Co-author: Laura Tibi
The EU has now finally adopted the Product Liability Directive – the last step was its adoption by the European Council on October 10, 2024. The next step is its publication in the Official Journal of the European Union; it will enter into force 20 days after publication (cf. Art. 19) and is to be implemented by the EU member states within 24 months, i.e. by the end of 2026 (cf. Art. 18).
The adopted directive contains only a few changes compared to the proposal from January 2024. These adjustments mainly concern linguistic changes as well as clarifications and clearer formulations of individual regulations.
The following is a brief excerpt of some changes:
- Repeal of Directive 85/374/EEC has been included in the title
(Previously, the repeal was only included in Art. 17 (Repeal and transitional provision) of the proposal
- “This Directive does not apply to damage arising from nuclear accidents (…)” (Article 2 Nr. 3)
Previously: “This Directive shall not apply to damage arising from nuclear accidents (…)” (Article 2 Nr. 2 of the proposal)
- “The right to compensation pursuant to Article 5 shall cover all material losses resulting from the damage referred to in paragraph 1 of this Article.” (Article 6)
“The right to compensation shall cover all material losses resulting from the damage referred to in paragraph 1.” (Article 5a of the proposal)
- “A product shall be considered defective where it does not provide the safety that a person is entitled to expect or that is required under Union or national law.” (Art. 7 para. 1)
“A product shall be considered defective when it does not provide the safety that a person is entitled to expect or that is required under Union or national law.” (Art. 6 para. 1 of the proposal)
The new Product Liability Directive (“PLD”) 2024 will replace the previous PLD from 1985, which aimed to distribute risks within modern, mass, and sometimes complex production processes fairly and introduced strict liability for defective products. The PLD 2024 updates product liability by including digital products such as software and artificial intelligence (AI) as well as new actors in globalized supply chains.
Strict liability for the digital age
In the future, software and AI manufacturers will also be strictly liable for defects in their products. Likewise, fulfillment service providers and online platforms will be liable for defective products whose sale they support, for example, by storing, packaging, transporting, or enabling B2C distance sales contracts. The European Council published the final compromise text of the new PLD on January 24, 2024, following the informal trilogue negotiations. The update of the Product Liability Directive was prompted by developments in digitization (who is liable for software/AI errors?), the circular economy (who is liable for recycled products put on the market?), and globalization (who is liable when the manufacturer is unreachable within the EU?).
Product compliance and product liability go hand in hand
The new PLD is part of an ambitious regulatory program, which includes the General Product Safety Regulation (a key piece of EU product law), the revised Ecodesign Directive (with the Right to Repair Directive), and the potential AI Liability Directive (with its rules on proof). It supplements public product law with civil liability rules and will replace the current Directive 85/374/EEC in 2026. During a transitional period, both frameworks may apply in parallel, depending on the product’s time of placement on the market. The PLD 2024 stresses the alignment with product compliance rules by repeatedly referencing “relevant product safety requirements, including safety-relevant cybersecurity requirements.” This is particularly relevant for:
- assessing the defectiveness of a product,
- presuming defectiveness in case of lacking product compliance, and
- determining whether a “substantial modification” of a product after its placing on the market has occurred, which could restart the liability period for product liability claims.
Tightening of product liability on several levels
- Substantively, the PLD applies to all moveable defective products – including electricity and raw materials (as before) and, newly, expressly to digital construction data and software. However, small software manufacturers can contractually exclude recourse by the final manufacturer.
- Personally, the directive no longer applies only to manufacturers – it also includes final product manufacturers, component manufacturers, importers, quasi-manufacturers, and suppliers. In a globalized world, the directive expands liability beyond the manufacturer to include economic operators like fulfillment service providers and online platforms. Additionally, it extends the liability cascade if the manufacturer or other primary liable entities are not reachable, ensuring an available liable entity for injured parties.
- Financially, the new directive expands the scope of recoverable damages: it now covers medically recognized damage to mental health, as well as the destruction or irreversible damage to data. The previous deductible of EUR 500 and the previously possible liability cap are abolished.
Reassessing risks within the supply chain
Product liability for goods placed on the EU market will thus be tightened on several fronts. Implementation is expected by 2026. Manufacturers, as well as fulfillment service providers and online marketplaces, will need to reassess their product liability risks within supply chains, potentially adjust their insurance coverage, and renegotiate contractual responsibilities to align with the new liability requirements.
For details, see
- on the new PLD the synopsis (in English) here, which concludes the article on the new PLD here (in German) published in the Zeitschrift für Product Compliance
- on the right to repair our article here;
- on the new packaging regulation our article here
