Negotiation of the European Parliament´s Committees

On 9 October 2023, two committees of the European Parliament, Internal Market and Consumer Protection Committee ("IMCO") and Legal Affairs Committee ("JURI") , discussed and voted on amendments to the European Commission's proposal for a revised EU product liability regime.

With their amendments, the Committees sought to meet the aim of the revision of the current Product Liability Directive (or “PLD”), which is to “strike a balance between remaining an effective instrument for victims of defective products, and the legal certainty economic operators deserve” (Pascal Arimont, co-rapporteur of JURI, is cited in the press release of the European Parliament of 9 October 2023).

Selected IMCO´s und JURI´s amendments

In this article, we will highlight some of the amendments adopted by IMCO and JURI by a large majority (33 votes in favour, 2 against, no abstentions) compared to the European Commission's PLD Proposal published on 28 September 2022.

Scope of application

In line with the Council's Amendments the joint Committee of the European Parliament agreed that it should be clarified in the definition of 'product' that raw materials shall be included.

In addition, although the joint Committee decided, in line with the initial PLD Proposal by the Commission, that software should be included in the scope of the PLD, it voted that free and open software should be excluded from the scope of the PLD unless such software is offered in exchange for a price or for personal data not exclusively used for improving the security, compatibility or interoperability of the software.

Definition of defectiveness

The joint Committee changed the definition of 'defectiveness' of a product. Recital 22 of the compromise text provides that defectiveness of a product should not be determined by referring to its fitness for use but to the lack of safety that an average consumer is entitled to expect and/or that is required by EU or national law. In addition, according to the same recital, the assessment involves an objective analysis and not, as in the current PLD, a reference to the safety which a particular person is entitled to expect.

Disclosure of evidence

While both the European Commission's initial PLD Proposal and the Council's Amendments sought to impose an obligation on the defendant to disclose evidence if requested to do so by the consumer claimant and ordered by the court, the joint Committee instead provides that the defendant may also request the national courts to order an equally disclosure of relevant evidence available to the consumer claimant.

In addition, wording is added to the effect that Member States shall ensure that such information is provided without undue delay and in an easily accessible and understandable manner.

Presumption of defectiveness / Burden of Proof

The joint Committee extended the presumption of a causal link between the damage and the defect, stating that it would also apply in cases where a product belonged to the same production series as a product already proven to be defective.

Furthermore, Recital 30 of the compromise text foresees that Member States may "empower national consumer protection bodies to represent interests of consumers in the process of gathering evidence necessary to prove the defectiveness of a product, the damage caused by the defective product and the causal link between the two."

Compensation of non-material damages

The joint Committee of the European Parliament voted that compensation should be available not only for purely physical damage, but also for medically recognized psychological damage.

In addition, according to the adopted text, it will also be possible to claim for the destruction or irreversible corruption of data, provided that the economic loss exceeds EUR 1,000.

Furthermore, the joint Committee foresees that the competent national consumer protection authorities will provide information and tailored guidance to consumers on the existence and scope of potential claims, in order to enable them to effectively exercise their rights to compensation under the revised PLD

Exemption from liability

In order to avoid hampering innovation in the software sector, and in recognition of the potential challenges that the PLD Proposal may pose for software developers, the joint Committee of the European Parliament added wording to the effect that manufacturer of software who are micro enterprises or small enterprises when the product is placed on the market are excluded from liability, provided that another economic operator is liable for the damage caused by the software under the revised PLD.

Further extension of the expiry period for exceptional cases and extension re micro-undertakings

Whereas the European Commission's initial PLD Proposal aimed for an expiry period of 15 years as the time period after which an injured person shall no longer be entitled to compensation, the Council's Amendments suggested an extension of the expiry period to 20 years. The joint Committee of the European Parliament even went further and agreed on an extension of the expiry period to 30 years which shall be limited to exceptional cases when symptoms are slow to emerge.

Furthermore, the joint Committee encourages Member States to consider compensation for property damages, even in the case of exclusively professional use, when the claimant is a micro-undertaking.

Court judgments' database

Whereas the Council’s Amendments aim at clarifying that the final judgments that Member States have to publish in the context of the PLD Proposal shall include judgments of Courts of Appeal and of the highest national instance, the joint Committee of the European Parliament focused on the inclusion of judgments that will be delivered by the Court of Justice of the European Union in this respect.

Fallback option for Member States in absence of a liable economic operator

If compensation fails because no economic operator is liable under the PLD, or if the liable economic operators are insolvent or have ceased to exist, the joint Committee of the European Parliament gives the Member States the option of using existing national sectoral compensation schemes or even creating such schemes to compensate the victims. These schemes may not be financed from public revenue.

Outlook

As a next step, the plenary of the European Parliament will vote on the amendments of the IMCO and JURI committees in November 2023.

The amendments adopted by the plenary of the European Parliament will be the basic document for the trilogue between the European Parliament, the Council, and the Commission of the European Union.

Previous Hogan Lovells Updates

Our Hogan Lovells EU Product Law team has previously covered the progress of the PLD Proposal in several articles.

You can read these previous articles here:

• European Commission proposes new ground-breaking rules on product liability and AI civil liability.
• Rebuttable presumptions of fact under the EU Commission's recent product liability directive proposal
• Proposed new disclosure obligations on alleged product defects for defendants in product litigation
• EU Council's position on the proposed revision of EU product liability law

Authored by Ina Brock, Christelle Coslin, Nicole Saurin, and Cléa Dessault.

Supported by Alexander Ruhdorfer.