The Council has finally adopted the new Product Liability Directive.

UM – 10/2024

Around ten months after the successful conclusion of the trialogue negotiations on 14 December 2023, the Justice and Home Affairs Council formally approved the new Directive on liability for defective products on 10 October. It was adopted without further discussion. The Council had already informally announced its approval to the European Parliament months ago.


Revision of the Product Liability Law was long overdue. The current Product Liability Directive 85/374 EEC dates back to 1985. In particular, there are three developments that have led to the rewording of the liability for defective products, irrespective of culpability.

AI, online retail and circular economy

First: Smart products and systems with artificial intelligence (AI) overstretch the currently applicable legal definitions and requirements, and force adjustments. A new product definition means that, in addition to AI systems, software and digital construction documents are now also becoming the focus of Product Liability Law.


Second: Supply chains are structured differently today than they were in the 1980s, in some cases with new economic players such as online retail platforms or their fulfilment service providers. In order to ensure basic consumer rights, the emergence of new economic players also required revision of the possible liability subjects. Otherwise, legal liability claims would come to nothing.


Third: With its sustainability strategy, the European Union (EU) is focussing on a more circular economy. The Green Deal is intended to promote business models in which products are regularly repaired, recycled and refurbished. This brings players, who significantly modify products outside the manufacturer's purview, within the scope of Product Liability Law.

Consequences for companies

With the revision of European Product Liability Law, companies are facing new liability and litigation risks. In addition to the expansion of the product definition and the circle of economic players, the concept of error has also been expanded. In future, product safety requirements will also include cyber security, as well as specific requirements for user groups, such as life-sustaining medical devices. It is also clarified that personal injury also includes medically recognised damage to mental health. Although the standard limitation period of three years from the injured party's knowledge and the ten-year maximum period from placing the product on the market remain in place, it can - and this is new - be extended to 25 years for long-term damage to health. Litigation risks arise from the defendant's obligation to disclose all relevant evidence, insofar as this is necessary and proportionate.

Omission of liability limits

From a German perspective, it is of particular interest that the new European Product Liability Law no longer recognises any upper liability limits. German Product Liability Law currently recognises a maximum amount of EUR 85 million for personal injury. The Medicinal Products Act lays down separate regulations for damage caused by medicinal products. It remains to be seen how the German government will implement the new European Directive. Following the political will expressed in the recitals, Member States should not maintain or introduce stricter or less stringent provisions than those laid down in the Directive. However, this does not yet guarantee whether the upper liability limits in Germany will cease to apply in future.

Balancing the burden of proof

The new Product Liability Directive goes hand in hand with a significant strengthening of consumer interests. Legal loopholes are closed, new product risks and risks in the supply chains are averted. However, the legal position of injured parties is not only strengthened by the right of manufacturers to hand over evidence, but also by a rebalanced standard of proof. Here, the new directive provides relief for consumers, including the presumption of defectiveness in the event of a breach of disclosure obligations, the presumption of causality in the event of typical damage caused by a defect or, in complex cases, the presumption of defectiveness and causality if these appear plausible.