If you are a regular blog reader, you may have seen some of our prior posts about the new Product Liability Directive adopted by the European Union and going into force this December.  

Two weeks ago, we had the pleasure of Co-Chairing the inaugural forum on Life Sciences Product Liability Europe in Brussels, and it was everything you want in a conference:  informative, interesting, great presentations, great informal interactions.  We left having been better for attending and with more ideas to think about—and advise clients about.

The European Union Product Liability Directive: A Quick Backgrounder

The formal name of what we call the “EU PLD” is Directive (EU) 2024/2853 of the European Parliament and of the Council of 23 October 2024 on liability for defective products and repealing Council Directive 85/374/EEC (Nov. 18, 2024).  Here is a high level overview:

• The 27 EU member countries must transpose (adopt) the EU PLD into their national law by December 9, 2026 and it will apply to any “products” sold or put into service in the EU as of December 10, 2026.
• “Products” means tangible goods plus commercial software, AI, electricity, raw materials, digital manufacturing files, and digital services that a product needs to function.
• The EU PLD is designed to ensure there always is an EU-based defendant (“economic operator”) to sue.  If not the manufacturer, the importer, an authorized representative, or a fulfillment service provider.  Even distributors and some online platforms can get tagged if they don’t identify an upstream economic operator.  Substantial modifiers of a product also may be liable.
• A product is defective when it doesn’t provide “the safety that a person is entitled to expect” or that is required by some other regulation or law.
• A product is defective if there was an “obvious malfunction” in ordinary or foreseeable use.
• Defects also include post-sale problematic software updates and failures to patch cybersecurity vulnerabilities.
• Causation is presumed when defect is established and the damage is “of a kind typically consistent with the defect in question”.
• Both defect and/or causation must be presumed where the claimant faces excessive difficulties—in particular due to technical or scientific complexity (as with AI and pharmaceutical “black boxes”)—in proving the elements of defect and/or causation, and those elements are “likely”.  (What is likely?)  
• Damages caps are gone, and medically recognized psychological harm is recoverable.  Data loss and corruption are now compensable damages.
• New disclosure obligations: Even if a given EU country never previously provided for discovery, the EU PLD will now require defendants to disclose documents and information. Supposedly the disclosure will just be what is “necessary and appropriate”.  
• In addition, the defendant can be ordered to produce documents and information in a manner reasonably understandable to the claimant.  (What does that mean?  Unclear.).  
• Also, a presumption of defect arises if a defendant fails to disclose evidence it was obliged to.
• Longer limitations period (3 years) and statute of repose/long-stop period for latent injuries (25 years).
• Works alongside the newer EU collective-redress/representative-action mechanism.

Take-Aways From The Inaugural Life Sciences Product Liability Europe Conference

One of the presenters we looked most forward to hearing from was Katrin Saaremӓel of the European Commission, who is working on implementation of the EU PLD and provides support to the EU countries working on transposing the Directive into national law.  

During her presentation, Ms. Saaremӓel indicated that the European Commission’s intent in proposing the new EU PLD was four-fold:

1. To adapt to the digital age.

The EU PLD wound up written as it is in part because of how it was developed—initially in conjunction with a potential AI Directive.  Eventually the AI Directive project was dropped and software and AI concerns worked their way into the EU PLD.  As a result, the EU PLD is intended to impose liability after products are placed on the market if there are problems with software updates or upgrades, or if there is some failure to address cybersecurity risks.

• To adapt to the circular economy.

To the extent products are increasingly going to be reused and recycled, the drafters concluded that those who make substantial modifications should be liable for introducing new defects.

• To adapt to global value chains and “level the playing field” between EU and non-EU manufacturers.

The European Commission wanted to make sure that if they were increasing liability, that it would not only apply to EU manufacturers.  Many of the provisions were incorporated to make sure there always will be someone in the chain of distribution in the EU who could be tagged for litigation.

• To make it easier for injured people to prove liability and get full compensation.

It was interesting to hear that an expressly-stated goal of the new EU PLD is to “make it easier for injured people to prove liability and get full compensation”.  There are so many assumptions and policy judgments embedded in that statement.  

But this goal, of increasing product liability and verdicts, is directly reflected in the EU PLD:  The new disclosure obligations, all the presumptions of defect and/or causation, the extension of the long-stop period for latent injuries to 25 years, and the removal of financial ceilings.   

The European Commission plans programs to train judges in the courts of the EU nations, and to prepare materials to be distributed about the EU PLD.  Query what the emphasis of that training will be and whether it will address the issues we have and the EU business community may well have as well.

The European Commission also intends a campaign to raise the general public’s awareness of the PLD, including creating a website about the European Commission with a FAQ page.

One key revelation:  The European Commission has set up an email box for comments on the EU PLD.  It was mentioned for the purpose of collecting information about Member States’ efforts to transpose the EU PLD into national law (and whether there were any errors made in the transposition process).  But this email address is apparently operational, so we suggest considering submission of other comments and questions also.  The address:

[email protected]

EU Product Liability Opinions

Ms. Saaremӓel noted that one hurdle the European Commission had in studying the prior EU PLD was that until now, product liability opinions from throughout the EU are hard to find.  What opinions are available apparently reside with Professor Duncan Fairgrieve (a keynote speaker at the conference) who has collected about 650 cases from 1985 to present into a database.

The new EU PLD seeks to make all EU product liability opinions more readily available going forward.  Each EU member nation will be required to publish any final appellate its own opinions touching on the EU PLD. From there, the European Commission will collect those into an easily accessible and publicly available database.

Having those decisions more readily available should be helpful for defense lawyers looking to help propagating good rulings across the EU.  But it just as easily could help spread the bad ones, so there is work to do.