The Product Liability Directive (PLD) is being reformed in a major way for the first time in nearly 40 years.

While it’s still unclear how the reforms will affect UK legislation in the post-brexit era, it is likely that UK manufacturers and insurers will be affected by the significant changes.

The PLD’s main thrust is to extend liability, the potential defendants as well as impacting the rules regarding the burden of proof and disclosure of evidence.

UK manufacturers (and their insurers) should be alive to the issues, which are likely to affect them both in the UK and Europe. Working with legal professionals with the right expertise will be crucial to navigate the new landscape.

 

Changes proposed by the PLD

The new EU Product Liability Directive 2024 replaced the existing 40-year-old directive on 23 October 2024.

The new directive aims to bring the EU’s product liability regime up to speed with the digital age and address the need to ease the burden of proof for consumers seeking compensation due to defective products. The PLD introduces the concept of no fault-based liability of producers for damage caused by defective products.

No fault-based liability means that the liability does not depend on fault or negligence of the manufacturer. To be compensated under the PLD no-fault liability regime, the burden of proof for the injured person consists in showing only that (a) the product was defective; and (b)he/she suffered a damage and (c) there is a causal link between the damage and the product’s defectiveness.

The main provisions revising the existing PLD include:

  • Clarifying that software must be considered a product in the scope of the directive.
  • Product defectiveness will include the lack of software updates under the manufacturer’s control as well as failure to address cybersecurity vulnerabilities.
  • Liability for defective products when refurbished and placed back on the market as well as when manufactured outside the European Union.

A further aim of the New Product Liability Directive is to remove obstacles for consumers. The new directive makes it easier for claimants to bring product liability claims for defective products. It includes a wider definition of “defectiveness”; a shift in the claimant’s favour regarding the burden of proof and increased disclosure obligations for defendants.

The new directive also limits some of the existing exemptions from liability. The long-stop is extended from 10 to 25 years in cases of latent damage. As a result, product liability claims generally no longer expire 10 years after the product is placed on the market.

 

How this is likely to impact UK manufacturers and their insurers

Although the UK has left the EU, UK businesses exporting to the EU will need to ensure compliance with the directive. That’s likely to involve adapting product designs, updating safety protocols, and maintaining detailed records to demonstrate compliance.

Furthermore, the UK is likely to align its own product liability laws with the directive to facilitate trade and ensure high standards of consumer protection.

 

Conclusion

Legal advice to prepare for the enhanced risks and combating cases affected by the new directive will be imperative for manufacturers and their insurers.

The directive introduces significant changes. It broadens the definition of products to encompass software /AI systems and extends liability to include digital services. The scope of liable parties is expanded, introducing new disclosure obligations and easing the evidentiary requirements for claimants. In broad terms the new directive will create greater risks and obligations for manufacturers (and their insurers) regarding product liability claims.