Ten Things to Know About the European Union’s New Product Liability Directive

The following article is republished with permission from Thomson Reuters and was originally published on the Thomson Reuters website on April 11, 2025.

At a Glance

• The European Union’s new product liability directive makes substantive changes that impact manufacturers of consumer products as well as other businesses such as technology and software companies.

After it was initially proposed more than two years ago, the European Union passed a new product liability directive (PLD) on Dec. 9, 2024, which prescribes a new legislative framework to expand and modify product liability laws created by the current PLD (originally enacted in 1985). As with other EU directives, the PLD sets legislative and policy goals that the EU’s 27 member states are obligated to implement into national law. For the PLD, they must do so within two years — by December 2026.

The new PLD was presented during the legislative phase as a modernization of pre-Internet Age laws from the 1980s. But beneath that exterior, the new PLD makes various substantive changes that are likely to increase litigation risk and costs for companies doing business in Europe. These changes will impact not only manufacturers of consumer products traditionally subject to product liability law, but also other businesses such as technology and software companies, which will be subjected to product liability law for the first time.

1. Expanded Environment and Mechanisms for Class Actions and Mass Torts

At the outset, it is important to keep in mind that these substantive changes to product liability law are taking place in a rapidly changing litigation environment.

The EU has also recently enacted the Representative Actions Directive (with the implementation phase closing in June 2023), which obligated EU member states to enact judicial mechanisms to permit class actions and mass actions to a greater degree than previously available in many EU member states.

Among other things, the Representative Actions Directive permits third-party litigation funding (if otherwise consistent with national law) and early data and trends indicate increased filings and activity by plaintiffs’ firms in Europe.

2. Shift of the Burden of Proof Through Presumptions of Defect and Causation

Likely the most concerning feature of the PLD for defendants is its new burden-of-proof framework, which may shift the burden of proof onto defendants through presumptions of defectiveness and causation under certain conditions. Under the PLD, a product will be deemed presumptively defective if: the manufacturer fails to comply with the obligation to disclose information; the product does not comply with mandatory safety requirements; or damage is caused by an obvious product malfunction.

Causation will be presumed where it has been established that the product is defective and that the damage caused is of a kind typically consistent with the defect in question. The PLD also provides that a national court must presume defectiveness, causation or both, where the claimant faces excessive difficulties due to technical or scientific complexity or where the claimant demonstrates that it is likely that the product is defective or that there is a causal link between the defectiveness of the product and the damage, or both.

Considering that civil litigation in EU member states typically operates on a “loser pays” model regarding litigation costs, these changes appear poised to significantly reduce the burden that a plaintiff would need to meet in order to prove a claim. This may fundamentally alter the risks and incentives impacting decisions for claimants to pursue litigation and for defendants to respond to increased risk and litigation burden, including passing additional costs onto consumers.

3. Expanded Definition of a “Product” to Encompass “Digital” Products and Software

A fundamental change under the PLD is an expanded definition of a “product.” This new definition was implemented to “update” product liability law for the digital era by expanding the traditional definition of a product to encompass electronic or software-based programs and services. Specifically, the PLD’s new definition of a “product” will now encompass: (1) software, including software updates and artificial intelligence; (2) digital manufacturing files; and (3) digital services.

This aspect of the PLD may be indicative of a wider global trend. For example, plaintiffs’ firms in the United States have over the last couple of years presented novel theories seeking to apply product liability laws and common law negligence theories to software apps and their underlying algorithms, online platforms services, and other electronic assets.

4. Broader Scope of Liability for Additional Kinds of Defendants Involved in the Stream of Commerce

Relatedly, the new PLD also extends the scope of liability to other actors involved in the stream of commerce. Specifically, if the claimant claims injury from a component of a product, the claimant may seek to hold liable both the manufacturer of the product as a whole and the manufacturer of the specific component at issue. Further, a party that significantly modifies a product and places it on the market or puts it into operation may also be held liable.

For claims involving manufacturers located outside the EU, claimants may bring claims against the importer, the manufacturer’s authorized representative in the EU or the fulfillment service provider. In situations where the manufacturer cannot be identified, a claimant may bring claims against suppliers of the product. Relatedly, liability in some circumstances may be imposed against operators of online marketplaces.

With these expanded liability rules, the new PLD seeks to foreclose potential gaps that would leave claimants without recourse to hold liable someone involved in the stream of commerce for the product.

5. Extended Liability Period for Latent Claims

Manufacturers can face liability up to 10 years for a defective product under the PLD, which is consistent with the 10-year statute of repose in the original PLD. However, the new PLD allows for extending this liability period up to 25 years for personal injury claims premised on latent development of symptoms. The text of the PLD does not articulate in detail the conditions necessary for this latency exception to apply.

6. New Categories of Recoverable Damages

In addition to compensatory damages for personal injury claims and property damage that were previously recoverable, the new PLD recognizes two new categories of recoverable damages: (i) medically recognized psychological harms and (ii) loss or corruption of personal data (including costs to recover lost data).

Additionally, the new PLD removes the existing €500 minimum threshold for bringing property damage claims. By removing this requirement, there is a greater possibility for claimants to initiate litigation for small or even trivial losses, but which could present significant exposure to businesses if such claims are pursued as part of large or multiple simultaneous class actions.

7. Expansion of Post-sale Duties and Liability for Certain Types of Products

The PLD expands the scope of liability to defects that come into being after a product is already on the market if the manufacturer is deemed to have retained control over the product itself or via a third party.

This expansion was implemented to impose liability for alleged defects that arise following software updates to a device or from changes to the product resulting from machine and/or deep learning integrated in the product. Thus, liability could arise for alleged post-sale defects pertaining to: (i) software updates under the manufacturer’s control, (ii) failures to address cybersecurity vulnerabilities, and (iii) artificial intelligence including machine learning.

8. Increased Discovery and Disclosure Obligations

Except for confidential information and trade secrets, the new PLD imposes on defendants an obligation to disclose any documentation that is “necessary and proportionate” for the claimant to support the claim for compensation. Claimants need only provide “facts and evidence sufficient to support the plausibility of the claim,” at which point the defendant’s duty is triggered to disclose documentation “necessary and proportionate” to investigate.

The PLD does not provide specific guidance on how this standard will be applied and it likely presents application challenges for judges, particularly for documentary evidence involving technical and scientific issues.

Considering that discovery and disclosure obligations for civil litigation vary among EU member states, this provision appears likely to increase discovery burdens and litigation costs for defending product liability claims, at least in some EU member states.

9. Potential Limitation of the State-of-the-Art Defense

Under the PLD, a manufacturer may assert an affirmative defense 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. This is typically one of the most important defenses for a defendant in product liability cases, but member states can choose to omit this defense.

As with other aspects of the PLD, the implementation process should be monitored for any significant changes at the national level as it is implemented by the EU’s 27 member states.

10. No Retroactive Effect for Products Already on the Market

With these sweeping changes and replacement of an existing legislative regime, the new PLD does not apply retroactively. Specifically, the new PLD will apply to products introduced to the market after Dec. 9, 2026 — i.e., after the conclusion of the implementation period. Products marketed before this date will be governed by the existing PLD. This two-year period (which started four months ago) is intended to provide businesses and industries time to prepare for the forthcoming changes.

Although the PLD sets forth a clear temporal line for its applicability, some products marketed before the Dec. 9, 2026, trigger date may fall under the purview of the new Directive through its provisions about post-sale modifications, updates or upgrades.