Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions

General climate and recent developments

State of Legal Development

In general terms, how developed are the product regulation and liability laws in your jurisdiction?

The European Union is a supranational political body made up of individual nations (ie, member states), and it has highly developed laws and regulations addressing product liability and product safety.

EU law is divided into primary and secondary legislation. EU treaties are primary legislation and form the basis for all EU action. Secondary legislation, which includes directives and regulations, is derived from the principles and objectives set out in the treaties. The European Union can only pass laws that meet or serve the objectives authorised under the treaties. Two objectives of particular relevance to product liability and product safety laws are “the proper functioning of the internal single market” and “consumer protection”.

The EU legislative regime in place for product safety and liability has been designed to:

  • offer consumers greater protection in respect of defective products;
  • increase consumers' awareness of their rights; and
  • assist consumers to obtain legal redress.

In this context, the most important directives are the Product Liability Directive (85/374/EEC) and the General Product Safety Directive (2001/95/EC).

The Product Liability Directive was adopted on July 25 1985 and introduced a uniform system of no-fault liability for defective products. It applies to any product marketed in the European Economic Area.

Recent developments

Have there been any notable recent developments in relation to product liability law and product safety law in your jurisdiction, including any regulatory changes and case law?

Review of the Product Liability Directive

As the Product Liability Directive had not been subject to review for some years, and given rising concerns that it may not adequately address the challenges raised by new technological developments (eg, the Internet of Things and autonomous systems), on January 10 2017 the European Commission launched a public consultation to collect stakeholders' feedback and evaluate whether the directive is "fit for purpose". This involved assessing the effectiveness, efficiency, coherence and relevance of the directive, as well as determining whether the directive provided clear added value. The public consultation ran until April 26 2017 and the European Commission published the results in May 2017.

Alongside this public consultation, the European Commission also carried out a targeted survey and face-to-face interviews with different categories of stakeholder (eg, producers, industrial associations, consumer associations, insurers, public authorities, law firms, consultancy firms and academics). Following this consultation, the commission released its fifth report on the application of the Product Liability Directive on May 7 2018. The report highlighted a number of the commission's findings following its assessment of the directive and concluded that there is a need to clarify and possibly update the directive. The commission found that traditional concepts in the directive, while clear cut in 1985, are less so today, including:

  • the concepts of ‘product’, ‘producer', ‘defect’ and ‘damage’ may need to be re-evaluated to align with modern industry, which is "increasingly integrated into dispersed multi-actor and global value chains with strong service components";
  • refurbished and repaired products may need to be directly addressed, as the report stated: "Who will be the manufacturer… in the case of repair, reuse and refurbishment?"; and
  • in light of the General Data Protection Regulation, the commission addressed the overlap between product liability and cybersecurity and stated that: "Consumers and businesses need to be aware of the security levels they can expect, and they need to know who to turn to if a failing in cybersecurity leads to material damage".

The report concluded that, following the evaluation, the European Commission will provide guidance on the Product Liability Directive by mid-2019, with two expert groups working alongside the commission to help future-proof the directive and potentially make legislative amendments. Further developments are expected in the coming months.

Product harmonisation legislation

Following a consultation that ran from July to October 2016, on December 19 2017 the European Commission published a proposal for a new regulation on compliance and enforcement in relation to product harmonisation legislation. The new regulation aims to create a fairer internal market for goods and enhance market surveillance within the European Union.

The main changes proposed by this regulation are:

  • introducing a requirement for a ‘person responsible’ for compliance information and for his or her identity and contact details to be made publicly available. The person responsible will be obliged to:
    • keep any required EU declaration of conformity and technical documentation at the disposal of market surveillance authorities;
    • provide information and documentation necessary to demonstrate conformity; and
    • cooperate with market surveillance authorities where needed;
  • reinforcing the obligations of member states in relation to the organisation of market surveillance within their territories and laying down the procedures they must establish to:
    • follow up on complaints;
    • monitor accidents;
    • verify corrective actions being taken by economic operators; and
    • follow up on scientific and technical knowledge of safety issues;
  • providing market surveillance authorities with greater powers to ensure more effective enforcement of EU harmonised product legislation across borders;
  • fostering greater cooperation between national market surveillance authorities by enabling them to request information on potential non-compliance and ongoing investigations from each other and enabling them to request that another national market surveillance authority take enforcement measures against non-compliance; and
  • providing a strengthened framework for controls on products entering the European Union by enabling national authorities to carry out improved checks on products and have a more effective exchange of information with customs authorities.

Recent case law

The European Court of Justice (ECJ) recently gave its first substantive guidance on the important issues of defect and causation under the Product Liability Directive in two decisions: Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt Die Gesundheitskasse (C-503/13) and N W v Sanofi Pasteur MSD SNC (C-621/15).

In Boston Scientific, the court considered whether for the purposes of proving a ‘defect’ under Article 6(1) of the Product Liability Directive, it was possible to prove that a product which belonged to the same group or production series was defective on the basis of an unacceptably high failure rate applicable to all products in that group. The case concerned implantable cardioverter defibrillators and pacemaker devices whose failure rate was significantly outside of specification. The case was brought by a health insurer which sought to recover the costs of the surgical operations to replace the devices as damages recoverable under the Product Liability Directive. The ECJ found that in all the circumstances, the high failure rate was sufficient to prove that any product in the group was defective, and that the costs of replacement were recoverable. In so doing, the ECJ stated that persons are entitled to expect "particularly high" safety requirements for such products because of the "particularly vulnerable situation" of patients implanted with such devices. However, the ECJ did not provide guidance as to how its decision might apply to other types of product. Some commentators have suggested it will make it easier to prove defect in future cases, such as those involving medical devices or pharmaceutical products, particularly where it can be shown that such products carry an increased risk of harm. However, this does not necessarily follow from the reasoning of the ECJ, which clearly decided the case on its own facts. Significantly, in this case the court was concerned with implantable medical devices which performed life-sustaining functions and which the manufacturer itself had admitted had an unacceptable rate of failure.

In Sanofi, the ECJ examined the requirement under Article 4 of the Product Liability Directive that a claimant must prove that his or her injury was by a defect in the product. The case concerned a vaccine for hepatitis which the claimant alleged caused multiple sclerosis. The French courts had previously allowed proof of causation by way of "evidentiary presumptions" in cases such as this, where the patient had no family history of the disease and the onset of the disease followed soon after the vaccine was given. This enabled claimants to establish causation even though there was a notable lack of scientific or medical evidence that hepatitis could actually cause multiple sclerosis. The ECJ held that the national courts have a wide discretion to determine what evidence a claimant has to present to prove causation, subject only to ensuring that the evidential requirements do not have the effect of reversing the onus of proof under Article 4 of the Product Liability Directive. The ECJ considered that in this case, the use of presumptions was permissible under Article 4 of the Product Liability Directive.

Legal framework

Legislation

What primary and secondary legislation governs product safety and liability in your jurisdiction?

Product liability

The primary legislative network governing product liability in the European Union is the Product Liability Directive (85/374/EEC). The Product Liability Directive introduced a non-exclusive system of no-fault liability for defective products, meaning that liability will fall to producers and suppliers based on the defective condition of a product, without there being any need to establish fault or negligence on their part. The system of liability under the Product Liability Directive sets a minimum level of protection for consumers and those affected by products put on the market in the European Union. Pursuant to Article 13, liability established under the Product Liability Directive does not exclude other rights that an injured person may have under existing national laws that were in place when the directive was adopted. Thus the Product Liability Directive is meant to operate alongside the national product safety and liability laws of the member states. This means that claimants in each member state may have various other rights and avenues to establish liability (eg, those based on contract and tort), the nature of which will differ between member states.

Product safety

The primary legislative network governing product safety in the European Union is the General Product Safety Directive (2001/95/EC).

Some products are governed by sector-specific directives or other EU-based legislative measures. This includes products such as:

  • toys;
  • cosmetics;
  • food;
  • pharmaceuticals;
  • medical devices;
  • motor vehicles;
  • low-voltage electrical products;
  • machinery; and
  • personal protective equipment.

Where consumer products are not covered by a sector-specific measure, the General Product Safety Directive will apply. The General Product Safety Directive was implemented for the purpose of protecting consumer health and safety and to ensure the proper functioning of the internal market by ensuring a high safety level for consumer products in the European Union. A horizontal general safety requirement therefore exists under the General Product Safety Directive, the central requirement being that all consumer products placed on the EU market must be safe.

Article 6(1) of the General Product Safety Directive requires member states to enforce the central safety requirement; Article 2(b) of the General Product Safety Directive defines what is considered a ‘safe’ product. The following factors are taken into account:

  • the characteristics of the product, including its composition, packaging, instructions for assembly, installation and maintenance;
  • the effects on other products, where it is reasonably foreseeable that it will be used with other products;
  • the presentation of the product, its labelling, any instructions for its use and disposal and any other information provided by the producer; and
  • the categories of consumer at serious risk when using the product – in particular, children and the elderly.

Under Article 2(c), any product that does not meet the definition of a safe product is classified as dangerous.

A further useful resource for understanding product safety in the European Union is the “Guide to the implementation of directives based on the New Approach and the Global Approach” (more commonly known as the ‘Blue Guide’), which was first published by the European Commission in 2000. The most recent version of the Blue Guide is the "Blue Guide on the implementation of EU product rules" published by the European Commission in July 2016.

Regulatory and enforcement authorities

Which government authorities regulate and enforce product safety and liability laws in your jurisdiction, and what is the extent of their powers?

There is no centralised EU regulatory body for product safety. Each member state must appoint a ‘competent authority’ in charge of market surveillance and enforcement. Nevertheless, the European Commission has an overarching responsibility and has specific powers to ensure the competent authorities fulfil their duties.

Competent authorities in each member state are responsible for surveillance of their national market and for taking enforcement action for infringement of the national legislation implementing the General Product Safety Directive. To do so, competent authorities have specific powers to:

  • organise appropriate safety checks on products, even after they have been placed on the market;
  • require all necessary information from the parties concerned;
  • take samples of products and subject them to safety checks;
  • require suitable warnings to be affixed to products;
  • ensure that appropriate persons can be informed of risks quickly (eg, by the publication of special warnings);
  • ban the sale of a product if it has proved dangerous and establish the accompanying measures needed to ensure compliance with the ban; and
  • order or organise the immediate withdrawal or recall of a dangerous product that is already on the market and, if necessary, organise its destruction.

Member states must notify the European Commission (and other member states) when that member state:

  • restricts the placing on the market of products, or requires a product to be withdrawn or a recall performed (Article 11 of the General Product Safety Directive); or
  • adopts, recommends or agrees with producers or distributors any measures or actions relating to products that present a serious risk, where the effect of those actions or measures may go beyond its own territory (Article 12 of the General Product Safety Directive).

If a member state is required to take action or adopt a measure under Article 12, the member state must immediately notify the European Commission via the Rapid Alert System for Non-Food Products (RAPEX) system. The member state must also inform the European Commission of any modification or withdrawal of any such measure or action.

The European Commission has powers under Article 13 of the General Product Safety Directive to require member states to adopt certain measures where it becomes aware of a product posing a serious risk to consumers. The measures include:

  • requiring suitable warnings to be affixed to products;
  • ensuring that appropriate persons can be informed of risks quickly (eg, by the publication of special warnings);
  • banning the sale of a product if it has proved dangerous and establishing the accompanying measures needed to ensure compliance with the ban; and
  • ordering or organising the immediate withdrawal or recall of a dangerous product that is already on the market and, if necessary, organising its destruction.

The European Commission can adopt a decision to require the relevant member states to take such measures only if:

  • it emerges from prior consultations with the member states that they differ significantly on the approach adopted or to be adopted to deal with the relevant risk;
  • the risk cannot be dealt with in a manner compatible with the degree of urgency of the case under other procedures laid down by the EU legislation applicable to the products concerned; and
  • the risk can be eliminated effectively only by adopting appropriate measures applicable at EU level.

Liability

Product defects

How is a ‘product defect’ defined in your jurisdiction?

Under Article 6 of the Product Liability Directive (85/384/EEC) a product is considered defective if, in all relevant circumstances, "it does not provide the safety which a person is entitled to expect". This is not a question of what safety expectations are held by the claimant but what safety expectations the public at large is "entitled" to hold. Circumstances relevant to the consideration of whether a product is defective include:

  • the presentation of the product;
  • the reasonably expected use of the product; and
  • the time when the product was supplied.

Article 6(2) of the Product Liability Directive also establishes that a product will not become defective simply because a better product is subsequently put into circulation.

Causation and burden of proof

How is causation of loss or damage established in relation to product liability claims and where does the burden of proof lie? Can this burden be shifted in any way?

Article 4 of the Product Liability Directive makes it clear that the burden of proof to establish the primary elements in a product liability claim (ie, defect, damage and the causal relationship between the two) lies with the claimant. However, the way that burden must be discharged, in terms of the evidence required, will vary between member states. For instance, in the recent Sanofi decision the European Court of Justice held that claimants can rely on certain national evidentiary rules (eg, presumptions that draw on factual evidence) to discharge the burden of proof under Article 4, so long as the national courts are satisfied that a defect in the product appears to be the most plausible explanation for the occurrence of the damage.

Legal bases for claims

On what legal bases can a product liability claim be brought?

A product liability claim can be based on one, or a combination of, the following grounds:

  • contract;
  • negligence;
  • no-fault liability under the Product Liability Directive; and
  • statutory product liability systems pre-dating the Product Liability Directive (under Article 13) – for example, the German Drug Act.

Contract

The precise legal basis for claims in contract will vary across the European Union, depending on the national legal doctrines. For instance, while a claim for breach of an express or implied term of a contract can be brought on a strict liability basis in all jurisdictions, some jurisdictions may have a requirement to prove fault for certain elements of a contractual claim (eg, in Germany, liability for breach of contract is strict only as regards a claimant's rights to cancel the contract, demand supplementary performance or abate the purchase price).

The doctrine of privity of contract – which applies in most countries – can limit the potential defendants to a product liability claim, since the consumer can bring a contract claim only against the retailer or supplier that sold the consumer the product alleged to have caused the loss. This can preclude a direct claim against the manufacturer of the product, unless there is a direct contractual link between the producer and consumer (eg, a manufacturer's guarantee).

If any applicable warranties or guarantees are given by the producer in relation to the product, legislation has been adopted in the European Union to harmonise national laws on certain aspects of the sale of consumer goods and associated guarantees. The Consumer Sales and Guarantees Directive (1999/44/EC) deals with:

  • the terms that will always apply in relation to contracts for the sale of consumer goods;
  • consumers' rights and remedies in the event of lack of conformity of the goods; and
  • requirements relating to consumer guarantees.

Where a guarantee is within the scope of the Consumer Sales and Guarantees Directive, it must:

  • be legally binding on the offeror under the conditions laid down in the guarantee statement and the associated advertising (Article 6.1);
  • state that the consumer has legal rights under applicable national legislation governing the sale of consumer goods and make clear that those rights are not affected by the guarantee (Article 6.2);
  • set out in plain, intelligible language the contents of the guarantee and the essential particulars necessary for making claims under the guarantee – notably, the duration and territorial scope of the guarantee and the name and address of the guarantor (Article 6.2); and
  • be made available on request by the consumer in writing or feature in another durable medium that is available and accessible to the consumer (Article 6.3).

Rights arising from the Consumer Sales and Guarantees Directive may be exercised without prejudice to other rights that the consumer may invoke under national rules governing contractual or non-contractual liability (Article 8.1).

Negligence

Claims in negligence are primarily based on a breach of duty of care to act to an acceptable standard, rather than whether the product was defective. In negligence, the injured party has a direct right of action against any person in the supply chain, provided that the injured party can establish that a duty of care is owed. However, there are significant differences across member state jurisdictions as to how principles of fault liability are applied.

No-fault liability under the Product Liability Directive

Under Article 3 of the Product Liability Directive, no-fault liability for a defect in a product which causes injury or loss extends to:

  • the producer;
  • the first importer of the product into the European Union (the intention being to ensure that there will always be a defendant within the European Union that can be held liable for the defective product);
  • an ‘own brander’ (ie, a party holding itself out as a manufacturer by including its own name or trademark on the product); and
  • a downstream supplier (eg, retailer, wholesaler or distributor), but only if this supplier fails to identify the producer, first importer or ‘own brander’ to the claimant within a reasonable time.

Under Article 6(1) of the Product Liability Directive, a ‘defective product’ is one which does not provide the safety that a person is entitled to expect. In such a claim, the burden of proof still lies with the consumer or injured person; further, no-fault liability does not mean absolute liability, since several defences are set out in the directive.

Criminal liability

Can a defendant be held criminally liable for defective products?

The Product Liability Directive imposes a regime of no-fault civil liability, rather than criminal liability, in relation to defective products. Manufacturers and suppliers may also face criminal liability if their products are defective or unsafe. Criminal prosecutions in respect of unsafe products are becoming much more common in member states.

The General Product Safety Directive (2001/95/EC) clearly establishes that the imposition of criminal liability for breaches of national provisions implementing the directive is up to individual member states, that each member state has scope to set out rules and penalties applicable to infringements (Article 7), and that decisions made regarding product withdrawal or recall are without prejudice to the assessment of liability under national criminal law (Article 18(3)).

Liable parties

Which parties can be held liable for defective products?

Under Article 3 of the Product Liability Directive, liability for a defective product extends to:

  • the producer;
  • the first importer of the product into the European Union (the intention being to ensure that there will always be a defendant within the European Union that can be held liable for the defective product);
  • an ‘own brander’ (ie, a party holding itself out as a manufacturer by including its own name or trademark on the product); and
  • a downstream supplier (eg, retailer, wholesaler or distributor), but only if this supplier fails to identify the producer, first importer or ‘own brander’ to the claimant within a reasonable time.

Under Article 5, where two or more people are liable for the same damage they shall be jointly and severally liable.

Limitation of liability

Can liability be excluded or mitigated in any way?

Article 12 of the Product Liability Directive specifically holds that a producer cannot limit or exclude liability to an injured person arising under the directive by any provision attempting to limit, exclude or exempt that producer from liability.

Member states also have an option under the Product Liability Directive to fix a liability cap under Article 16(1). This option has been exercised by some member states.

Litigation

Procedure

What is the procedure for filing a product liability claim before the courts in your jurisdiction?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including litigation and appeal processes, limitation periods and costs. There are few EU harmonised procedural rules applicable to national courts.

The Product Liability Directive (85/384/EEC) also does not address the methodology for assessment of damages for defective products which is left to the national laws of the individual member states.

Interlocutory motions

Can the court issue interlocutory orders or judgments in product liability cases? If so, what rules and procedures apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including interlocutory orders and judgments.

It is possible for a national court to refer a matter to the European Court of Justice (ECJ), since the ECJ has jurisdiction to give preliminary rulings concerning the interpretation of EU law (either primary or secondary legislation) under Article 267 of the Treaty on the Functioning of the European Union. Where a question about EU law is raised before a national court of a member state (eg, relating to the meaning of a particular provision of the Product Liability Directive), if a decision on the question is necessary to enable it to give judgment in the case, the national court can request the ECJ to give a preliminary ruling on that question, provided that certain procedural requirements are satisfied.

Where a referral to the ECJ for a preliminary ruling is made, the national proceedings will be stayed until the ECJ has given its ruling. The national court remains competent for the original case.

Pre-trial disclosure

What pre-trial disclosure/discovery mechanisms are available in product liability cases, if any?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including rules regarding pre-trial disclosure and discovery mechanisms.

Evidence standards

What evidence is accepted to support claims in product liability cases? What formalities apply to evidence submission?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including the formalities regarding evidence submission in product liability cases.

Expert evidence

Under what circumstances will the court appoint an expert to assist it in examining the merits of the case? What rules and procedures apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including the formalities regarding expert evidence in product liability cases.

Can the parties rely on expert witness testimony to support their claims? If so, what rules and procedures apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including the formalities regarding expert evidence in product liability cases.

Class actions

Are class actions or any other collective proceedings available for product liability claims in your jurisdiction? If so, what is the procedure for their formation and what benefits do they afford claimants? Are class actions formed on an opt-in or an opt-out basis?

Collective redress mechanisms are made available under the national laws of the individual member states and their precise form in any member state is therefore a matter for national law. Several member states have a form of class action or other collective redress mechanism that can be used for product liability claims.

On June 11 2013 the European Commission adopted the communication "Towards a European Horizontal Framework for Collective Redress" and a non-binding recommendation on common principles for injunctive and compensatory collective redress mechanisms. In this recommendation, the commission encouraged all member states to implement collective mechanisms for both injunctive and compensatory relief concerning violations of rights granted under EU law by July 26 2015. The recommendation set out the common principles to be followed by national collective redress mechanisms.

The recommendation was reviewed by the European Commission during 2017, with a public consultation announced on May 22 2017. This public consultation sought, among other things, to identify the effectiveness and efficiency of any collective actions since the recommendation, and situations in which collective action could have been appropriate but was not taken. The consultation ran until August 15 2017 and the commission published a report on January 26 2018, together with a study on national procedural laws and practices and their impact of consumers under EU consumer law.

The report concluded that the availability of collective redress mechanisms and the implementation of safeguards against the potential abuse of such mechanisms were still not consistent across the European Union. The report found that too few member states had introduced or amended their legislation since 2013, while nine member states still did not provide for any possibility of claiming compensation collectively. On April 11 2018 the commission issued its proposal for a new directive on representative actions for the protection of the collective interests of consumers, which grew out of the ‘New Deal for Consumers’ initiative. While it is not yet clear when the proposed directive will come into force, a few key features of the directive include:

  • representative action for an injunction without the need to obtain a mandate of the individual consumers concerned;
  • ad hoc designated claimants;
  • compensation measures by redress order or declaratory decision;
  • overarching effects of final decisions of an administrative authority or court;
  • “effective, proportionate and dissuasive" penalties;
  • suspension of the limitation period of consumers concerned with the representative action; and
  • a requirement that the infringing trader informs consumers, at its own cost, of the representative action final decision, provisions for redress measures and approved settlements.

Appeals

What rules and procedures govern appeals of court decisions?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including appeal processes.

Statute of Limitations

What is the statute of limitations for filing product liability claims?

Article 10(1) of the Product Liability Directive provides a three-year limitation period for claims. Time commences from the date on which the claimant became aware – or ought reasonably to have become aware – of the damage, the defect and the producer’s identity. This period is subject to the national laws of member states regulating the suspension or interruption of running on statutory limitation periods.

Further, Article 11 provides that the rights conferred by the Product Liability Directive are extinguished 10 years from the date on which the producer put the product which caused the damage into circulation, if proceedings are not commenced within that time (the so-called ‘long-stop provision’). A product is ‘put into circulation’ when it is taken out of the manufacturing process operated by the producer and enters a marketing process in the form in which it will be offered to the consumer.

Timeframe

What is the typical duration of proceedings in product liability cases?

The duration of product liability cases is largely dependent on the nature of the matters in issue, the procedural and case management rules and capacity of the courts of the individual member states.

In respect of preliminary references before the ECJ, based on a review of the figures published up to 2016, if a case is referred to the ECJ, the average duration is 15 months.

Costs, fees and funding

Can the successful party to the litigation recover court and attorneys’ fees and any other related expenses from the losing party? If so, what rules and procedures apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those relating to the liability to pay litigation costs in civil and commercial matters.

For cases referred to the ECJ, under Article 102 of the ECJ's Rules of Procedure the referring national court will decide the costs of the preliminary ruling proceedings and who bears responsibility for solicitors' fees and expenses incurred.

What rules and restrictions (if any) govern contingency fee arrangements?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those related to the  availability of contingency fee agreements.

Is third-party litigation funding permitted in your jurisdiction? If so, do any rules or restrictions apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including the availability of third-party litigation funding.

Is legal aid (ie, public funding) available to claimants in product liability cases? If so, what rules, restrictions and procedures apply?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those relating to the availability of legal aid.

In respect of civil cross-border disputes in the European Union, the  Cross-Border Disputes Directive (2002/8/EC) was enacted to ensure that legal aid is available to parties involved in such disputes. The directive provides a mechanism by which applicants can apply for legal aid for:

  • pre-litigation advice with a view of reaching settlement;
  • legal assistance and representation in court;
  • exemption from or assistance with the costs of proceedings, including costs related to the cross-border nature of a dispute; and
  • fees to persons mandated by the court to perform acts during the proceedings (Article 3).

The Cross-Border Disputes Directive also provides a mechanism whereby the applicant can apply for legal aid in either his or her member state of residence, or the member state of the litigation. The availability of this legal aid depends on the economic situation of the applicant, but each member state is responsible for this assessment and for setting the thresholds for legal aid (Article 5).

In respect of preliminary reference proceedings, a party can apply to the ECJ directly for legal aid to cover the costs of such proceedings. The applicant must satisfy the conditions under Article 115 of the ECJ's Rules of Procedure (ie, demonstrate that he or she cannot meet the cost of the proceedings, in whole or in part, and provide the requisite supporting information including any information about any legal aid that has been granted to the applicant by the referring court). Chapter 4 of the ECJ's Rules of Procedure sets out the procedure and relevant information.

Settlement

What rules and procedures govern the settlement of product liability cases?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those related to settlement.

How common are settlements in product liability cases?

As settlement is governed by the laws of the individual member states, and in many cases are confidential, it is difficult to estimate how commonly this occurs across the European Union.

Alternative dispute resolution

Are any alternative dispute resolution (ADR) methods required or advised before or in lieu of proceeding with litigation?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those in relation to ADR methods to be used before or in lieu of litigation.

However, there are a few applicable legislative instruments in EU law which concern ADR methods. The Consumer ADR Directive (2013/11/EU) obliges a trader to provide information to consumers on the ADR entity or entities under which those traders are covered, if those traders have committed to or are obliged to use those entities to resolve consumer disputes (Article 13). The directive does not impose obligations on traders to participate in ADR procedures, nor does it make the outcome of any ADR procedures binding on traders.

The Consumer ODR Regulation (524/2013) also sets out some obligations in relation to ADR for online traders. All traders established within the European Union engaging in online sales or service contracts, and online marketplaces established within the European Union, shall inform consumers about the existence of the online dispute resolution (ODR) platform and the possibility of using the ODR platform for resolving disputes. Under Article 14(1), all online traders must provide a link to the ODR platform on their websites.

How commonly is ADR used in relation to product liability cases in your jurisdiction?

It is difficult to estimate how commonly ADR is used, since the use of ADR methods is determined by the facts and circumstances of the individual case and the availability of ADR under the rules of the member states.

Defences

Available defences

What defences are available to defendants in product liability cases?

Various defences are available to producers, manufacturers and suppliers against a product liability claim.

Development risks

Article 7(e) of the Product Liability Directive (85/384/EEC) provides a defence to a claim under the directive if the defendant proves that the state of scientific and technical knowledge at the time when the product was put into circulation did not allow for the existence of the defect to be discovered.

The European Court of Justice considered the scope of this defence in the Commission v United Kingdom ([1997] All ER (EC) 481), ruling that in order to rely on this defence, a producer must prove that the objective state of scientific and technical knowledge, including the most advanced level of such knowledge, did not enable the defect to be discovered and that knowledge must have been "accessible" at the time the product was put into circulation. The extent to which this defence is available in practice is subject to much debate. This is an ‘optional’ provision of the directive and not all member states have adopted this defence.

Misuse of the product

One of the considerations taken into account when determining whether a product is defective is its use (ie, what the product could reasonably be expected to be used for). If it could not reasonably be anticipated that the product could be misused and the damage subject of the claim was caused by that misuse, the product ought not to be considered defective.

Contributory negligence

Article 8(2) of the Product Liability Directive holds that liability may be reduced (or avoided) if the damage is found to be caused by both a defect in the product and the fault of the injured person, or any person for whom the injured person is responsible.

Unavoidably dangerous products and obvious risks

Under Article 6(1)(a) of the Product Liability Directive the labelling and presentation of the product and any instructions or warnings provided regarding its safe use will be relevant when considering whether the product is defective. Arguably if a product contains obvious, unavoidable risks it should not be considered defective under the terms of the Product Liability Directive. However, if the risks are unavoidable but not obvious and the consumer is not warned about them – at least of what was known or not known in relation to those risks – the product will likely be considered defective.

Component suppliers

Article 7(f) of the Product Liability Directive provides a defence to suppliers of component parts if they prove that the defect is attributable to the design of the product in which the component is fitted or to the instructions given by the manufacturer of the finished product.

Defects occurring after the product is put into circulation

Article 7(b) of the Product Liability Directive indicates that a producer has a defence if the defect that caused the damage probably did not exist at the time when the product was put into circulation or came into being afterwards. A product is put into circulation when it is taken out of the manufacturing process operated by the producer and enters a marketing process in the form in which it will be offered to the consumer.

Where a product becomes unsafe over time through normal use, there will invariably be arguments as to whether the product, in its design and manufacture, adequately provides the safety that persons are entitled to expect during the course of reasonable use and the product lifespan.

Compliance with standards/regulations 

Article 7(d) of the Product Liability Directive holds that it will be a defence if the defect is due to compliance of the product with mandatory regulations issued by the public authorities. However, this will provide a complete defence only where the defect arises as a direct result of having to comply with such regulations. In other circumstances, compliance with safety regulations and standards may be a factor that a court takes into account to support a finding that the product is not defective.

Implementation of the optional provisions of the EU Product Liability Directive

Country

Date on which implementing legislation came into force

Is the development risks defence available (Article 7(e))?

Is total liability limited to €70 million (Article 16)?

Austria

July 1 1988

Yes

 

Belgium

April 1 1991

Yes

 

Denmark

June 10 1989

Yes

 

Finland

September 1 1991

No

 

France

May 19 1998

Yes (except where damage has been caused by a part or product of the human body)

No

Germany

January 1 1990

Yes

Yes: €85 million

Greece

July 30 1988

Yes

 

Ireland

December 16 1991

Yes

 

Italy

May 24 1988

Yes

No

Luxembourg

May 2 1991

No

 

Netherlands

November 1 1990

Yes

 

Norway

January 1 1989

No

 

Poland

July 1 2000

Yes

Yes

Portugal

November 11 1989

Yes

 

Spain

July 25 1995

Yes (except for medical products and food products)

 

Sweden

January 1 1994

Yes

 

Switzerland

January 1 1994

Yes

 

United Kingdom

March 1 1988

Yes

No

Preliminary actions

What preliminary procedural mechanisms are available to defendants, if any?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts.

Remedies

Damages

What types of damages may be awarded in product liability cases? What rules and standards govern their calculation? Are damages capped?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including types of damages and standards regarding the calculation of damages and caps.

However, for claims brought under the Product Liability Directive, the directive itself does have some specific provisions relating to the recovery of damages. A producer, manufacturer or supplier of a defective product is liable for:

  • death or personal injury; and
  • damage to property (other than to the product itself) if the defective product was a consumer product and the injured party was using the product as a consumer (Article 9).

Compensation for ‘non-material’ damages is available in product liability cases in most member states.

While heads of damages are largely not addressed in the Product Liability Directive, as this is left to member states, the directive does include some relevant thresholds. Liability for property damage is subject to a threshold of €500, provided that the item of property is of a type ordinarily intended for private use or consumption and was used by the injured person for his or her own private use or consumption (Article 9(b)). Further, Article 16(1) contains an optional provision whereby member states can cap a producer's total liability for damages resulting from personal injury or death and caused by identical items with the same defect at not less than €70 million (Article 16(1)). The table below sets out which member states have adopted this cap.

Are punitive damages allowed?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including those relating to punitive damages.

Other remedies

Are any other remedies available?

Product liability claims must be brought in the courts of member states and are governed by the procedural rules of those courts, including the availability of remedies other than damages. The Boston Scientific decision indicates that additional expenses (eg, costs of revision surgery) may be recoverable as damages in respect of certain product defects under the Product Liability Directive.

Product recalls

General requirements

Are there any statutory criteria under which a product must be recalled or other corrective action be taken?

In the European Union, obligations to deal with product safety risks arise under the General Product Safety Directive (2001/95/EC), the law of negligence and under express obligations in sector-specific legislation.

The General Product Safety Directive sets out the obligations of both producers and distributors to deal with product safety risks. Under Article 5(1), producers must adopt measures commensurate with the characteristics of the products which they supply, enabling them to be informed of risks the product might pose and choose appropriate actions, including:

  • warning consumers;
  • withdrawing the product from the market; and
  • recalling the product from consumers (where necessary).

Such appropriate action shall be undertaken on a voluntary basis or at the request of the competent authorities under Article 8(1)(f). Recalls shall take place only as a last resort, where other measures would not suffice to prevent the risks involved, in instances where the producers consider it necessary or where they are obliged to do so further to a measure taken by the competent authority.

Under Articles 6 and 8, member states must put in place a system under national law that allows for appropriate action to be taken, including the recall of consumer products where necessary. Most EU member states have given enforcement authorities the power to compel a company to initiate a recall or even conduct the recall themselves. Therefore, much of the actual procedure governing the taking of appropriate action, including the recall of products, is established under national law.

The criteria for determining what corrective action should be taken, including recall, is done by reference to risk assessment. The risk assessment methodology contained in the European Commission’s “Guidelines for the notification of dangerous consumer products to the competent authorities of the member states by producers and distributors in accordance with Article 5(3) of Directive 2001/95/EC” was effectively superseded by the more sophisticated methodology published by the commission in January 2010 in the form of Decision 2010/15/EU. The decision contains guidelines for member state authorities on assessing product risks in their market, assisting them to determine if a risk is a serious one that requires notification to the Rapid Alert System for Non-Food Products (RAPEX).

Some individual products have specific rules or guidelines for recall, notably medicinal products and medical devices. Voluntary industry guidelines exist in other sectors such as motor vehicles and the retail sector.

A guide for businesses on how to undertake a corrective action programme entitled “Corrective Action Guide: Guidelines for Businesses to manage Product Recalls & other Corrective Actions” was published by the European Commission in 2012. The guide was prepared by the Product Safety Enforcement Forum of Europe in consultation with various stakeholders.

The European Commission also now offers an online risk assessment app to assist businesses in preparing risk assessments in line with the commission methodology.

Notification

What rules and procedures govern notification of the product recall to government authorities and the public?

When a product placed on the market poses risks to consumers that are incompatible with its general safety requirement, Article 5(3) of the General Product Safety Directive requires producers and distributors to immediately notify the competent authorities of the member states where the product is in circulation.

Procedures exist for notification of measures and exchange of information between member states and the European Commission:

  • When a member state takes measures that restrict the placing on the market of products or requires their withdrawal or recall, it must inform the European Commission (Article 11);
  • When a member state adopts, recommends or agrees with producers or distributors measures or actions relating to products that present a serious risk, and the effects of those actions or measures may go beyond its own territory, it must immediately notify the European Commission through the RAPEX (Article 12); and
  • When the European Commission becomes aware of a product posing a serious risk to consumers in the European Union it may, after consulting with the member states, require temporary measures to be taken (Article 13). In practice, the commission does not usually act unless requested to do so by a member state.

Repairs, replacements and refunds

What rules and procedures govern repairs, replacements and refunds for defective products?

Recall is just one possible corrective action for responding to post-marketing information that a product may be unsafe to use. The range of responses also includes:

  • amending product information issued with new products – for example:
  • stipulating that the product is not to be used under certain circumstances; or
  • including a warning in the product information about use in particular circumstances or about the possibility of encountering specified untoward events;
  • in case of certain products with potentially unavoidable hazards (eg, medicinal products and pesticides), supplying the products to specialist intermediaries;
  • changing the design of the product; and
  • requesting distributors and users to carry out modifications to the product (ie, retrofit) or discard the product.

Article 5 of the General Product Safety Directive sets out the relevant measures that may be adopted in response to a product safety risk.

Non-compliance

What penalties apply for non-compliance with the legal provisions governing product recalls?

Article 7 of the General Product Safety Directive leaves it to the individual member states to enact rules and penalties applicable to infringements of the national provisions adopted under the General Product Safety Directive. The General Product Safety Directive specifies only that the penalties provided for must be "effective, proportionate and dissuasive".