The new regulation of defective products: the EU Directive 2024/2853
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1. On 8 December 2024, Directive (EU) 2024/2853 of the European Parliament and of the Council of 23 October 2024 on liability for defective products and repealing Council Directive 85/374/EEC (hereinafter "EU Directive 2024/2853"), published in the OJEU of 18 November 2024, entered into force. This EU Directive repeals Directive 85/374 of 25 July and has to be transposed by 9 December 2026.
2. Aim and objective: EU Directive 2024/2853 responds to the following needs:
a) Update: the new regulation addresses issues arising from technological advances, such as artificial intelligence (AI) and the circular economy, which determines that its scope (i) extends not only to physical products, but also to software, AI, digital services, electricity, water and gas; and (ii) considers not only product safety, but also sustainability, conformity with consumer expectations and quality standards as defective (which can certainly generate conflicts given the interpretability of these terms).
b) Revision: aims to ensure consistency and uniformity with national and EU product safety and market surveillance legislation, clarifying key notions to ensure legal certainty and a level playing field, as well as reflecting recent case law of the Court of Justice of the European Union.
3. Scope: Applies to products placed on the EU market on or after 9 December 2026, with the following exclusions:
a) Free and open source software: When it is not developed or provided in a commercial context.
b) Nuclear accidents: If covered by international conventions ratified by Member States.
c) Personal data protection: Subject to Regulation (EU) 2016/679 (GDPR) and other specific EU rules.
d) National liability rules: For reasons other than product defect, including rules implementing EU law.
e) Pre-existing special regime: Duties under liability schemes in force since before 30 July 1985.
4. Compensation for defective products in respect of the following damages:
a) Death or bodily injury, including medically recognised psychological damage;
b) Material damage, except (i) the defective product itself, (ii) a product damaged by a defective component integrated in or interconnected with that product by or under the control of the manufacturer of that product, (iii) goods used exclusively for business purposes; (c) destruction or corruption of data not used for business purposes.
5. Economic operators responsible for defective products: the following may be considered as such:
a) Manufacturers: Of the defective product or components.
b) Importers/representatives: Including logistics providers in their absence.
c) Modifiers: Those who substantially alter a product and place it on the market.
d) Distributors: If they do not identify the previous operator when required.
e) Online platforms: Responsible for defective products sold through them.
Obligations for transparency, information and traceability of products are increased, especially in the digital area.
It is provided for in cases where two or more economic operators are liable for the same damage, without prejudice to the right of recourse between them.
6. Subsidiary compensation: If victims do not obtain compensation from those responsible, Member States may make use of existing national compensation schemes or set up new ones, in accordance with their legislation.
7. Evidence: The burden of proof is on the claimant, who must provide sufficient facts and evidence to support his claim. He may rely on legal presumptions (Article 10) and request that the defendant produce relevant evidence, respecting confidentiality and business secrets.
8. Exemption from liability: Member States may maintain strict liability in their legal systems, even if the defect was not detectable according to scientific and technical knowledge at the time the product was introduced or put into service.
9. Reduction of liability: The liability of the economic operator may be reduced or cancelled where the damage is caused jointly by the defectiveness of the product and the fault of the injured person or of those for whom he is responsible.
10. Time limit for bringing a liability action (Art.16): 3 years from the day on which the injured person became aware, or ought reasonably to have become aware of a) the damage; b) the defective character and c) the identity of the relevant economic operator who could be held liable.
11. Expiry period of the right to claim compensation: The right to claim compensation shall expire 10 years after the defective product that caused the damage has been placed on the market or put into service. For substantially modified products, the period shall commence upon placing on the market or subsequent modification.
12. In conclusion: In view of the above, it is appropriate to (i) update documentation to comply with security and information requirements; (ii) manage defects and updates, especially in digital or AI products; (iii) ensure traceability and access to relevant data; and (iv) have adequate insurance against claims for damages.