The provisional agreement on the liability of economic operators for damage caused by defective products aims to respond to the increase in online shopping (including from outside the EU) and the emergence of new technologies (such as AI) as well as to ensure the transition to a circular economic model. In order not to stifle innovation, the rules will not apply to open-source software developed or supplied outside of a commercial activity.
New rules ensure that there is always an EU-based business, such as a manufacturer, importer or their authorised representative that can be held liable for a product that caused damage, even if the product was not bought in the EU. MEPs insisted that in cases when such a liable business cannot be identified, member states may provide compensation using national compensation schemes.
Easier access to compensation
The negotiators agreed to simplify the burden of proof for the person requiring compensation, who would normally have to prove that the product was defective and that this caused the damage suffered. For example, the defectiveness may be presumed by a court in case the claimant faces excessive difficulties in particular due to technical or scientific complexity and the product is likely to be defective.
To further help victims of damage with their compensation claim, they will be able to request that the court order the business to disclose the “necessary and proportionate” evidence. MEPs also insisted that competent consumer protection authorities or bodies should be encouraged to provide additional help with compensation claims to consumers.
Extended liability
MEPs ensured, during the talks, that it will be possible to get compensation not only for material damage, such as destruction of property, but also for non-material losses, including medically recognised damage to psychological health. It will also be possible to claim compensation following the destruction or corruption of data that are not used for professional purposes (e.g. deletion of files from a hard drive). Negotiators also agreed on an extended liability period of 25 years in exceptional cases when symptoms are slow to emerge. The injured person will still be able to get compensation after this period if the proceeding was initiated within the given period.
Quotes
Following the negotiations, the Legal Affairs Committee (JURI) co-rapporteur Pascal Arimont (EPP, BE) said: “The revised Product Liability Directive aims to strike the right balance between the need to remain an effective instrument for victims injured by defective products, and the legal certainty economic operators deserve in a fast-changing market characterised today by digitalisation, the circular economy and global value chains”.
The Internal Market and Consumer Protection Committee (IMCO) co-rapporteur Vlad-Marius Botoş (Renew, RO) noted: “The revision of the product liability directive was long awaited. We needed this revision to adapt the liability regime to the new legislation, and to new and innovative products. We must be clear and decide how to cover these new products so that all European citizens have the same rights to be compensated when damage occurs, but it has to be done carefully, to ensure a balance and encourage innovation and the development of new products.”
Next steps
The legislation will enter into force once formally approved by the plenary and the member states. The new rules will apply to products placed on the market 24 months after entry into force of this directive.
Background
These agreed rules update the existing Directive on the liability of defective products, which is now almost 40 years old. It provides an additional layer of consumer protection in the EU on top of national liability regimes. When it comes to AI technology, consumers will also be protected by fault-based rules in the upcoming AI Liability Directive, which is currently being examined by Parliament and Council.
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