PRODUCT LIABILITY REFORM IN THE EU

Following a long discussion among professionals, academics and competent authorities, at the end of September 2022, the European Commission published the Proposal for a directive on liability for defective products. In a practical sense, the most significant innovations in the Proposal are the expansion of the definitions of fundamental terms, such as product, producer, defect and damage, and the new provisions that should make it easier for the injured person to initiate proceedings and prove the fulfillment of the conditions for establishing the strict liability of the producer. The reform has several specific goals: to ensure that the liability rules reflect the nature and risks of products in the digital age and circular economy; to ensure that there is always a business based in the EU that can be held liable for defective products purchased directly from manufacturers outside the EU; to ease the burden of proof in complex cases, for example when the damage originates from pharmaceutical products, medical devices and products with a digital component, in which the injured person usually lacks the scientific and technological knowledge and information necessary to prove the existence of defect and the causal link; to ease restrictions on claims (by abolishing the rule that prevents compensation of property damage valued below EUR 500); and to ensure legal certainty by better aligning the rules on product liability with new product safety rules, and by codifying relevant case law. From the producer's standpoint, all of the changes that have been proposed will lead to an increase in the risk of their liability, which may further cause the rise in liability insurance premiums for the producers. It is reasonable to expect the producers to pass the increased costs of their liability risk on to the consumers.