The EU has enacted a sweeping revision of its Product Liability Directive (PLD) that will fundamentally reshape the legal landscape for product liability in the EU. The new Directive (EU) 2024/2853, which must be transposed into national law by December 9, 2026, introduces significant changes that will directly impact companies involved in the development, manufacture, and/or distribution of products. The new regime is designed to address the complexities of modern technologies, digital products, and global supply chains, and is expected to make product liability litigation in the EU more accessible and claimant-friendly.
Key changes from the old law
1. Expanded definition of “product”
The new Directive explicitly defines software (including AI systems and updates), digital manufacturing files, and certain digital services as “products” subject to strict liability. Products that incorporate software, AI, or digital services also now fall squarely within the definition of “product,” as do standalone applications and AI-driven tools. These changes reflect a major shift from the previous regime, which was ambiguous about the status of software and digital elements.
2. Broader range of liable parties
Liability now extends beyond traditional manufacturers to include additional entities in the stream of commerce. This includes component manufacturers, software developers, authorized representatives, importers, fulfillment service providers (such as e-commerce platforms), and, in some cases, distributors and online marketplaces. Where a manufacturer is located outside of the EU, claimants may bring claims against the manufacturer’s authorized representative in the EU, the importer, or the fulfillment service provider. Further, any party that substantially modifies a product after it is placed on the market (including through software updates or AI-driven changes) can be deemed a manufacturer and held strictly liable.
3. Lowered barriers for claimants: Presumptions and burden of proof
The new Directive introduces several rebuttable presumptions that could shift the burden of proof on defectiveness and causation to defendants, making it significantly easier for claimants to establish liability.
- Defect will be presumed if the manufacturer fails to disclose relevant evidence, if the product does not comply with mandatory safety requirements, or if there is an “obvious malfunction.”
- Causation will be presumed if it is established that the product was defective, and the damage caused is of a “kind typically consistent” with the defect.
- Defectiveness and/or causation will be presumed where the claimant faces “excessive difficulties, in particular, due to technical or scientific complexity.”
4. Post-market and life cycle liability
Liability can now attach to defects arising after a product is placed on the market if the manufacturer retains control. Manufacturers also remain liable for harm caused by the autonomous or adaptive behavior of AI systems, including post-sale changes.
5. Procedural changes
Under the new PLD, national courts may, at the request of a claimant or defendant, require the disclosure of relevant evidence at their disposal. The disclosure is limited, however, to what is “necessary and proportionate.” To trigger the disclosure requirement, the requesting party must present facts and evidence “sufficient to support the plausibility of the claim.”
6. Expanded definition of compensable damage
- Psychological harm: Medically recognized psychological injuries are now compensable, in addition to physical injuries and death.
- Data loss: Destruction or corruption of non-professional data is now a recognized damage.
- No minimum threshold: The previous €500 minimum threshold for property damage claims has been abolished, potentially increasing the volume of small claims.
7. Extended liability periods
The standard liability period remains 10 years, but for latent injuries, the new PLD extends the period to 25 years.
8. Collective redress and increased litigation risk
The new Directive operates alongside the EU’s Representative Actions Directive (RAD), which facilitates consumer class and mass actions by introducing EU-wide minimum standards for procedural rules in member states for collective redress and injunctive relief. Member states were required to implement the RAD into their national laws by December 25, 2022, and start applying those measures as of June 25, 2023. Qualified entities (such as consumer organizations) can now bring collective claims, increasing the risk of large-scale litigation. In fact, there has already been a significant uptick in representative actions since the RAD’s enactment.
Further compounding litigation risk is the rise of litigation funders, who collaborate to bring actions under the RAD in the hopes of reaping financial benefits from their financial investment in litigation. Litigation funders and plaintiff firms alike are already expanding or opening new offices across the EU.
9. Limited defenses
The state-of-the-art defense – which asserts that the alleged defect could not have been discovered given the state of scientific and technical knowledge at the time – is a well-known and important defense for defendants in any product liability lawsuit. Under the new PLD, member states may omit this defense, potentially exposing companies to even greater liability. Additionally, under the new PLD, subsequent remedial measures will be held against the defendant(s), but will not be permitted to form the sole evidence of defect.
Actionable steps
- Increased litigation exposure: The combination of expanded product definitions, broader liability, lower evidentiary thresholds, limited defenses, and collective redress mechanisms is expected to increase both the frequency and success rate of product liability claims in the EU. Companies should identify which of their products fall within the scope of the expanded definition of products and consider what steps they must take to mitigate potential product liability risk. Litigation strategies should include multi-jurisdictional evidencing issues and the dealing with correlated legal privilege considerations.
- Heightened compliance and documentation requirements: Companies should ensure robust product safety procedures are embedded in documentation practices, especially for software updates, AI systems, and other digital products. This is particularly important in highly regulated sectors such as medical devices and digital health products.
- Supply chain and contractual risk: All actors in the supply chain, including software and component suppliers, should review and update contractual arrangements, indemnities, and insurance coverage in light of the new liability landscape.
- Insurance coverage: Companies should review their insurance policies to ensure coverage for relevant risks, such as data loss and/or corruption, and confirm that the coverage accounts for the longer liability tail.
- Strategic considerations for AI and digital products health: Developers of digital products, e.g. AI-driven medical devices and digital health applications, must anticipate liability for autonomous or adaptive product behavior and ensure compliance with evolving safety and cybersecurity standards.
- Policy and advocacy considerations: With member states required to transpose the new PLD into local law by December 9, 2026, companies face a critical window for proactive engagement at both the EU and member state levels. Early advocacy is essential to help shape how key concepts—such as the definition of "excessive difficulties" and other pivotal standards—are interpreted and implemented in national legislation. Once the PLD is in force and litigation begins, companies will need to be strategic in developing favorable case law. This includes challenging adverse presumptions, seeking judicial clarification on rebuttal standards, advocating for reasonable disclosure obligations, addressing procedural constraints such as third-party litigation funding and cross-jurisdictional issues, and leveraging all available procedural tools through a coordinated, collaborative defense team.
Conclusion
The new EU Product Liability Directive represents a paradigm shift for product liability across the European Union. The Directive’s expanded scope, broader liability, and claimant-friendly procedural rules will require proactive risk management, enhanced compliance, and careful review of supply chain relationships. Companies should begin preparing now ahead of the December 2026 implementation deadline.
Client Alert 2025-160
