The European Commission is moving forward with its plans to revise the Product Liability Directive (85/374/EEC) (the “PLD”) and national implementing legislation. The proposals promise to shake up the liability framework for those in the supply chain involved in the manufacture of new technologies. A public consultation was recently launched and is open until 10 January 2022. Read on to find out some key updates being assessed in potential revision of the PLD, and how these might impact companies.

What is happening?

The PLD (together with national implementing legislation) is the foundation of the EU product liability legal framework. It sets out an EU-wide regime of strict liability for defective products that have caused personal injury or damage to property of consumers.

Proposals to revise the PLD seek to address perceived shortcomings identified in the European Commission’s 2018 evaluation of the PLD, as well as potential challenges stemming from the rise of the circular economy and growth of online marketplaces as identified in the June 2021 Impact Assessment.

Publication of the draft revised legislation was originally due at the start of 2022 but has been pushed back to Q3 2022. So for now, we focus on some critical potential amendments, and how now is the time to shape the development of this fundamental EU legislation.

Why does it matter?

Some of the key policy options that are being considered as part of the revision are:

  • Amendments that would make it easier for consumers to bring claims:
    Amongst other methods, the Commission is looking at easing the conditions for making claims in relation to the time limits and minimum threshold for damage to property. A key impact from the revision could be an increase to the risk profile for consumer product liability claims in the EU, especially for class actions when the new Representative Actions Directive starts to apply June 2023 (for more on this legislation see our blog here).
  • Updates to take into account developments linked to the move towards a circular economy and to address challenges posed by new technologies:
    Potential revisions could extend strict liability rules to cover intangible products that cause physical or material damage (e.g. software and digital content), address defects resulting from changes to products after they have been put into circulation (e.g. software updates or circular economy activities like product refurbishments), defects resulting from interactions with other products and services (e.g. IoT) as well as connectivity and cybersecurity risks, and extend the range of damage for which compensation can be claimed to non-material damages (e.g. environmental damage, data loss or privacy infringements).
  • Changes to impose liability on online marketplaces for failure to identify supplier:
    The Commission is also looking at potentially extending the strict liability imposed on the “producer” of a product to online marketplaces, where they fail to identify who supplied them with a product within a reasonable time upon request.
  • Updates specifically for AI:
    A key focus of the updates, this area could see significant change. For example, removing the development risk defence or reversing the burden of proof for AI-enabled products. The Commission is also looking at introducing ties to compliance with obligations under the proposed AI regulation by alleviating or reversing the burden of proof in situations where compliance obligations with the proposed AI regulation have not been met.

This sounds important, how can my views be heard?

Manufacturers, importers and distributors of products in the EU would all be affected by revision proposals. If any of the above have piqued your interest and you’d like to submit views on the impact the proposed revisions might have, the window is now open! The public consultation on the European Commission’s plans to revise the PLD and national liability rules closes on 10 January 2022. (Feedback will be made public.)

See here to participate, and here to learn more about the Commission’s review of the PLD.

For advice on the revisions to the PLD, or assistance participating in the public consultation, please contact a member of the Cooley Products team. We have been directly involved in many of the key European Commission discussions around these issues over the past years, and we’d be delighted to hear from you.

Posted by Jamie Humphreys, Tracey Bischofberger and tbuckthorp

Jamie Humphreys is a litigation and regulatory lawyer. He is a strategic advisor to clients who face critical threats to their business at all stages of the product life-cycle, working with them to ensure the most favourable outcome and manage any reputational impact. He also provides policy advice to clients on proposed legislation and regulations that may introduce profound changes to their business. He has acted on high profile litigation across a range of different industries, internal investigations into allegations of fraud by global products manufacturers, major corruption investigations for Governments, and B2B product liability disputes, international recalls and consumer claims for well-known global brands. He is passionate about the impact that new technologies such as 3D printing, AI and Internet of Things will have in the products space and works with clients to ensure they prosper within a dynamic regulatory environment.