Product Liability Directive

On 18 November 2024, the Product Liability Directive (the “PLD”) was published in the Official Journal of the European Union, marking a significant step in the move towards a new product liability framework within the EU. 

The PLD reframes the existing regime in a manner that is markedly favourable to claimants. Some of the key changes being introduced under the PLD, which comes into effect on 9 December 2026, include the following:

• Product: A broader definition of “product” which, for the first time, expressly includes “software”. While “software” is not defined in the text of the PLD, the recitals confirm that all forms of software (including software updates and upgrades) are within scope for the PLD regardless of whether it is stored on a device, accessed through a communication network of cloud technologies or supplied in a software-as-a-service (SaaS) model. Under the new framework, companies involved in the production and supply of operating systems, firmware, computer programs, applications and AI systems face potential liability for damage caused by defects in their products.

• Related Services: An extension of liability to cover “related services”, meaning digital services which are “integrated into or interconnected with” a product and without which a product would be incapable of performing some or all of its functions.

• Damage: An expanded concept of “damage” to include “medically recognised damage to psychological health” and the “loss or corruption of data”. The extension to cover psychological injury, in particular, could be significant and might open the door for a cohort of new claims taken by claimants who have no recourse under the existing regime in the absence of a physical injury. In relation to limitations of liability, there is a maximum liability limit of €85 million for personal injury in the current Directive and that will be removed without replacement. The loss / corruption of data extension of “damage” will not apply to data breaches or the loss of data which is easily recoverable.

• Economic Operators: The PLD introduces the concept of an “economic operator” in the context of parties that ought to be held liable. As with the existing regime, primary liability rests with the manufacturer of a defective product or a defective component but liability can also pass to the importer of the product or the manufacturer’s authorised representative in the EU. Other “economic operators” who may be held liable under the PLD are providers of “related services” and “fulfilment service providers” (this is another concept introduced by the PLD and it covers businesses involved in activities such as warehousing, packaging and dispatching the product).

• Disclosure: Under Article 9 PLD manufacturers will be required to disclose “relevant evidence” at their disposal to a claimant where the claimant has presented facts and evidence “sufficient to support the plausibility of the claim for compensation”. This provision places a heavy obligation on defendants and may need clarification from the national law transposing the PLD and / or the courts in terms of what is meant by “relevant evidence” and how this is to be limited to what is “necessary and proportionate” (as is required under the PLD).

• Rebuttable Presumptions: In certain circumstances under the PLD it will be presumed that a product is defective and / or that the damage suffered was caused by the product’s defect. An example of where this presumption will arise is where the claimant demonstrates that the damage was caused by an “obvious malfunction” of the product during “reasonably foreseeable use” or under “ordinary circumstances”.

• Limitation Period: The PLD introduces a limitation period of 25 years where the claimant has not been able to initiate claims within 10 years due to a latent personal injury, meaning an injury which according to medical evidence is slow to emerge. This gives an avenue for injured persons to claim if the injury arises at a significantly later period than the date the damage occurred and manufacturers and other “economic operators” should be mindful of this 25-year longstop date in the context of their document retention policies.

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Visit our Commercial Litigation and Dispute Resolution page to stay up to date with the latest updates, articles and briefing notes. If you have any questions about this update, please contact partners Michael Byrne or Deirdre Crowley or your usual Matheson contact.