[LIFE SCIENCE]The new Product Liability Directive has been adopted and published in the Official Journal of the European Union: focus on the novelties to be transposed by December 2026

[LIFE SCIENCE]The new Product Liability Directive has been adopted and published in the Official Journal of the European Union: focus on the novelties to be transposed by December 2026
22/11/2024 , 04h38

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Adopted on October 23, 2024, by the Council of Europe and published in the Official Journal of the European Union on November 18, 2024, a new European Directive on defective products liability (the New Directive) sees the light of day. Proposed by the Commission on September 28, 2022, it first underwent several amendments by the European Parliament, before being unanimously approved on first reading by the Council.

 

With the current system over 40 years old, and against a backdrop of emerging new technologies and the continued development of online commerce, this renewed text aims to facilitate compensation for damage caused by defective products, while contributing to the smooth running of the market and ensuring legal certainty for economic operators. 

 

The current Directive 85/374/EEC is repealed with effect from 9 December 2026, the New Directive applies to all products placed on the market after 9 December 2026. Member States shall transpose its content into their national law by the same deadline.

 

LexCase reviews the main innovations in the text adopted by the European Parliament.

 

1- Easier access to compensation for victims

  • The notion of defect[1] is broadened and clarified by the New Directive, in particular through the reference to any product recall or any other relevant intervention by a competent authority or an economic operator, and to any failure of the product to fulfil its purpose when this relates to the prevention of damage.
  • One of the main innovations of the New Directive is the use of presumptions of defectiveness and causality, reducing the claimant’s burden of proof

 The presumption of defect is deemed established when the defendant has failed to disclose relevant evidence, if the claimant demonstrates that the product does not comply with mandatory product safety requirements, or if the damage was caused by an obvious malfunction of the product during reasonably foreseeable use or in ordinary circumstances[2] .

 

  The presumption of a causal link applies when it has been established that the product is defective and that the damage caused is of a nature generally compatible with the defect in question. [3]

 

  The defectiveness of the product or the causal link shall be presumed, despite the production of evidence and taking into account all the relevant circumstances, in the event that the claimant faces excessive difficulties of proof, in particular due to technical or scientific complexity, and in the event that he demonstrates that it is likely that there is a causal link or that the product is defective.[4]

 

It is interesting to note that the First Civil Chamber of the French Court of cassation (Cour de cassation), in a ruling handed down on November 14, 2024, has asserted the possibility of establishing a causal link by simple legal presumption, even in the absence of scientific proof. Relying on article 1245-8 of the French Civil Code currently in force, it recalls that the claimant may demonstrate the causal link between the defect and the damage by any means, including serious, precise and concordant evidence. In censuring a Court of Appeal which had required strict scientific proof, the High Court opens the way to a flexible and pragmatic interpretation of causality. In this case, the claimants seeking compensation for the damages allegedly caused by a new formula of the medicine “Levothyrox”, encountered difficulties in proving a scientific causal link between the defectiveness of the medicine and their damages. Therefore, this case shows the Cour de cassation is already in line with the evolution foreseen by Article 10 of the New Directives.

 

It is a given that the defendant shall has the right to rebut any presumption.[5]

  •  The New Directive includes damage to psychological health in the scope of covered damage[6] , insofar as it affects the victim’s general state of health and may require therapy or medical treatment, considering, among other things, the International Classification of Diseases established by the WHO. The destruction or corruption of data not used exclusively for professional purposes[7] is also included within the scope of reparable damage. The New Directive also revokes the minimum compensation threshold of 500 euros for material damage.
     
  • An obligation to disclose evidence is also proposed, authorizing national courts to require the defendant to disclose “necessary and proportionate” evidence, at the request of the claimant who has provided sufficient evidence[8]. In return, strict safeguards are introduced, aimed in particular at protecting information that is a trade secret or an alleged trade secret. It should be noted, however, that similar guarantees already exist under French law[9]. The New Directive extends the benefit of this provision to defendants who, having themselves disclosed evidence, may also request the disclosure of evidence by the claimant, if he provides sufficient elements to prove that it is necessary for his defense.

[1] Article 7 of the New Directive

[2] Article 10 of the New Directive

[3] Article 10 of the New Directive

[4] Article 10, 4. a) and b) of the New Directive

[5] Article 10, 5. of the New Directive

[6] Article 6, 1), a), of the New Directive

[7] Article 6, 1), b), iii) of the New Directive

[8] Article 9 of the New Directive

[9] “Référé 145” (Article 145 of the French Civil Procedure Code), Art. L. 151-1 and L. 151-3 of the French Commercial Code

 

2- Economic operators likely to be held liable

  • The principle of the liability of the manufacturer of the defective product is affirmed.  This now includes the liability of the manufacturer of a defective component, where this component has been integrated into a product or interconnected with it under the manufacturer’s control and has caused the product defectiveness, without prejudice to the liability of the manufacturer of the product.[1]

    Where these are established outside the EU, and without prejudice to their liability, this liability is extended to the importer of the defective product or component, to the manufacturer’s agent and, failing that, to the order fulfillment service provider
    [2] . For the benefit of the New Directive, where more than one economic operator is liable for the same damage, an economic operator who has compensated the injured party has the right of recourse against any other economic operator liable.[3]
  • The New Directive establishes the liability of any person, other than the manufacturer, who intervenes substantially in the structure or functioning of a product which is defective[4] . This person is then considered to be the manufacturer of the modified product and becomes fully liable for any damage caused by this product. Such a substantial modification by a third party will then exonerate the original manufacturer, provided that this modification is not carried out under its control[5]. A modification made to a product after it has been put into service is considered “substantial” if it alters the original performance, purpose or type of the product without having been foreseen in the manufacturer’s initial risk assessment, and if it changes the nature of the hazard, creates a hazard or increases the level of risk. [6]
  • The New Directive adds that in the absence of a solvent liable party, Member States may use existing national sectoral compensation schemes or create new ones under national law, preferably not financed by public revenue.[7]

[1] Article 6, 1), b), ii) of the New Directive

[2] Article 8 of the New Directive

[3] Article 14 of the New Directive

[4] Article 8, 2. of the New Directive

[5] Article 11, 2. d) of the New Directive

[6] Article 4, 18. of the New Directive

[7] Article 8, 5. of the New Directive

 

3- Changes in limitation and expiration periods

  • While the reform maintains the dual limitation period of 3 years and 10 years for the extinction of the action[1], it now specifies that the extinction period begins to run either when the product is placed on the market or put into service, or when a substantially modified product is made available on the market or put into service, following this substantial modification[2]. 
  • In addition, an expiry period is extended to 25 years in cases where medical evidence shows that the symptoms of a bodily injury are slow onset.[3]

[1]A limitation period of three years from the date on which the claimant knew or should have known of the damage, the defect and the identity of the producer, and a time limit for extinction of the action of ten years from the date on which the product was placed on the market, in accordance with article 10 of the Directive on liability for defective products of July 25, 19852 currently in force.

[2]Article 17, 1. of the New Directive

[3]Article 17 – Limitation period. The previous proposal provided for a limitation period of 15 years, which has been significantly increased to suit the said situation (25 years).

 

4 –Adapting the regime to new technologies

  • The New Directive includes software and artificial intelligence systems within its scope. The New Directive specifies, however, that free and open-source software provided for non-commercial purposes is excluded[1] , as is the content of digital files, which is considered to be information.
  • The deployed regime also extends to integrated or interconnected digital services (“related services”), considered as productcomponents when they are under the control of the manufacturer of the product to which they are integrated or interconnected[2](such as a health monitoring service that relies on sensors in a physical product to track the user’s physical activity or health measurements). They are under its control if the manufacturer authorizes or accepts their integration, interconnection or supply by a third party. In addition, a manufacturer who designs a product capable of developing unexpected behavior will have to remain liable for behavior causing damage.[3]
  • The New Directive also reduces the right of recourse of the manufacturer integrating a defective software as a component of the product, depending on the size of the company or the contractual agreements.[4]

 


[1] Article 2 of the New Directive

[2] Article 4, 3 and article 4, 5. of the New Directive

[3] Article 8. 1 of the New Directive: recital (46) of the New Directive

[4] Article 12 of the New Directive