemic’

Strebel to replace Gonzalez as head of Swiss Re China

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Premium increases continue to slow down in US commercial P&C market

Related Articles