EU Council closes in on product liability rulebook
The Product Liability Directive is a legislative proposal intended to bring Europe’s product liability regime in line with the digital age by covering software – and, therefore, Artificial Intelligence.
The Swedish presidency circulated a new compromise text on the draft law, dated 23 May and seen by EURACTIV. The text mostly clarifies certain key aspects, such as the scope and the conditions for the member states to regulate specific situations further. The timeline was also extended.
An EU official told EURACTIV the EU Council is set to endorse a general approach to the Directive in June, which seems to be confirmed by the light-touch amendments. A possible date for the next technical meeting on the file currently circulating on 12 June.
The Directive provides that national courts can presume the defectiveness of a product or a causal link between the damage and the defectiveness in some specific cases where these are too complex for the defendant to prove, particularly due to technical or scientific complexity.
This provision is particularly important as it might apply to complex technologies such as Artificial Intelligence, where it might be near to impossible for a defendant to prove the defectiveness of an AI model.
At the same time, an economic operator might free itself from liability if it proves that the state of scientific and technical knowledge at the time did not allow for discovering the product’s defectiveness.
However, the EU countries have introduced a provision stating that they can introduce national legislation that limits such a relief of responsibility in cases where they deem it would unduly limit people’s protection.
Thus, national governments can introduce new measures or modify existing ones to extend liability in such situations to specific types of products, as long as they are necessary and justified by public interest objectives, namely public policy, public security and public health.
The Commission is empowered to issue a non-binding opinion within six months since the national measure is notified to facilitate a coherent approach across the bloc. Until then, the measure is put on hold.
According to an explanatory footnote, the changes aim to clarify the article’s rationale, that it is a notification rather than an authorisation procedure and that the Commission does not have veto power over the national measures.
The draft law indicates that open software provided for free and outside a commercial activity is excluded from the scope of the liability rules.
However, the text clarifies that if a manufacturer integrates the open-source software as a component of its product and it consequently causes a defect, the liability would fall on the manufacturer rather than the software provider.
“To clarify that the manufacturer of open-source software developed and supplied outside of a commercial activity should not be liable even if the software is subsequently integrated into another product and then placed on the market,” a footnote explains.
Machine-to-machine communication services have also been placed within the scope.
The EU Council clarified that internet access services are not to be considered as a service related to a product and therefore sit outside the Directive’s scope. At the same time, if a product relies on internet access to maintain safety and it loses connectivity, it will be deemed defective.
The specification is important for Internet of Things products, devices able to connect and exchange data. Under the upcoming Cyber Resilience Act, the manufacturers of such connected devices will be obligated to ensure security patches are rolled out throughout a certain time.
The compromise clarifies that, although the defectiveness of a product should consider how it was presented, the liability under the Directive cannot be circumvented by simply putting warnings or other information “since defectiveness is determined only by reference to the safety that the public at large is entitled to expect”.
The timeline for the new liability rules has been extended to products placed on the market 30 months after the Directive enters into force, a timing that is aligned with the repealing of the previous liability regime.
For the member states, the deadline to transpose the Directive into national law was extended to two years after it entered into force. “A transition period of six months was introduced to give economic operators and others time to adapt to the new rules,” the text said.
Manufacturers can be liable for a defective component that they integrated into their product. However, an injured person can seek compensation either from the product manufacturer or the producer of the defective component in so far as the component is considered a product.
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