Product Liability Directive (85/374 as amended)

The Product Liability Directive (Council Directive 85/374/EEC of 25 July 1985 as amended) establishes a regime of strict liability for defective products across the European Union. One of the earliest and most influential examples of EU consumer protection legislation, the Directive created a harmonised framework that displaced divergent national product liability regimes. It has been amended three times — by Directive 1999/34/EC (extending coverage to agricultural products), by the EEA Agreement, and by Directive 2005/17/EC (accession of new Member States). A major revision was adopted in 2024 (Directive (EU) 2024/2853), the Product Liability Directive 2.0, addressing digital products, the circular economy, and artificial intelligence.

The Strict Liability Framework

Article 1 establishes the core principle: the producer shall be liable for damage caused by a defect in their product. Liability is strict — the claimant need not prove fault or negligence, only that the product was defective, that damage occurred, and that the defect caused the damage.

The Court of Justice has consistently held that the Directive is a maximum harmonisation measure, meaning Member States cannot maintain or introduce more protective rules within its scope. In Commission v France (Case C-52/00), the Court struck down French provisions that imposed liability on suppliers where the producer could not be identified, extending beyond the Directive’s framework.

Definition of Product and Defect

Article 2 defines a product as “all movables, even if incorporated into another movable or into an immovable.” The original exclusion of primary agricultural products and game was removed by Directive 1999/34/EC following the BSE crisis. The 2024 revision explicitly includes digital manufacturing files, software, and AI systems within the definition.

A product is defective under Article 6 when it does not provide the safety which a person is entitled to expect, taking all circumstances into account: the presentation of the product; the use to which it could reasonably be expected to be put; and the time when the product was put into circulation.

The “legitimate expectation” test is objective. The Court of Justice in Boston Scientific Medizintechnik v AOK (Joined Cases C-503/13 and C-504/13) held that products belonging to the same group or production series as a defective product may be considered defective without proof of defect in the specific item, reducing the claimant’s burden in medical device cases.

Damage

Article 9 defines recoverable damage as: damage caused by death or personal injury; damage to, or destruction of, any item of property intended for private use or consumption (other than the defective product itself), with a lower threshold of EUR 500. Property damage is capped to exclude commercial property, maintaining the consumer protection focus.

The 2024 revision expands recoverable damage to include medically recognised damage to psychological health, and loss or corruption of data when the data is used for private purposes. The development of liability for data loss reflects the increasing integration of software and digital services in consumer products.

Persons Liable

The “producer” includes the manufacturer of a finished product, the producer of any raw material, and the manufacturer of a component part (Article 3). Importers into the Community are treated as producers. Where the producer cannot be identified, each supplier of the product is treated as the producer unless they inform the injured person of the producer’s identity within a reasonable time.

The Directive’s identification requirements have been strictly interpreted. In O’Byrne v Sanofi Pasteur MSD (Case C-127/04), the Court held that the supplier of a vaccine could be liable as a producer where the actual producer could not be identified, but that the Directive precludes the supplier from being treated as a producer based solely on their role in the distribution chain.

Defences

Article 7 provides the producer with several defences:

• The defect did not exist when the product was put into circulation;
• The defect is due to compliance with mandatory regulations;
• The product was not put into circulation by the producer;
• The defect could not have been discovered given the state of scientific and technical knowledge at the time (the “development risks defence” or state of the art defence);
• The defect in a component is attributable to the design of the finished product.

The development risks defence is optional — Member States may retain or introduce it. Most Member States have adopted it, but its interpretation varies. The Court of Justice in Commission v United Kingdom (Case C-300/95) upheld the UK’s implementation, rejecting the Commission’s argument that the defence required the producer to demonstrate that the defect was objectively undiscoverable.

The Development Risks Defence and Its Rationale

Article 7(e) exempts the producer where “the state of scientific and technical knowledge at the time when the product was put into circulation was not such as to enable the existence of the defect to be discovered.” The defence reflects a policy choice to balance innovation incentives with consumer protection: producers are not strictly liable for risks that could not have been discovered at the time of marketing.

The Court of Justice in A v Sanofi (Case C-735/21) clarified that the defence must be assessed objectively — the producer cannot rely on the defence where the existence of a risk was known, even if production standards complied with regulatory requirements.

Revision 2024 — Product Liability Directive 2.0

The revised Product Liability Directive (2024/2853) modernises the framework for the digital age. Key changes include: explicit inclusion of software and AI systems as products; liability for modifications to products made by producers (including software updates); reversal of the burden of proof where the defendant fails to disclose relevant evidence; expanded damage categories covering psychological harm and data loss; and an exception to the development risks defence for medicines and certain AI systems.

The revision addresses the “digital paradox” where products increasingly depend on software and data flows, and the “circular economy” where products are repaired, refurbished, and reused, requiring clarity on producer liability throughout the product lifecycle.