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Update on the European Product Liability Directive – Still Alive & Kicking

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The European Commission has determined that, in broad terms, the Product Liability Directive, which has been in place for over 30 years, is still fit for purpose but requires further work. As we explain below, the Commission, in its recently issued report (available here), has confirmed the aspects of the Directive which it believes require further clarification and work, and how it intends to use the expert group it is currently establishing to reach a final position by mid-2019.

Key conclusions in the report

The European Commission concluded that the Product Liability Directive remains an adequate tool. However:

  • there are a number of areas where further clarification is required (for example, clarification concerning the meaning of “defect”, “damage”, “product”, “producer” and the burden of proof);
  • further work is required to assess how the product liability framework should apply given the “digital industrial revolution” (taking into account digitisation, the Internet of Things, artificial intelligence and cyber security etc.); and
  • the European Commission plans to look more closely at certain products, such as pharmaceuticals “due to their complexity” and refurbished products “due to their altered nature”.

Next steps

The European Commission is setting up an expert group to advise further on the Product Liability Directive. The expert group will be made up of two parts; one to look at the implementation of the Product Liability Directive and the other to look specifically at new technologies.

The European Commission’s aim is, in mid 2019, to:

  • draw up comprehensive guidance on how to apply the Product Liability Directive today (for example, the report highlights the value of guidance to clarify concepts such as “defect” to improve the effectiveness of the Directive); and
  • assess the extent to which the current Product Liability Directive adequately addresses emerging digital technologies and produce a report, for example, concerning any potential gaps in the liability and safety frameworks for artificial intelligence, the Internet of Things and robotics.

The European Commission said that, if necessary, it will update certain aspects of the Product Liability Directive, for example, “product”, “defect” or “damage”. However, the overall principle of strict liability will remain intact.

Comments

Given that technology is continuing to develop at a fast pace, we see real value in developing non binding guidance (rather than introducing legislative changes) to clarify issues, such as:

  • the circumstances in which software constitutes a product and is therefore covered by the Product Liability Directive; and
  • what constitutes a defect.

Guidance can be updated much more quickly than introducing legislative changes. Further, guidance can include more detail about particular types of products, which would not be possible in the Directive itself, given that it is intended to cover a very broad range of products.

We also agree that new and emerging technologies pose particular challenges and careful consideration should be given to how to address those challenges in a way which is consistent with other work being undertaken at an EU level.

 

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Kate Corby is a partner in Baker McKenzie’s Dispute Resolution team in London. Kate has over two decades' experience of representing clients in complex litigation and arbitration, with a focus on arbitration of construction, engineering and infrastructure related disputes. She has handled arbitrations under the rules of all of the major arbitral institutions and ad hoc, seated in London and around the world and under a wide range of governing laws. Kate also has significant experience in advising on product liability, safety and regulatory compliance. Kate co-leads the firm's Industrials, Manufacturing and Transportation Industry Group in EMEA.
Kate is also well-known for her inclusion, diversity & equity work, particularly for organising the London chapter of #Arbitration Lunch Match, sitting on the Global Executive Committee of the Equal Representation of Experts Pledge, and she is co-chair of the London office's BakerWomen Affinity Group.
Kate is ranked as a Leading Individual in Legal 500 UK in both her practice areas in which she is described as “hugely impressive, extremely bright and on-the-ball, and has a deep understanding of the client’s needs and what really matters on the case. She is simply brilliant.” Kate is also individually ranked by Chambers, which notes she has “excellent commercial awareness and vision” and “provides excellent industry insight and customer service.” Kate is also recognised in Who’s Who Legal.

Author

Jo is a senior associate in Baker McKenzie's Dispute Resolution team in London. Jo advises clients in a wide range of industries on complex commercial disputes and investigations. She also regularly provides specialist product safety and regulatory compliance advice and acts for clients in product liability disputes. One of Jo's other areas of specialism is advising clients on a wide range of regulatory, public and administrative law issues, including judicial review, consultations, freedom of information and public procurement. Jo's practice often involves drawing on crisis management experience to help clients protect their reputations and shareholder value when dealing with urgent, time pressured issues and/or intense public scrutiny. Jo was ranked as a Next Generation Lawyer in the Legal 500 Product liability: defendant category in 2017. Jo has participated in the UK Government's Working Group on product safety and recalls and has assisted with the development of the Government's training programme for Trading Standards Officers on the new UK Code of Practice for Product Recalls.

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