The aim of Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products is to protect the health and property of consumers, to ensure the free movement of goods and to prevent the distortion of competition in the single market. In addition to this general Directive, there are special liability regulations for areas such as medicinal products; however, these special regulations are not addressed in this article.
The Directive introduced the principle of strict liability for European producers. If a consumer is injured as a result of a defective product, the producer is liable, regardless of whether the defect is their fault or whether they were negligent. The Directive covers damage resulting from death or personal injury, as well as private property.
The EU Commission wants to create a positive and reliable framework for product liability that encourages innovation, jobs and growth while protecting consumers and the safety of the general public. New technological developments such as the Internet of Things or autonomous systems need to be taken into consideration. Therefore, the Directive requires updating. Details of the Commission’s proposal are found in its report COM (2018) 246 final.
Burden of proof
The burden of proof lies with the injured person, that is, they must prove there is damage, that the product is defective and that there is a causal link between the defect and the damage. However, the injured party does not have to prove the producer is at fault or negligent.
Following a consultation in 2017, it was revealed that the majority of authorities and civil society representatives considered the burden of proof to also be a burden on consumers. Almost all consumer associations view this as the most common obstacle to obtaining damages, particularly with regard to new technological developments and the increase in product complexity.
In contrast, few insurers view the burden of proof as difficult to do in practice. Most companies believe that reversing the burden of proof or even an exemption would be detrimental. The burden of proof on the part of the injured person forms the basis for a claim and exempting them from this would result in the Directive no longer taking due account of various interests.
A detailed overview and assessment of the results of the consultation can be found in a report from Commission staff published on 7 May 2018.
The Commission has formed an ‘expert group on liability’ which has two configurations:
The first is composed of representatives from the Member States, industry, consumer organisations, civil society and academia. This group will assist the Commission in interpreting, applying and possibly updating the Directive. The group will take into account developments in EU and national case law, the impact of new and emerging technologies and other developments in the area of product liability.
The second, which will be composed solely of independent academic experts and practitioners, will examine whether the overall liability regime is appropriate for facilitating the uptake of new technologies by fostering investment stability and consumer confidence.
In addition, the EU Commission intends to issue guidance on the Directive by mid-2019 and to publish a report on the wider implications for the liability and safety frameworks for artificial intelligence, Internet of Things and robotics, including any potential possible gaps and orientations. If necessary, the Commission will update certain aspects of the Directive, such as the terms ‘defect’, ‘damage’, ‘product’ and ‘producer.
However, the Commission has stated that the general principle of strict liability will remain unaffected.
Contributors to Germany’s social insurance system to benefit
If a defective product results in a person’s death or an injury to their body or health, the producer is obliged to compensate the injured party for the resulting damage. The injured party bears the burden of proof for the defect, the damage and the causal link between defect and damage. If a German social insurance institution provides benefits to the injured party as a result, the claim for damages is borne by them (the social insurance institutions), as per Section 116 of Book X of the German Social Code. The income generated by Germany’s social insurance institutions in this way helps to stabilise the burden of contributions to Germany’s social security. Other EU Member States have similar rules.