Product from physical to digital
At the time the current product liability directive went into effect, only tangible products were the subject of dispute. That has changed with the advent of apps, smart devices and other software applications. The new directive recognizes this shift, making the scope of the new directive much broader. Importantly, software developers, including providers of AI systems, also qualify as manufacturers under the directive and thus fall within its scope.
The moment of control
Until now, mainly the moment of delivery was an arrow point for determining whether a defective product existed, because the manufacturer had control over the product in question until that moment. However, when the product concerns software, for example, the manufacturer can continue to exercise control over the product already sold even after the moment of delivery - through updates. The proposed directive therefore considers not only the time when the product is placed on the market but also the time when the manufacturer no longer controls the product to be important in assessing whether a product is defective.
New evidence suspicions
One of the most discussed aspects of the proposed directive is the introduction of new presumptions of evidence. These presumptions are intended to lower the burden of proof for consumers. Therefore, as a producer , be aware of these tools for consumers. In principle, there must be a causal link between the damage and the product. Under the new directive, this connection is presumed to be present if the damage is caused by an "obvious malfunction of the product under normal use" or if the consumer proves that the product does not comply with mandatory safety regulations that are precisely intended to prevent the damage from occurring.
Despite these concessions, even then it may be difficult for a consumer to provide the evidence requested. Therefore, the proposal provides for a disclosure obligation for producers to provide information at the consumer's request under certain circumstances. This includes, for example, information regarding the production process of the product in question. Even if the manufacturer fails to comply with this obligation after being ordered to do so by a court, the product will be deemed defective.
Not only can the manufacturer be held liable
Finally, the directive regulates that there must always be a company in the EU that can be held liable. If the manufacturer is located outside the EU, the consumer can hold the importer of the product or the manufacturer's authorized representative liable for the damage he or she suffers.
If no EU importer or agent can be identified, a claim can also be made against "fulfillment service providers. In other words, (legal) persons offering at least two of the following services: storage, packaging, addressing and shipping of the product. Distributors can also be held liable, but only if there is no immediately identifiable relevant other EU-based operator. Finally, online platforms - such as marketplace.com, eBay or Amazon - can also be held liable if they manufacture, import or distribute the product in question. In conclusion, therefore, consumers who suffer damages due to a defective product can turn to a whole number of parties.
And now?
The new rules outlined above regarding product liability are currently still a proposal from the European Commission. It is not yet clear when this legislation will enter into force. First of all, this requires that the directive be implemented by the Dutch legislator in the Dutch Civil Code.
Nevertheless, it can't hurt to already take a closer look at the regulation for your company. The scope of application of the directive has been extended by this proposal to such an extent that your company may now fall under the obligations of the directive. In addition, it has become apparent that even if you are not the manufacturer of the product, you may also be held liable under product liability as an importer or even as a distributor.
