The European Council adopted the Directive on Liability for Defective Products (“DLDP”), replacing the previous directive[1] to bolster effectiveness of the principle that a consumer who suffers material or immaterial damage from a defective product can seek compensation from economic operators in the supply chain.[2]
The DLDP updates the EU’s liability regime to better suit the digital and circular economy, ensuring the effective protection of consumers in light of technological developments. Together with the AI Act[3] and the Proposal for an AI Liability Directive[4]submitted by the European Commission on September 28, 2022, the DLDP will help address concerns related to artificial intelligence.
The DLDP will be published in the Official Journal and will enter into force 20 days after its publication. Member States have two years to transpose the DLDP into national law.
DEFINITIONS AND SCOPE OF APPLICATION
The DLDP broadens the scope of application of the liability regime set forth under Directive 85/374/EEC in objective and subjective terms.
First, the DLDP expands the definition of a “product” [5] so that consumers may request compensation for damage resulting from defective software and digital manufacturing files.
The general rule is to pass risks on to the manufacturers in the form of liability for defective products (and defective components integrated into or inter-connected with products). When it is impossible to identify the manufacturers—due, for instance, to technical complexity—all the economic operators in the supply chain may be sued by consumers. This ensures that consumers are offered protection and compensation in early phases. At a later stage, stakeholders may ask the courts to identify the actual factors that triggered the harm and determine accordingly how the liability should be allocated among economic operators.
In addition, the updated legal framework expressly includes the following as potentially liable economic operators:
- providers of online platforms, to the extent that a manufacturer cannot be identified, when the defective product is sold through remote contracts concluded on their platforms;
- a person or company who substantially modifies the product (e.g., if the product is repaired or upgraded) outside the manufacturer’s control and then makes it available on the market;
- for products manufactured outside the EU, the importer, the authorized representative, or, in their absence, the fulfillment service provider.
DISCLOSURE OF EVIDENCE AND BURDEN OF PROOF
To strengthen consumer protection, the DLDP revised the rules on disclosure of evidence and on the burden of proof.
The most significant change is that upon request of a counterparty, an economic operator must disclose relevant evidence at its disposal in certain circumstances. Disclosure methods will be determined according to national law, and it is too soon to predict the effect. The early feeling is that this change will have impact on systems like Italy’s where obtaining disclosure of evidence can be burdensome.
Regarding the burden of proof, the DLDP goes a step further toward a stricter regime. It provides that if due to technical or scientific complexity it is excessively difficult to prove a product’s defectiveness or the causal link between the defect and the damage (or both), a court may decide that the claimant is only required to prove the likelihood that the product was defective or that its defectiveness was a likely cause of the damage.
[1] Directive 85/374/EEC.
[2] Manufacturers, distributors, sellers, and so on.
[3] Regulation (EU) 1689/2024.
[4] Proposal for a Directive on adapting non-contractual civil liability rules to artificial intelligence, COM(2022) 496 final 2022/0303 (COD).
[5] According to article 4 of the DLDP, a product is “all movables, even if integrated into, or inter-connected with, another movable or an immovable; it includes electricity, digital manufacturing files, raw materials and software.”
