The European Parliament has recently adopted the new Product Liability Directive, which is currently waiting for formal approval by the Council. The new directive envisages a comprehensive overhaul of the European product liability regime after 35 years, aiming to bring the liability of manufacturers for defective products in line with the challenges posed by the digital economy.
Important changes introduced by the Directive include, among others, the widening of the definition of products to include software, extending the definition of damages to include "medically recognised harm to psychological health”, and ensuring that manufacturers can be held liable for changes they make to already launched products, like software updates. In short, we will get one step closer to the ever elusive goal of enforcing damages claims for the emotional trauma caused by the loss of our progress in a mobile app game due to an automated software update.
If you are no gamer but director of a manufacturing company threatened by product liability suits, the prospects are bleaker. What may cause the most headache to you is the provision aiming to empower national courts to order – upon the injured person’s request – the defendant to “disclose relevant evidence that is at its disposal”. That is, your company may be obliged to hand over to the claimant all relevant evidence it has, even if it seems detrimental to your case. Should you fail to comply with the court’s order, the defectiveness of the product – normally to be proven by the claimant – shall be presumed.
There are of course numerous limitations to this general rule, including requirements of proportionality and necessity, and provisions aimed at the protection of trade secrets. While the details will need to be worked out by the Member States and their courts, the disclosure obligation in itself invokes the specter of a US-style discovery regime, a world in which defendants will be forced to hand over large amounts of documents to the claimant, including (sometimes embarrassing) internal communications concerning the process of designing, manufacturing and testing the product so that the claimant can look for a “smoking gun”.
Luckily, TaylorWessing Hungary’s dispute resolution team is already well-prepared for such a situation: our hands-on experience in US-based litigations with broad-scale discovery procedures, and our work in international commercial arbitration cases where similar kinds of document disclosure procedures have long been used leave us well-equipped to guide our clients through the maze of discovery to the harvest of favorable judgements, and hopefully ensure that these particular discoveries will end in earnest thanksgivings.
