European Union Adopts the New Product Liability Directive

At a Glance

• The European Council adopted the EU’s new Product Liability Directive on October 10, 2024.
• 20 days after the new Directive is published in the Official Journal of the European Union, the law will go into effect. Member states have two years from this effective date to transpose the directive into national law.
• We anticipate that the current timeline of the new Directive will produce an increase in mass product liability actions around the end of 2026.

We previously reported on the new EU Product Liability Directive (PLD) that will significantly overhaul the EU’s existing product liability directive to conform with the digital era and modern economy. The changes to the EU’s prior directive include, among other things, expanding the definition of a “product” to encompass: (1) software, including software updates and artificial intelligence; (2) digital manufacturing files; and (3) digital services.

On October 10, 2024, the European Council adopted the EU’s new PLD. The Council’s adoption means that the new PLD will enter into force 20 days after its publication in the Official Journal of the European Union, which likely will be by the end of this year. The EU’s 27 member states will then have two years to implement the directive into their national law. Barring any unexpected delays with publication, the product liability landscape will change fundamentally by the end of 2026.

Some key developments in the new PLD are:

• Presumption regarding defect: In our last update, we discussed the shift of the burden of proof on to the defendants through a presumption of defectiveness. This was confirmed in the new PLD.
• Disclosure: With the exception of confidential information and trade secrets, defendants are now under an obligation to disclose any documentation that is ‘necessary and proportionate’ for the claimant to support its claim for compensation. Claimants need only provide ‘facts and evidence sufficient to support the plausibility of the claim’.¹Put simply, Claimants will now have a right to discovery in all member states.
• ‘State of the Art’ Defence: Under the PLD, a manufacturer may assert an affirmative defence that the alleged defect could not have been discovered when the product was placed on the market given ‘the objective states of scientific and technical knowledge’ at that time.² However, member states can choose to omit this defence if this concept is incompatible with national law.³

Alongside the adoption of the PLD, the EU class actions regime was overhauled last year. Since 2023, EU member states have already seen a significant uptick in class actions with the adoption of the Representative Actions Directive (RAD). In addition to anticipating that this general trend will continue, we expect to see a substantial increase in the number of product liability claims filed in the EU following member states’ implementation of the new PLD. It is worth noting, however, that the new PLD will only apply to products placed on the market two years from its official publication date. Any products placed on the market prior to this date will be governed by the prior Product Liability Directive. For instance, if a product is placed on the market next month (November 2024), the existing rules will apply. But if a product is placed on the market in January 2027 (i.e., more than two years following the official adoption date), then the new PLD will apply. Thus, there will be a lengthy transition period between the existing rules and the new PLD, which will require careful navigation by product manufacturers. 

Faegre Drinker has monitored the progress of the new PLD since it was announced, and we will continue to monitor the changing legal landscape in the EU to help our clients identify and evaluate risks globally.