Last updated: 15 January 2025
The EU Product Liability Directive (85/374/EEC) (“1985 PLD”) established a strict (no fault) liability regime for defective products. Since its entry into force 40 years ago, technology has developed rapidly, but the law has not kept pace.
The long-awaited, revised EU Product Liability Directive (2024/2853) (PLD) was published in the Official Journal of the EU on 18 November 2024 and came into force on 9 December 2024. However, this did not mean that the harmonized EU rules for strict product liability claims changed immediately. Member States were given two years from when the PLD entered into force to transpose the new directive into national law (i.e., until 9 December 2026). The 1985 PLD continues to apply to products placed on the market or put into service before 9 December 2026.
The PLD aims to update the EU’s product liability regime to adapt to the changes of the digital age, the circular economy and global supply chains. The PLD strikes a more consumer-friendly balance between the interests of industry and consumers, and it may make it easier for consumers to successfully pursue product liability litigation in EU Member States (once the new PLD is adopted and incorporated into the laws of each EU member state by 9 December 2026).
What are the key changes?
The PLD provides for significant changes to the status quo. Key changes include the following:
- Scope of PLD: Under the PLD, strict product liability claims could be made in respect of personal injury (now expressly including medically recognised damage to psychological health), property damage (other than the defective product itself or property used exclusively for professional purposes) or “destruction or corruption of data that are not used for professional purposes.” Under the 1985 PLD, claims could only be made for personal injury or property damage.
- Software/AI: The definition of “product” includes software such as operating systems, firmware, computer programs, applications or AI systems, raw materials such as gas and water, and digital manufacturing files (such as those that are used for purposes of 3D printing). Additionally, related services, such as a digital service interconnected with a product that is required for the product’s functions to be performed (e.g., a health-monitoring service that relies on sensors of a physical product to track the user’s physical activity or health metrics) could be considered a component part of a product. However, to help boost innovation, the PLD does not apply to free and open-source software that is developed or supplied outside the course of a commercial activity.
- Producer or manufacturer: In the PLD, the term “producer” has been replaced with “manufacturer” (this includes own-branders), and the scope of the definition has been expanded. For example, providers of software could face liability as a “manufacturer” under the PLD. Additionally, when a product is substantially modified and then made available on the market or put into service, it is considered a new product. Accordingly, anyone who substantially modifies a product outside the manufacturer’s control and makes it available on the market or puts it into service will be treated as a manufacturer.
- Liable operator in the EU: The PLD seeks to ensure that an EU-based business can always be held liable for the damage a product causes to a consumer in the EU.
As a starting point, the manufacturer of a product or a component will be held liable, followed by the importer and/or authorized representative if the manufacturer is established outside the EU. If the importer is based outside the EU or there is no authorized representative, liability for a defective product may then be attributed to the fulfilment service provider (a company that typically takes care of warehousing, packaging and dispatching).
If one of those economic operators established in the EU cannot be identified, each distributor can be liable if it fails to identify the economic operators established in the EU or the distributor that supplied the product within one month of a request from an injured person.
An online marketplace (which is not otherwise an economic operator, such as a manufacturer, importer, fulfilment service provider or distributor) could face liability in similar circumstances to a distributor if it allows consumers to conclude distance contracts with traders, but leads consumers to believe the product is provided by the marketplace itself, or by a trader acting under its authority or control.
- Defect — expanded list of factors: While the test for determining whether a product is defective remains largely the same as under the 1985 PLD, the definition of defect in the PLD expressly includes cases where a product does not provide the safety that a person is entitled to expect “or that is required under Union or national law.” The PLD contains an expanded, non-exhaustive list of factors to consider when assessing the defectiveness of a product, such as the interconnectedness or self-learning functions of products, and the compliance of a product with safety-relevant cybersecurity requirements.
- Scope of liability: Under the PLD, liability may no longer be assessed simply by reference to when a product was put into circulation. The period after circulation, including once the product has been placed on the market, can be considered. For example, if the defectiveness of a product is due to a software update that is within the manufacturer’s control, the manufacturer will need to consider whether it should provide software or cybersecurity updates to ensure the continued safety of the product. However, the PLD clarifies that a product will not be considered defective for the sole reason that a better product, including updates or upgrades to a product, is already or later placed on the market or put into service.
- Extended compensation period: Under the PLD, the longstop date (after which claims cannot be made) will remain 10 years for most claims and will be extended to 25 years if an injured person has not been able to begin proceedings due to “latency of a personal injury” (e.g., if symptoms are slow to emerge). However, the longstop period will run from: (i) the date on which the product was placed on the market or put into service; or (ii) the date the product was made available or put into service after a substantial modification (e.g., due to a software update or continuous learning of an AI system). As under the 1985 PLD, the time limits for initiating proceedings under the PLD remains three years from the day on which the claimant becomes aware (or should reasonably have become aware) of all of the following: (i) the damage; (ii) the defectiveness; and (iii) the identity of the relevant economic operator that can be held liable for the damage.
- Disclosure: The PLD requires Member States to ensure that a defendant or a claimant can be required to disclose relevant evidence (subject to certain limitations, such as whether: (i) the claimant has presented sufficient facts and evidence to support the plausibility of their claim and requests disclosure; and (ii) disclosure is necessary and proportionate).
- Burden of proof: The PLD would allow the burden of proof for the injured person to be alleviated in some circumstances. In particular, the PLD contains a rebuttable presumption of defectiveness under the following circumstances:
- If a defendant fails to disclose relevant evidence if required (see above)
- If a claimant demonstrates that the product does not comply with mandatory product safety requirements
- If a claimant demonstrates that the damage was caused by an obvious malfunction of a product during reasonably foreseeable use or under ordinary circumstances
There is also a rebuttable presumption of the causal link between defect and damage if it has been established that the relevant product is defective and the damage caused is of a kind typically consistent with the defect in question.
Finally, there is a rebuttable presumption of the defectiveness of a product or the causal link between defect and damage, or both, if despite the disclosure of evidence (see above) and considering all the relevant circumstances of the case: (a) the claimant faces excessive difficulties (particularly due to technical or scientific complexity) in proving defect or causation of damage, or both; and (b) the claimant demonstrates that it is likely that the product is defective or that there is a causal link between the defectiveness and damage, or both.
Key takeaways for businesses
Some of the amendments to the 1985 PLD, such as the expansion of the definition of “product” to include intangible products, have been anticipated for a number of years. However, other changes, such as extending the scope of the PLD to cover claims for the destruction or corruption of data, and proposals to recast the burden of proof, are more significant.
The changes clearly intend to strike a different balance between the interests of industry and consumers. While the PLD does not necessarily open the floodgates to a much larger number of claims, it is clearly more consumer friendly. The changes are especially noteworthy, given that the recent EU Directive 2020/1828 enabling representative actions to be brought on behalf of claimants across the EU has a wide application and covers the 1985 PLD.
What happens next?
EU Member States have until 9 December 2026 to implement the PLD into their own national laws. The new rules will apply to products placed on the market from 9 December 2026.
Manufacturers selling products into the EU and other companies involved in the supply chain should consider the changes that will come into force in the EU when assessing and managing their product liability risk.
The strict product liability regime in the UK is also in the process of being updated. However, the government has not yet published any concrete proposals for change. Read our article for further information on the current state of developments in the UK.
