The Council adopts its negotiating mandate for a new EU law on liability for defective products

The ambassadors of the EU member states agreed today on the Council’s negotiating mandate for a new EU law on liability for defective products. Once finally adopted, the law will update decades-old civil liability rules and make them fit for the digital age and circular economy.

Effective liability rules are essential if consumers are to trust the market. With our economies becoming digital and circular an update to the EU rulebook is important. The Council position will increase consumer protection and guarantee a stable legal framework for companies.

Gunnar Strömmer, Swedish Minister for Justice

Digital economy

The proposed new liability directive extends the definition of ‘product’ to digital manufacturing files and software. Because of the increasing technical complexity of many products, member states must also ensure that an injured person who claims compensation before a national court has access to relevant evidence at the disposal of the manufacturer on how a product was produced.

Circular economy

In a circular economy, products are designed to be more durable, reusable, reparable and upgradable. When a product is modified substantially and is made available on the market or put into service again, it is considered to be a new product. Where the modification is not made by the original manufacturer the new directive stipulates that the person that made the substantial modification should be held liable as the manufacturer of the modified product.

Products bought from non-EU manufacturers

Because consumers are increasingly buying from manufacturers based outside of the EU, the new liability directive provides for the same level of protection against defective products coming from non-EU manufacturers as for products from EU manufacturers. It stipulates that the importer of the defective product, the authorised representative of the manufacturer or, as a last resort, the fulfilment service provider (a company that typically takes care of the warehousing, packaging and dispatching of a product) can be held liable for damages.

Longer expiry period

Entitlement to compensation expires after 10 years from the placing on the market of the defective product. In cases where the symptoms of a personal injury are slow to emerge, the expiry period is 20 years – up from the original Commission proposal of 15 years.

Burden of proof

One of the directive’s objectives is to ensure that consumers will have a fair chance of getting compensation in complex cases. The Council has therefore streamlined the presumptions that apply when claimants are faced with excessive difficulties, in particular due to the technical or scientific complexity of the case.

In these cases, the claimant is only required to prove the likelihood that the product was defective or that its defectiveness is a likely cause of the damage.

Background

The EU product liability regime was established to compensate injured persons for physical injury or damages of property that they have suffered due to a defective product (for instance an overheating hair dryer or a leaking washing machine), simply by proving that a product was defective and that the defect caused the injury or damage.

The current EU rules date back to 1985, a time when few products had any digital features and when circularity was only a nascent concept.

Next steps

On the basis of the negotiating position agreed on today the Council will be able engage in talks with the European Parliament – once it has adopted its own position – to settle on the final legal text.