The European Commission’s publication of a new draft Product Liability Directive (PLD) in September 2022 (see here and here for our analysis at the time) understandably caused quite a stir among stakeholders. It was significantly more consumer-friendly than the existing regime, among other things weakening the requirement for claimants to prove defect and causation, imposing new discovery/disclosure requirements on defendants, and reducing the defences available to claims. Business organisations such as AmCham EU and MedTech Europe have raised concerns about the proposals.
Following several rounds of negotiations among EU co-legislators, the European Council has recently published a revised draft representing its negotiating position for the new PLD (link) on behalf of the Member States. The Council’s proposed compromise text is broadly aligned with the Commission’s consumer-friendly proposal. There are no major substantive changes to the presumptions of defectiveness or causation and the disclosure requirements remain one-sided in favour of claimants. Indeed, in two important respects, the Council’s proposal is even more claimant-friendly than the original proposal:
- First, it argues that the longstop date (or ‘expiration date’) for claims relating to latent personal injury should be extended from 15 to 20 years. If accepted, this would mean that a patient who is exposed to a product today and develops a disease two decades later might still be able to sue the producer. This, in turn, may require companies to examine their document retention policies to ensure that the evidence needed to defend such a claim is still available.
- Second, it seeks to reintroduce the option for Member States to derogate from the development risks defence. This defence allows a producer to escape liability where they can show that the state of the science at the time that a product was put into circulation did not allow a defect in that product to be discovered. For the drafters of the current, 1985 version of the PLD, this was an important way of fairly apportioning risk between consumers and industry and of encouraging innovation. However, Member States have the flexibility to decide whether to include this defence in their national law or not, leading to a lack of harmonisation across Europe. The Commission’s proposal for a revised PLD sought to close this loophole and require the defence to be implemented in all Member States. The Council’s proposal to reintroduce Member State discretion is therefore a backwards step.
More positively, the Council has suggested delaying the timing for Member States’ implementation of the new rules. Given the magnitude of the changes proposed, we think this is a positive step that will allow consumers, businesses and courts more time to prepare for the new regime.
The European Parliament’s latest position is as set out in the Co-Rapporteurs’ Draft Report on 5 April 2023, but MEPs have continued to table amendments since then and the European Parliament’s negotiating position is not yet publicly fixed. It’s fair to say that some of the Co-Rapporteurs’ recommendations appear more industry-friendly.
Trilogue negotiations are due to commence soon, and at this point the final wording of the new PLD and the timing for its implementation remain unclear. EU policymakers want to have a final version of the new PLD on the statute books before the European Parliament elections in June 2024, with Member States then bringing the rules into force at a national level in the years that follow. We will keep monitoring developments. Please get in touch if you’d like to know more.
