Expanded definition of “product”

One of the most significant changes is the explicit inclusion of software, AI systems, firmware, digital manufacturing files, and certain digital services within the definition of a “product.” This means:

• Standalone software, embedded software, and software-as-a-service (SaaS) are “products” subject to strict liability.
• Integrated and interconnected digital services, such as health monitoring services that rely on physical sensors, are also covered.
• Updates, upgrades, and AI-driven changes made after a product is placed on the market can trigger liability.

New disclosure requirements and risks to attorney communications

The Directive expands pretrial disclosure obligations across member states, introducing a process more akin to U.S.-style discovery. However, the scope of legal professional privilege in the EU is much narrower than in the United States, with many member states excluding in-house counsel communications from protection and varying rules on privilege for non-EU lawyers (such as those in the United States). This means that legal advice and internal communications typically protected in the United States may be subject to disclosure in EU proceedings, potentially triggering privilege waiver arguments in U.S. litigation. The lack of harmonization in privilege rules across the EU complicates cross-border litigation and may influence where claimants choose to file suit. Companies operating in the EU should begin implementing risk mitigation procedures now to help protect privileged communications.

New rebuttable presumptions: Lowering the bar for claimants

The Directive introduces several rebuttable presumptions that significantly lower the evidentiary burden for claimants:

• Presumption of defectiveness: If a manufacturer fails to disclose relevant evidence, if the product does not comply with mandatory safety requirements (including cybersecurity), or if there is an “obvious malfunction,” defectiveness is presumed.
• Presumption of causation: If a product is found defective and the damage is of a kind typically caused by such a defect, causation is presumed.
• Presumption of defect and/or causation: Where a claimant faces “excessive difficulties” in proving defectiveness or causation – especially due to technical or scientific complexity – courts can presume defectiveness and/or causation if the claimant can show that it is likely the product was defective or that there is a causal link.

These changes are expected to increase both the frequency and success rate of product liability claims in the EU, especially for complex products and AI systems.

How our firm can assist: Strategic advocacy and risk mitigation

• Strategic advocacy and engagement at the EU and member state level: Our firm is equipped to guide your company through the evolving PLD landscape by providing targeted advocacy and representation before the European Commission, industry groups, and national authorities. With ambiguous concepts – such as the “excessive difficulties” and “technical or scientific complexity” necessary to trigger presumptions of defect or causation – likely to be interpreted differently across member states, we can help you proactively engage in the legislative process, shape the interpretation of key provisions, and ensure your interests are represented as member states implement the PLD into local law.
• Tailored risk assessment: We offer a detailed, business-specific risk assessment to determine how the new PLD will impact your operations. This includes reviewing your current policies, procedures, and product lines to identify vulnerabilities and compliance gaps. Our approach is tailored to your industry, product portfolio, and operational footprint, ensuring that the assessment addresses the unique risks your business faces under the new Directive.
• Identifying high-risk areas: Our team will systematically identify products, digital features, and supply chain elements that may present heightened risk under the PLD. This includes a focus on products incorporating AI, software, or other digital components, as well as risks related to data destruction or corruption – areas specifically covered by the Directive. By mapping these high-risk areas, we help you prioritize mitigation efforts and allocate resources where they are most needed.
• Actionable, business-specific recommendations: Following our holistic review and risk mapping, we will deliver clear, prioritized recommendations for immediate and long-term actions. These are tailored to your business and product portfolio, providing a practical, actionable roadmap to reduce liability exposure under the PLD.
• Evaluation of product design, labeling, and documentation: We will review your product design, labeling, and related documentation to assess product liability under the new PLD. This includes ensuring compliance with the EU Medical Devices Regulation, In Vitro Diagnostic Regulation, the AI Act, GDPR, NIS2, and other relevant laws. Our team will map your internal practices for logging product performance, monitoring adverse events, and responding to incidents – critical elements of a robust litigation defense.
  
  For AI-enabled products, we will analyze the adequacy of safety mitigations, literacy programs, disclaimers, and human-in-the-loop mechanisms, as well as the explainability and transparency of AI outputs. We will assess risks associated with AI-generated outputs, such as clinical recommendations or diagnostics, and review the potential for foreseeable misuse or overreliance on AI tools.
• Supply chain risk mapping and contractual safeguards: We provide comprehensive supply chain risk mapping and contractual review services to identify vulnerabilities and compliance gaps. We will assess the compliance of all relevant partners to ensure they do not introduce additional product liability risks, including from cybersecurity vulnerabilities, and review and update contracts to ensure robust risk allocation, indemnification, and guarantee provisions.
• Internal training programs: We offer tailored training for your legal, compliance, product, and technical teams, focusing on the PLD’s provisions, best practices, and documentation standards. Our training programs are designed to equip your teams with the knowledge and tools needed to implement effective risk mitigation strategies and defend against product liability claims.
• Executive briefings and ongoing legal updates: Our team offers in-depth workshops and executive briefings for your leadership and key stakeholders, delivering a comprehensive understanding of the PLD and its implications for your business. As member states implement the PLD and new legal developments arise, we will keep you informed with timely updates and strategic guidance, ensuring your business remains ahead of regulatory changes and emerging risks.

Contact us to learn how we can help your business prepare for the new era of EU product liability.