Sources of law

Product liability statutes

Is there a statute that governs product liability litigation?

The Product Liability Directive (85/374/EEC) (PLD) creates an EU-wide strict liability regime (ie, no fault) for defective products.

As a directive, the PLD is implemented by EU member states under their national laws.

The PLD seeks to achieve maximum harmonisation of the national laws of member states in relation to the matters it regulates. That said, there are several matters left to the discretion of member states including whether to implement the cap on damages by identical items allowed under the PLD, whether to derogate from the development risk defence and rules related to non-material damages.

The PLD does not preclude other causes of action under national law that are outside the scope of the matters it regulates, provided that those national laws are not inconsistent with the operation of the PLD (Novo Nordisk Pharma GmbH (Case C-310/13).

Traditional theories of liability

What other theories of liability are available to product liability claimants?

Other theories of liability available to product liability claimants in the EU are established under national laws and commonly include negligence (ie, fault-based liability) or breach of contract.

Depending upon the procedural rules of member states, claimants often plead these claims in the alternative to a strict liability claim under the PLD.

Consumer legislation

Is there a consumer protection statute that provides remedies, imposes duties or otherwise affects product liability litigants?

The EU product liability regime that provides a mechanism for claimants to obtain compensation for damage caused by defective products is complemented by EU product safety rules to ensure that products placed on the EU single market provide a high level of safety and EU consumer protection rules to provide remedies to consumers where products do not comply with the contract of sale.

 

Product safety

The EU product safety framework imposes various duties on a range of actors in the supply chain, including the manufacturer, the importer into the EU and the distributor. Reforms in this area are increasingly looking to also impose a level of obligations on online marketplaces.

The product safety framework is governed at the EU level by horizontal and vertical regulations and directives.

The General Product Safety Directive (2001/95/EC) (GPSD) lays down horizontal requirements generally applying to consumer products, with the exception of several product categories that are separately regulated (such as medical devices, pharmaceuticals and food).

Building off the GPSD are vertical sector-specific directives and regulations setting down specific safety requirements for certain products such as motor vehicles, low-voltage electrical equipment, radio equipment, toys, machinery, cosmetics, personal protective equipment and many more. 

The GPSD is often described as a safety net and applies to products in scope insofar as there are no specific provisions with the same objective, and to risks not covered by the sector-specific vertical measures.

In addition, there are also a number of other horizontal measures that cut across the product categories, such as legislation concerning chemicals and other hazardous substances.

These pieces of legislation set down various obligations, including:

  • requirements for product safety;
  • requirements for traceability and information that must accompany products (eg, warnings and instructions);
  • rules for demonstrating conformity with the applicable requirements; and
  • post-market obligations including monitoring, requirements to notify authorities and take corrective actions in respect of product safety issues.

 

There is no EU-wide authority for product safety (although there are EU-wide agencies in some areas such as medicines and chemicals). Enforcement takes place at a national level.

 

Consumer rights and remedies

EU consumer laws aim to give consumers the ability to seek remedies where a product they have purchased does not comply with the contract of sale. The Consumer Sales and Guarantees Directive (1999/44/EC) provides that a seller (‘any natural or legal person who, under a contract, sells consumer goods in the course of his trade, business or profession’) is liable if the product does not conform with the contract of sale, where such lack of conformity existed at the time the goods were delivered. A product is presumed to be in conformity with the contract of sale if it:

  • complies with the seller’s description and possesses the qualities of the goods held out to be a sample or model;
  • is fit for any particular purpose that the consumer required and was made known to the seller;
  • is fit for the purpose that products of that type are normally used; and
  • shows the quality and performance normal in goods of the same type and which the consumer can reasonably expect given the nature of the product, and taking into account statements made in advertising or on labelling.

 

The remedies available to a consumer where a product does not conform are, in the first instance, to have that product brought into conformity by the seller by repair or replacement, or failing that a reduction in price or rescission of the contract (in practice a refund). This right exists for a minimum of two years from delivery of the product. However, this period may be extended under the national laws of member states and can vary between member states. The directive also allows member states to include a pre-condition under their national laws that a consumer must inform the seller of the lack of conformity within two months of detecting it to benefit from these rights.

Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods will repeal and replace the Consumer Sales and Guarantees Directive from 1 January 2022. It will apply to goods and the digital content or digital services incorporated in or interconnected with those goods. It sets out objective and subjective requirements for conformity and retains the two-year minimum guarantee period (from the time of delivery).

In addition, Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services will also come into effect on 1 January 2022 that lays down rights for consumers in respect of digital content and digital services not incorporated in or interconnected with goods.

Criminal law

Can criminal sanctions be imposed for the sale or distribution of defective products?

The PLD imposes civil liability and does not extend to criminal liability.

However, criminal liability may be imposed under the national laws of member states that determine the enforcement and penalties for non-compliance with product safety laws.

Novel theories

Are any novel theories available or emerging for product liability claimants?

Case law surrounding the liability of third parties involved in the product compliance process, such as notified bodies, has been developing in the EU.

In the 2017 case of Elisabeth Schmitt v TÜV Rheinland LGA products GmbH (C 219/15), the Court of Justice of the European Union (CJEU) held that the purpose of the notified body’s involvement in the procedure relating to the declaration of conformity under the Medical Devices Directive 93/42/EEC was to protect end-users. However, the conditions under which culpable failure by that body may give rise to direct liability to claims issued by end-users is governed by national law.

Product defect

What breaches of duties or other theories can be used to establish product defect?

Under article 6 of the PLD, a product is defective if it does not provide the level of safety that a person is entitled to expect, taking into account all relevant circumstances, including:

  • the presentation of the product;
  • the use to which it could reasonably be expected that the product will be put; and
  • the time that the product was put into circulation.

 

The PLD expressly provides that a product is not to be considered defective for the sole reason that a better product is subsequently put into circulation.

Generally, liability can result from several types of defect, including:

  • design defects, whereby a defect is inherent based on the design of the product;
  • manufacturing defects, whereby an error was introduced during the manufacturing process; and
  • marketing defects, where there is inadequate labelling or marketing to warn consumers of risks.
Defect standard and burden of proof

By what standards may a product be deemed defective and who bears the burden of proof? May that burden be shifted to the opposing party? What is the standard of proof?

Under article 6 of the PLD, a product is defective if it does not provide the level of safety that a person is entitled to expect, taking into account all relevant circumstances, including:

  • the presentation of the product;
  • the use to which it could reasonably be expected that the product will be put; and
  • the time that the product was put into circulation.

 

This is an objective standard based on what persons generally are entitled to expect, rather than what the consumer actually expected.

The PLD expressly provides that a product is not to be considered defective for the sole reason that a better product is subsequently put into circulation.

In Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt Die Gesundheitskasse (C-503/13) and Betriebskrankenkasse RWE (Case C-504/13), the CJEU held that for certain products, the level of safety a person is entitled to expect is particularly high, due to the inherent function of the product, the vulnerability of the user or the abnormally high potential for damage. In that case the products were a pacemaker and cardioverter-defibrillator. The CJEU held that for such products where the level of safety a person is entitled to expect is particularly high, if it is found that products belonging to the same group or forming part of the same production series have a potential defect, it may be possible to classify other products in the same group or series as defective without the need to establish that the product in question has a defect.

Under article 4 of the PLD, the claimant is required to prove the damage, the defect and the causal relationship between the two. Evidentiary rules required to discharge the burden are determined at a national level and can differ across EU member states. In NW et al v Sanofi Pasteur MSD SNC (Case C-621/15) the CJEU held that the PLD does not preclude member states from determining the most just evidentiary rules, provided the application of those evidentiary rules does not result in the burden of proof set out in article 4 of the PLD being disregarded, or the effectiveness of the system of liability introduced by the PLD being undermined.

Possible respondents

Who may be found liable for injuries and damages caused by defective products? Is it possible for respondents to limit or exclude their liability?

Under the PLD, the ‘producer’ is potentially liable for injuries and damages caused by a defective product. The definition of a producer may capture several entities within the supply chain – under article 3, the producer is defined as ‘the manufacturer of a finished product, the producer of any raw material or the manufacturer of a component part and any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer’. The definition of producer is also extended to include the person who imports the product into the EU, as well as a supplier who does not disclose the identity of the person who supplied them with that product within a reasonable time, when requested.

These above-mentioned entities can be held jointly and severally liable under the PLD, without prejudice to national laws concerning the rights of contribution or recourse.

Causation

What is the standard by which causation between defect and injury or damages must be established? Who bears the burden and may it be shifted to the opposing party?

Under article 4 of the PLD, the claimant is required to prove the damage, the defect and the causal relationship between the two. Evidentiary rules required to discharge the burden are determined at a national level and can differ across EU member states. In NW et al v Sanofi Pasteur MSD SNC (Case C-621/15), the CJEU held that the PLD does not preclude member states from determining the most just evidentiary rules, provided the application of those evidentiary rules does not result in the burden of proof set out in article 4 of the PLD being disregarded, or the effectiveness of the system of liability introduced by the PLD being undermined.

Post-sale duties

What post-sale duties may be imposed on potentially responsible parties and how might liability be imposed upon their breach?

The EU product safety framework imposes a number of post-sale duties, including: obligations to monitor, commence corrective action and obligations to notify regulatory authorities.

These obligations are set down in the General Product Safety Directive (2001/95/EC) (GPSD) and various sector-specific vertical measures. The answer below focuses on the obligations under the GPSD. However, any applicable sector-specific vertical legislation should also be consulted.

 

Obligation to monitor

The GPSD requires producers to adopt measures commensurate with the characteristics of the products they supply to enable them to be informed of the risks their products may pose. This includes sample testing, investigating any complaints and keeping distributors informed of these monitoring exercises. To assist producers, the GPSD requires distributors, within the limits of their activities, to assist with monitoring the safety of products by passing on information on product risks.

 

Obligations to commence corrective action

Under the GPSD, producers must take appropriate action to deal with risks. As a last resort, this may mean conducting a recall from consumers. In less serious cases, other corrective measures may be sufficient, such as withdrawal from the supply chain or providing warnings to consumers.

The measures taken to deal with a product safety issue should be commensurate with the level of risk posed. To determine the level of risk, a risk assessment is carried out. Guidance published by the European Commission sets out a methodology that is routinely adopted for this purpose (see Commission Implementing Decision (EU) 2019/417 laying down guidelines for the management of the European Union Rapid Information System ‘RAPEX’ and the EU General Risk Assessment Methodology (COM(2013)76), last updated in June 2016). Under this risk assessment methodology, the risk can be assessed as low, medium, high or serious.

There are no fixed rules as to what corrective action will be required for each level of risk, and the specific circumstances of each case need to be taken into account. Guidance published by PROSAFE, the professional organisation for market surveillance authorities, provides guidance on what action may be appropriate to deal with different categories of risk as follows:

  • low risk: normally not requiring action for products on the market (however, other corrective actions affecting products in design and production may be appropriate);
  • medium risk: normally requiring some action;
  • high risk: normally requiring rapid action; and
  • serious risk: normally requiring immediate action.

 

Obligations to notify regulatory authorities

The GPSD requires producers and distributors to ‘immediately inform’ the competent authorities of the member state in which the products in question are, or have been, marketed or otherwise supplied to consumers if they ‘know or ought to know on the basis of information in their possession’ that the product is incompatible with the general safety requirement.

The European Commission has an online system (through the Product Safety Business Alert Gateway, formerly known as the Business Application) to enable the EU-wide notification of the authorities in all impacted member states. The authors recommend that advice is obtained when completing this form. Some member states also require specific forms to be completed.