The new Product Liability Directive adopted last year on 23 October 2024 came into force on 8 December 2024 providing Member States with two years to implement the provisions. Its goal: to address and tackle the new product liability challenges of the digital age.

Amongst a host of new provisions, the new product liability rules seek to ease the burden of proof on claimants to prove ‘defectiveness’, particularly where the products relate to scientifically complex products or the products are software or created by artificial intelligence where products are technically complex.  

The new Product Liability Directive should be read in conjunction with the General Product Safety Regulation (GPSR) (already in force) now the primary law governing the safety of all consumer products sold within the EU.

NEW DEFINITION OF DEFECTIVE

Under the new Directive a product is regarded as ‘defective’ when it does not provide the level of safety a person is entitled to expect on the basis of an objective analysis (article 7 of the Directive attributes relevance to the apparent features and characteristics of the product, its reasonably foreseeable use and the pertinent safety requirements, including relevant cybersecurity requirements). This definition is taken from the requirements of product safety rules.

STRICT LIABILITY

As in the previous product liability directive, a strict liability regime will apply. This means consumers have to show there was a defect in the product but don’t have to show negligence (eg: it will not depend on fault or intent of the manufacturer). The claimant has to show that the product had a defect, damage was suffered and that there was a causal link between the defect and the damage suffered. 

The new Directive applies to all companies placing products onto the EU market from 9 December 2026. While repealing the previous the Product Liability Directive of 1985 (85/374/EEC) the old rules will still apply to all products or services put on the market up until 8 December 2026. On implementing the New Directive Member States may not introduce national provisions different from those set out in the Directive – whether more or less stringent.

BROADENING THE SCOPE OF PRODUCT LIABILITY

The new Directive broadens the scope of product liability in the following ways: 

  • the definition of ‘product’ is widened to include all movables even if integrated or interconnected with another moveable or immovable, software, digital services and AI integrated products;
  • claimants can take action and claim damages for destruction or corruption of data;
  • damage can be claimed from manufacturers if they do not provide sufficient software updates or provide insufficient cybersecurity protection for products;
  • compensable harm can include psychological damage and for data destruction (eg the deletion of digital files from a hard drive);
  • if the manufacturer is outside the EU claims can also be brought against the authorized representatives of the manufacturer, software developers, storage, packing and shipping service providers and in certain circumstances distributors and online marketplace operators may also incur liability;
  • Online platforms acting as mere intermediaries for the defective product can also be held liable under certain circumstances.

PRESUMPTION OF DEFECTIVENESS IN CERTAIN CIRCUMSTANCES

The new Directive eases the burden of proof on the plaintiff establishing a presumption of defectiveness and a causal link if proof is:

  1. excessively difficult due to technical or scientific complexity of the product;
  2. a product defect and/or causality is at least probable

thus leaning towards the consumer who may not have a full knowledge of technical functioning of the products.

DEFENDANT DISCLOSURE OF RELEVANT EVIDENCE IN CERTAIN CIRCUMSTANCES

Also under the new Directive courts can oblige defendants to disclose relevant evidence in their power or at their disposal, if the injured party has made a sufficiently plausible claim for damages. Having said that the courts must take measures to protect defendant’s trade secrets or confidential information. The plaintiffs also have the right to request access to evidence.

DAMAGE

The right of compensation exists when one of the following types of damage have been caused by the defective product:

  • death or personal injury (including medically recognized damage to psychological health);
  • damage to property;
  • destruction or corruption of data not used for professional purpose.

LIMITATION PERIODS

Compensation has a three-year limitation period from damage discovery and 10 year limitation from the date the defective product was placed on the market or put in service. For personal injury with latent health damage the limitation period expiry has increased from 10 to 25 years.

While the clear aim of the new Directive is to increase consumer protection in the digital environment and provide more comprehensive provisions for damage caused by defective products which are digital in nature or marketed through online market operators, it will be interesting to see how, in practice, this legislation intersects with the provisions of the new AI Act and existing data protection and cybersecurity regulations. 

COMPANY PREPARATORY STEPS

Since the new Directive appears to make it easier for product liability cases to be brought in complex cases relating to digital products including AI generated products it is advisable for companies to:

  • carry out new product liability risk assessments;
  • review all product compliance systems;
  • review any product recall mechanisms;
  • check insurance coverage and
  • review agreements with third party distributors.

ITALY

In Italy the Consumer Code is the primary legislation for Product Liability. This Code is read in conjunction with the relevant provisions of the Italian Civil Code governing compensation for tortious acts and liability for the exercise of dangerous activities.

Italy, like other EU jurisdictions, has relied on the previous product liability directive for many years and now needs to implement the provisions of the new Directive by 8 December 2026. Italy welcomes wider protection for consumers and a more up to date legal framework in light of digital products and services. Like elsewhere, Italian companies affected by the new legislative will need to take preparatory action  reviewing their existing product liability risk profiles, reviewing current practices to ensure there is no higher risk of product defects, review strategies for monitoring and recall and possibly consider wider insurance cover given the impending the new product liability rules.