The current Product Liability Directive dates back to 1985, and after 38 years the directive can be called old. We have written a blog about this directive on July 20, 2021. The European Commission has presented a proposal for a new directive. This blog will discuss the main changes of the new directive.
Tightening up for manufacturers and importers
The old Product Liability Directive covered movable property and electricity. In today's digital world, it is conceivable that software and artificial intelligence (AI) can also cause damage to consumers. The new directive will therefore include software, AI and digital production files within its scope. If damage is caused by a software update, it can be recovered from the producer.
Broadening principles of product liability
A producer is liable under product liability if he has put the product on the market. The new directive adds another possibility. Any natural or legal person, thus including companies such as a private limited company, who modifies a product already placed on the market or put into service, e.g. with a software update is liable. Reason being is that these persons are considered a manufacturer for the purposes of the directive. These persons are only liable if the modification is considered substantial and the modification was made without control of the original manufacturer.
The threshold for liability
Under the old Product Liability Directive, there was a threshold for the damage to be compensated. A consumer had to have at least € 500,- in damage before they could sue the producer under product liability. All damages above € 500,- were compensated. Damages below the amount of € 500,- were not compensated (Article 6:190 of the Dutch Civil Code).
This threshold has been left out of the new directive. There is no minimum damage a consumer must have suffered before they can claim damages from the producer.
Besides the threshold of € 500,-, something else has been left out of the new directive. Under the old directive, there was a cap on recoverable personal injury damages of € 85.000.000,-. This cap has also been removed. So there is no longer a lower or upper limit to the damages to be claimed.
What has remained the same is that the producer is only liable for damage due to death or physical injury or damage caused by the product to another property.
Lowering threshold of evidence and disclosure of evidence
The threshold for providing evidence will be lowered further. For all damage, there must be a causal link: the effect must have occurred from the cause. So the damage must have occurred due to the product's (mis)use, for which the producer (or supplier) is then liable. Under the new directive, this causal link will be presumed to exist in favour of the party suffering the damage if the damage was caused by a "manifestly defective functioning of the product under normal use". It is up to the producer or supplier to prove that this is not the case.
In addition, the court can force the defendant in legal proceedings to disclose all relevant evidence. The aim of the European Commission is to address the asymmetric distribution of information between manufacturers and consumers. After all, manufacturers have much more knowledge about how the product in question was produced and marketed.
When will this directive enter into force?
This directive has not yet entered into force at the time of writing this blog. When it does come into force, the old directive will be repealed. Note that the new directive has to be implemented into national legislation by the member states, including the Netherlands. For the Netherlands, this means amending the current provisions in the Dutch Civil Code.
Do you have questions about product liability and the consequences of the new directive for you or your company? Do you have questions about consumer law or liability in general? Please feel free to contact one of our lawyers.