Product Liability [EU]

Table of Contents

Defective products: liability

European legislation has approximated the laws of the Member States concerning liability for products in order to ensure a high level of consumer protection against damage caused to health or property by a defective product. The injured person has three years within which to seek compensation.

Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products [Official Journal L 210 of 07.08.1985]

Scope

Scope: the Directive applies to movables which have been industrially produced, whether or not incorporated into another movable or into an immovable.

Excluded, except by derogation of the Member States, are primary agricultural products and game products which have not undergone processing and products put into circulation before 30 July 1988. However, Directive 1999/34/EC subsequently amended the scope of Directive 85/374/EEC (see Directive 1999/34/EC below).

Principle of liability without fault: the Directive establishes the principle of objective liability or liability without fault of the producer in cases of damage caused by a defective product. If more than one person is liable for the same damage, it is joint liability.

Producer is taken to mean:

any participant in the production process;
the importer of the defective product;
any person putting their name, trade mark or other distinguishing feature on the product;
any person supplying a product whose producer cannot be identified.

Liability & Fault

Burden of proof: the injured person must prove:

the actual damage;
the defect in the product;
the causal relationship between damage and defect.

As the Directive provides for liability without fault, it is not necessary to prove the negligence or fault of the producer or importer.

Lack of the safety which the general public is entitled to expect determines the defectiveness of a product. Factors to be taken into account include:

the presentation of the product;
the use to which it could reasonably be put;
the time when the product was put into circulation.

The fact that a better product is subsequently put into circulation cannot be taken into consideration in determining the defectiveness of the product in question.

Exemption

Exemption of producers from liability: the producer is freed from all liability if he proves:

that he did not put the product into circulation;
that the defect causing the damage came into being after the product was put into circulation by him;
that the product was not manufactured for profit-making sale;
that the product was neither manufactured nor distributed in the course of his business;
that the defect is due to compliance of the product with mandatory regulations issued by the public authorities;
that the state of scientific and technical knowledge at the time when the product was put into circulation was not such as to enable the defect to be discovered. On this point, the Member States are permitted to take measures by way of derogation;
in the case of a manufacturer of a component of the final product, that the defect is attributable to the design of the product or to the instructions given by the product manufacturer.

The producer’s liability is not altered when the damage is caused both by a defect in the product and by the act or omission of a third party. However, when the injured person is at fault, the producer’s liability may be reduced.

Damage Covered

Damage covered: for the purposes of the Directive, “damage” means:

damage caused by death or by personal injuries;
damage to an item of property intended for private use or consumption other than the defective product, with a lower threshold of 500 euros.

The Directive does not in any way restrict compensation for non-material damage under national legislation.
The Directive does not apply to injury or damage arising from nuclear accidents covered by international conventions ratified by the Member States.

Liability

Expiration of liability: the injured person has three years within which to seek compensation. This period starts from the date on which the plaintiff became aware of the damage, the defect and the identity of the producer.
The producer’s liability expires at the end of a period of ten years from the date on which the producer put the product into circulation.
No contractual clause may allow the producer to limit his liability in relation to the injured person.

National provisions governing contractual or non-contractual liability are not affected by the Directive. Injured persons may therefore assert their rights accordingly.

Implementation

Derogation clauses: the Directive allows each Member State to set a limit for a producer’s total liability for damage resulting from death or personal injury caused by identical items with the same defect. This limit may not be lower than 70 million euros.

Reports: in 1995, ten years after the date of notification, the Directive provided for the Commission to submit to the Council a report on the effect on consumer protection and the functioning of the internal market:

of the provisions governing the producer’s non-liability when it is proved that the state of scientific and technical knowledge was not such as to enable the defect to be discovered before the product was put into circulation;
of the application of any financial limit set for the producer’s total liability.

In addition, the Directive provides for the Commission to report every five years to the European Institutions on its application of the Directive and, where applicable, on any proposed changes.

Extension to Ag Products

In the aftermath of the “mad cow” crisis, this Directive extended the scope of Directive 85/374/EEC to primary agricultural products (such as meat, cereals, fruit and vegetables) and game products, eliminating any possibility of derogation. Consequently, the producer or importer is required to pay compensation if there is a causal link between the damage sustained and the defect, without the injured person having to prove negligence on the part of the producer or importer.

The Directive helps to increase the level of consumer protection and to restore consumer confidence in the safety of food products by encouraging producers and importers to comply strictly with the applicable standards and safeguard measures, and to adopt a responsible attitude with regard to the safety of primary agricultural products.

Moreover, the extension of the scope of Directive 85/374/EC allows the principle of liability without fault to be applied to primary agricultural products in all the countries of the European Economic Area (EEA), thereby removing any risk of distortion of competition within the single market deriving from disparities between the rules governing liability in respect of primary agricultural products. It also puts an end to difficulties which may arise in determining the dividing line between primary agricultural products and processed products.

This Directive stems from the Green Paper launched by the Commission in 1999.

References

Act	Entry into force – Date of expiry	Deadline for transposition in the Member States	Official Journal
Directive 85/374/EEC [Consultation: CNS/1976/1020]	30.07.1985	30.07.1988	OJ L 210 of 07.08.1995

Amending act(s)	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 1999/34/EC [Codecision: COD/1997/0244]	04.06.1999	04.12.2000	OJ L 141 of 04.06.1999