European business faces further liability with new product safety rules

The EC has formally published the new General Product Safety Regulation (GPSR), which reforms a variety of product safety rules for manufacturers doing business in the EU. The European Parliament adopted the text of the regulation in March and the European Council adopted it on 25 April. The official publication on 23 May triggers the implementation and enforcement deadlines. Law firm Faegre Drinker explained in a note that the regulation takes effect on 12 June and will include an 18-month transitionary period for EU member states, companies subject to the regulation and “other actors” to implement the revised rules. Full enforcement begins on 13 December 2024. “The regulations have been under consideration for many years and represent a major overhaul of product safety regulation in Europe. Product manufacturers should review the full set of regulations carefully and make any necessary adjustments to their procedures and processes to be in compliance with the new regulations before full enforcement takes effect,” said the law firm. “Among other things, the GPSR includes new requirements related to adverse event reporting, pre-market risk assessments, safety recalls, and product labelling and documentation,” it added. Manufacturers will be required, for example, to report “accidents caused by a product… without delay” if it is involved in an incident resulting in death or “serious adverse effects on health and safety”. Operators of online marketplaces are subject to what Faegre Drinker describes as an even more broadly worded requirement to report “accidents caused by a product… resulting in serious risk or actual damage of the health or safety of a consumer”. It said this extends reporting requirements beyond incidents of actual injury. Rival law firm Baker Mackenzie pointed out that the revised rules will not leave much wriggle room at national level. “As a regulation, this legislation will be directly applicable, leaving little room for disparities across EU countries. The regulation is relevant for any economic operator that is in any way involved in the sale of products onto the EU market; even those who are not themselves established within the EU will need to comply with the new rules,” it explained. Faegre Drinker said that the EU’s new GPSR represents another regulatory and legislative change in the EU that manufacturers and other companies doing business in Europe must understand and comply with going forward. These include the EU’s Collective Redress Directive, which begins full enforcement on 25 June this year and provides new pathways for legal redress for consumers, including greater availability of class actions. Faegre Drinker said the GPSR “expressly includes provisions allowing collective actions to be pursued for breaches of all regulations, replacing a more limited collective redress provision under the current regulation”. “Moreover, the European Parliament and Council are reviewing proposals to enact the Revised Product Liability Directive and the AI Liability Directive, which would place additional regulatory burdens and liability risk on product manufacturers doing business in the EU,” it added. Only last week, a group of leading European business federations, including Insurance Europe, released a statement warning of potential damage to European competitiveness if negotiations on the proposed revision of the EU Product Liability Directive are rushed through. The signatories, a group of leading European business associations, say that the proposed revision would alter long-standing and balanced rules that generally function well. They fear that the revisions as they stand will lead to a rise in litigation and speculative claims against European businesses at a time when they are struggling to compete on the international stage. The groups stress that excessively rapid negotiations will result in “sub-optimal” legislation that will not only impose a heavy burden on judicial systems but disincentivise manufacturers from innovating.

European business faces further liability with new product safety rules

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