Product Liability & Safety 2024 Comparisons

Unless a consumer product is already subject to more specific EU legislation, it must meet (at least) the requirements of the General Product Safety Directive 2001/95/EC (GPSD). This Directive has been implemented into German national law by the Product Safety Act (ProdSG) and establishes a certain “basic safety net” with which all products of any kind must comply. In December 2024, however, the GPSD will be replaced by a regulation on general product safety, meaning it will be necessary to update the ProdSG almost completely.

In addition to or instead of general product safety law, which in Germany is regulated in substance by the ProdSG and formally by the Market Surveillance Act (or the EU Market Surveillance Regulation), more specific, so-called “sectoral harmonisation” laws often apply. These include, for example:

• the Restriction of Hazardous Substances Directive, implemented in Germany by the ElektroStoffV and relating to hazardous substances in electrical and electronic equipment;
• the Low Voltage Directive, implemented in Germany by the 1st ProdSV and relating to electrical products intended for operation with rated voltages between 50 V and 1000 V AC or 75 V and 1500 V DC;
• the currently still valid Machinery Directive, implemented in Germany by the 9th ProdSV and relating to machinery and partly completed machinery placed on the market in the EU;

• the Radio Equipment Directive, implemented in Germany by the FuAG (the Radio Equipment Act), which applies to all electrical/electronic products that can transmit and receive radio waves via an antenna for communication or location purposes;
• the Electromagnetic CompatibilityDirective, implemented in Germany by the EMVG (the Electromagnetic Compatibility of Equipment Act), which regulates the requirements for electromagnetic compatibility;
• the Toy Safety Directive, implemented in Germany by the 6th ProdSV;
• the EU Medical Devices Regulation;
• the EU Construction Products Regulation;
• the EU Cybersecurity Regulation; and
• the EU Gas Appliances Regulation.

Germany is a federal republic and delegates some far-reaching responsibilities and powers to the federal states. Product safety laws are also found at both the federal and state levels.

Generally, the manufacturer or importer of consumer products is responsible for the safety and legal conformity of their products. Compliance with this responsibility is randomly checked by the market surveillance authorities of the federal states.

The Federal Office of Consumer Protection and Food Safety (BVL) co-ordinates market surveillance programmes.

Products that fall under the ProdSG are monitored by the (regional) market surveillance authorities responsible for the ProdSG, such as the Top-County Offices or trade supervisory authorities.

At the federal level, the Federal Ministry of Labour and Social Affairs (BMAS) is responsible for the ProdSG, the associated ordinances and the corresponding EU directives. There are exceptions in the areas of toys (2nd ProdSV) and recreational craft (10th ProdSV), which are also the responsibility of the Federal Ministry of Economics and Energy (BMWi), as well as, for example, the EC Regulation on the Accreditation and Market Surveillance of Products.

The Federal Ministry of Food and Agriculture (BMEL), on the other hand, is responsible for the GPSD, which was implemented nationally with the ProdSG. The customs administration is involved through the Federal Ministry of Finance (BMF), which includes the Directorate General of Customs.

The ProdSG also assigns central tasks to the Federal Institute for Occupational Safety and Health (BAuA). As the national information and communication hub, it performs reporting, notification and information tasks in the context of market surveillance. BAuA supports the authorities responsible for market surveillance in a variety of ways, as follows.

• As the national contact point, it is responsible for official notification procedures to and from the EU Commission, and makes the results of German market surveillance on dangerous products available to other member states. Conversely, it receives notifications of defective and dangerous products from other member states, which it forwards to the competent authorities in the federal states.
• In consultation with the competent authorities or the EU, BAuA also carries out its own risk assessments of products. This applies to products where there is a justified assumption that they pose an immediate danger or a significant risk to health and safety.
• BAuA supports the surveillance concept of the competent authorities by scientifically evaluating the quality defects of products.

BAuA also leads the Product Safety Committee, which advises the BMAS on all issues related to the ProdSG.

Other important stakeholders at the federal level include:

• the Federal Network Agency (BNetzA), which is responsible for monitoring products subject to Directive 2014/53/EU on the making available on the market of radio equipment and Directive 2014/30/EU on electromagnetic compatibility;
• the Federal Motor Transport Authority (KBA), which is the competent authority for all vehicles intended for use on public roads;
• the Federal Office for Consumer Protection and Food Safety (BVL), which co-ordinates the activities of the food control authorities of the German states and is responsible for products such as cosmetics, food contact materials, toys, clothing and jewellery, which are regulated by the German Food, Commodities and Feed Act (LFGB);
• the German Institute for Construction Technology (DIBt), which monitors compliance with the requirements applicable to harmonised construction products;
• the Federal Institute for Chemicals (BfC), which is responsible for international activities in the regulation of industrial chemicals and the authorisation and evaluation of biocidal products, as well as the notification of biocidal products according to the Biocide Notification Ordinance; and
• the General Customs Directorate (GZD), which plays an important role in market surveillance, inspecting products imported from third countries and notifying the market surveillance authorities which, in turn, inform the customs authorities about dangerous or non-compliant products; the customs authorities can identify and report suspicious goods more quickly on the basis of so-called risk profiles.

The ProdSG requires manufacturers, importers and distributors to place only safe products on the market. Manufacturers must also conduct active market surveillance – for example, by taking random samples, investigating complaints and informing distributors, depending on how dangerous the product is.

Manufacturers must also take precautions to ensure that, in the event of a dangerous product, the danger is eliminated quickly and reliably. These measures must be proportionate to the product's characteristics and extend to withdrawal, appropriate and effective warnings, and recall. This means that manufacturers must operate a risk management system and take precautions in the event of a recall. Very similar requirements can be found in product-specific regulations, such as those for medical devices and pharmaceuticals.

It is also important that the competent authorities are informed as soon as it is known or there are clear indications that a product on the market poses a risk to the health and safety of persons. With the application of the new EU General Product Safety Regulation, the provisions on risk mitigation measures and in particular on recalls are not only broader but also more complex. In particular, substantive, formal and systematic requirements are specified, and deviations are generally not permitted.

German tort law also indirectly obliges manufacturers to prevent harm caused by their dangerous products and thus can be seen as a source of obligation to perform market actions as well.

According to Section 6 (4) of the ProdSG, manufacturers and importers are obliged to immediately inform the market surveillance authority responsible for their place of business if they know – or ought to know on the basis of the information available to them or their experience – that a consumer product which they have made available on the market presents a risk to the health and safety of persons; in particular, they must inform the market surveillance authority of the measures they have taken to prevent that risk.

Distributors also have certain obligations under the ProdSG. For example, according to Section 6 (5), a distributor may not sell consumer products if it knows they do not comply with the general requirements for products according to Section 3 of the ProdSG. In addition, distributors must notify the market surveillance authorities if they become aware of risks to the health and safety of persons posed by products.

However, the reporting requirements will change with the new EU Product Safety General, which will come into force on 13 December 2024. Manufacturers will be required to report accidents caused by a product through the EU's Safety Business Gateway if the accident results in death or serious injury. This limitation was not included in previous drafts, which would have meant that all accidents, no matter how trivial, would have had to be reported.

However, the question of how to interpret causation is likely to remain a challenge. Does every accident have to be reported, or only an accident caused by an unsafe (ie, dangerous) product? Must all accidents that occurred during the use of the product and not because of the product be reported?

Importers and distributors are also required to report accidents, but the report must be made to the manufacturer. The manufacturer must then either report the accidents on their own or instruct the importer or one of the distributors to make the report for them. The law does not provide for the importer or distributor to refuse this instruction. The new regulations therefore impose obligations on importers and distributors for which they may not currently have internal procedures in place.

Online marketplaces, on the other hand, have their own reporting obligations. It will be necessary to clarify how this reporting obligation can be harmonised with the above-mentioned obligations of the manufacturer and/or importer or distributor. There is reason to fear that, in the future, several reports on the same incident will be submitted to the authorities in an uncoordinated manner, thus burdening rather than relieving market surveillance.

Prior to the revision and restructuring, the ProdSG contained provisions on surveillance and sanctions. These are now supplemented by the new Market Surveillance Act (MÜG).

According to Section 40 of the ProdSG, repeated and persistent violations of individual, specific obligations under the ProdSG can be punished with imprisonment for up to one year or a fine. Manufacturers, importers and other addressees of the standard may be fined up to EUR50,000 if they violate the ProdSG intentionally or negligently. Section 39 of the ProdSG regulates the individual provisions on fines.

For example, a manufacturer commits an administrative offence and can be fined if they (intentionally or negligently) fail to include instructions for use with the product, contrary to Section 3 (4) of the ProdSG, even though this is the only way to ensure the safety and health of persons when using the product. It would also be an administrative offence if a manufacturer, contrary to Section 6 (1) No 2 of the ProdSG, does not state their contact address or does not state it correctly, or does not comply with the requirements in connection with the CE marking in accordance with Section 7 (2) of the ProdSG. Administrative offences can be punished with a fine of up to EUR100,000.

In the case of persistent repetition or deliberate action that endangers the life or health of another person or property of a certain value, a prison sentence of up to one year or a fine may also be imposed.

The absolute core of the initial situation for claims for damages and compensation for pain and suffering in the area of product liability is that a protected legal interest (such as health, body or property) is harmed by a defective product. The main legal bases for claims in such situations under German law are the “classic” product liability under the German Product Liability Act (ProdHaftG) and the so-called “producer liability” under Section 823 of the German Civil Code (BGB) (classic tort law).

Product liability and producer liability are not the same thing, however; this is often misunderstood or confused. Product liability and producer liability are two different bases for claims for liability due to defective products, and differ in their requirements and legal consequences. Product liability is strict liability under the German Product Liability Act, while producer liability is based on Section 823 of the BGB. However, product liability and manufacturer's liability exist in concurrence with each other. Product liability therefore does not exclude liability under Section 823 of the BGB but is examined as a no-fault basis for claims before Section 823 of the BGB.

The main prerequisites for liability claims against (quasi-)manufacturers or responsible importers in the EEA are:

• a defective product (or breach of the duty of care to place only “safe” products on the market);
• the consequential resulting violation or harm of a protected legal interest (such as the health of a human being or property); and
• no (statutory) exclusion of liability.

If the claimant builds their claim based on tort law, the level of negligence on the part of the manufacturer (and that of the claimant) – or third parties – become relevant as well.

The persons or legal bodies who suffered harm or damage to their protected legal interests due to a defective product have standing to bring claims for product liability.

Claims according to Section 1 of the ProdHaftG become statute-barred after three years, according to Section 12 thereof. The commencement of the limitation period is determined by the date on which the claimant became aware of the defect, or should have become aware of it. Otherwise, a claim under Section 1 of the ProdHaftG becomes statute-barred ten years after the date on which the manufacturer put the product into circulation, in accordance with Section 13 I of the ProdHaftG.

Claims according to Section 823 of the BGB are subject to the so-called “regular statute of limitations” and expire after three years, according to Section 195 thereof; the period begins at the end of the year in which the damage and the responsible party became known (or should have become known).

The requirements to invoke the jurisdictions of the courts in Germany are still under discussion. According to the European Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Article 5 No 3 of the Brussels I Regulation), the court of the place where the harmful event occurred has jurisdiction in product liability cases. According to the established case law of the ECJ, this can be either the so-called “place of performance” (or the place of the accident) or the place where the chain of causes of the damage was set in motion (the “place of action”), with the plaintiff having the right to choose between these two places.

In 2014, the ECJ had to decide whether the place of action is:

• the place where the product was manufactured;
• the place where the product was marketed; or
• the place where the user acquired the product.

The ECJ ruling clarifies that, in intra-European cross-border product liability cases, actions can always be brought at the place of manufacture, as this is the place of action.

Under German law, there are no mandatory steps that must be taken before proceedings can be commenced formally. Product liability claims and proceedings are the usual claims and need to be treated, prepared and engaged as any other type of civil law claims.

German law does not currently contain anyrules for the preservation of documents and other evidence in product liability cases. However, the claimant may need to prove their claims (and the defendant theirs), in which case not having sufficient proof at hand would obviously be a problem.

German law does not currently contain any rules relating to the disclosure of documents or other evidence in product liability cases, but things will change with the implementation of the new EU Product Safety Regulation on the one hand, which foresees an obligation to preserve documentation on product safety and risk-related topics and, with the currently still discussed draft of a new EU Product Liability Directive on the other. The latter foresees not only a dramatic shift in the burden of proof system in favour of claimants (under certain requirements) but also the possibility of a disclosure and discovery order by courts against the defendants in special cases – ie, when situations and technical aspects are complex and the claimant, although showing the likeliness of a string of events that lead to liability, has no option other than assessing internal documents on the defendant’s part. This is a major topic that lawyers and other stakeholders should monitor very closely.

Experts will be appointed by the court, and the general rules apply.

Generally, the burden of proof lies with the injured party. However, for claims under the Product Liability Act or under Section 823 of the BGB (“tort law”), the burden of proof is reduced. In simple terms, this means that the injured party “only” has to prove that a product was defective and that this defect was the cause of the damage and/or pain suffered. In this regard, the time of the injury is relevant, but not necessarily that the defect was present when the product was placed on the market. The burden of proof is thus effectively reversed in this respect, as the manufacturer must now prove that the product was free from design, manufacturing and instruction defects when it was placed on the market, and/or that it did not culpably breach any of the duties of care incumbent upon it.

These principles, which are already in place, will most likely be further adjusted in the future to the benefit of plaintiffs or to the detriment of producers and other stakeholders; see 2.7 Rules for Disclosure of Documents in Product Liability Cases.

Germany does not have jury courts. Regular courts based on general civil procedure legislation are the competent courts and will lead the case as any other. Damages under German law are thought to provide sufficient compensation for the actual and proven damages and pain suffered. There are no punitive damages or similar.

As stated in 2.10 Courts in Which Product Liability Claims Are Brought, product liability claims and court procedures are regular civil law cases. Therefore, appeals and timeframes are no different than for non-product liability cases. Timeframes are neither defined nor foreseeable – they depend on many factors on a case-by-case basis.

The defences to product liability claims work the same as most other defences against civil law claims: if required, the defendant needs to show or even prove that the claimant's assumptions are not correct or true. From a strategic perspective, it is therefore most helpful to have sufficient documentation on the design, testing and use case descriptions of a product and accompanying performance of the manufacturer, such as market and product monitoring, in order to prove that the major obligations of a manufacturer are being and have always been fulfilled (placing only safe products on the market, monitoring the market, etc).

Non-compliance with regulatory requirements may not only be a clear indication of a (further) breach of due diligence obligations but may also be a direct indication of the defectiveness of the products concerned and thus of the liability of the responsible economic operator.

Consequently, this may also mean that the management of the company is personally liable for their own company, since it is possible that their own company was not managed with sufficient care.

If brought to regular state courts, product liability claims are treated as any other. Thus, a loser-pays principle applies, under which all costs for the court, witnesses and attorneys (based on the statutory compensation volumes) are to be paid by the party that “loses” a case.

In Germany, litigation funding has gained considerable importance, particularly in the context of mass tort litigation. Litigation funding is characterised by the fact that a third party not involved in the (arbitration) proceedings provides a party with all or part of the financial resources required to conduct the litigation. In return, the financier typically participates in the proceeds obtained by the financed party in the litigation – usually in the form of a percentage share and/or a so-called multiple of its investment. If the case is lost, the financier usually bears the full risk and loses its investment, while the financed party enjoys non-recourse.

Since 1 November 2018, consumer attorneys in Germany have been able to file lawsuits against companies on behalf of consumers. In these so-called “model declaratory actions”, the courts can determine – at the request of a model plaintiff acting as a class action plaintiff – whether the requirements for comparable consumer claims against the company being sued are met. The claims can be based on all areas of law (eg, product liability law), always provided that consumers were (allegedly) affected by the business activity. This is obvious in the case of consumer products. However, even companies in the supply chain that have no direct contact with consumers can be exposed to consumer claims if consumers are affected by the use of the product.

Despite these precautions, however, this new type of action remains risky for companies, because a declaratory judgment action does not replace the already possible and well-established “non-genuine class actions”, in which special purpose entities assert assigned claims of allegedly injured parties, but rather takes its place alongside them. As a result, plaintiffs in non-genuine class actions will be able to free-ride on the results of the model declaratory judgment action.

However, not every consumer protection organisation is entitled to sue: only associations with legal capacity that have been officially registered as consumer protection associations for at least four years prior to the filing of the action and that have a minimum number of members (ten associations or 350 natural persons) may bring an action. Associations may not engage in commercial activities nor pursue commercial objectives. They may not receive more than 5% of their financial resources from businesses, and must disclose their financial structure in the event of a dispute. Consumer advice centres or consumer associations that receive substantial public funding may bring an action in any case. The model declaratory action is only admissible if at least 50 consumers have submitted claims to the claims register within two months of the public announcement.

Class actions based on the EU model are another important tool. EU Directive 2020/1828 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC, which was adopted on 24 November 2020, has paved the way for collective or representative actions across Europe. It sets minimum standards for representative actions across Europe, but leaves the specific form of the legal framework to the member states. The scope of representative actions is defined quite broadly by the Directive. Similar to the model declaratory action, a European representative action can only be brought by so-called qualified entities. Member states may decide whether consumers who have their habitual residence in the member state where the representative action is brought must actively join the representative action (opt-in mechanism) or explicitly opt out of the representative action.

In a European Court of Justice judgment of 5 March 2015, which is still relevant (ECJ (U)C 503/13 and C 504/13), the Court ruled that it is sufficient for certain products (those with a particular potential risk to life and limb – in this case pacemakers) to be considered legally “defective” if a potential defect has been identified. By this approach, courts overcome the hurdles relevant under both product safety law and product liability law concerning proof of a “defect product”. This case law was then also confirmed in Germany – eg, in its decision of 22 March 2022 (Case No 3 U 32/18), the Higher Regional Court of Brandenburg stated that certain medical devices are already deemed to be defective if a significant number of products of the same product group or production series have a malfunction, with the result being that all products of this group or series are to be classified as defective due to a potential defect, without it being necessary to prove a defect in the specific product.

Also of interest is the German jurisprudence in the “Dieselgate” scandal and the resulting clear position of the German courts on claims for damages by injured parties. Among other things, the German Federal Court of Justice ruled on 25 February 2020 (docket no 25.5.2020 VI ZR 252/19) that “it is tantamount to direct fraudulent deception of the vehicle purchaser if a vehicle manufacturer, as part of a strategic decision taken during engine development, fraudulently obtains the type approvals of the vehicles by deceiving the Federal Motor Transport Authority and then places those vehicles on the market, deliberately exploiting the guilelessness and trust of the vehicle purchaser”.

Another interesting decision of the European Court of Justice of 7 July 7 2022 (case number C-264/21) shows how quickly a company can be considered a so-called “quasi-producer” with all the attendant obligations and consequences by affixing its name to a product. The Court states: “Article 3 I of 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, as amended by Directive 1999/34/EC of the European Parliament and of the Council of 10 May 1999, must be interpreted as meaning that the term 'producer' within the meaning of that provision does not require that a person who has affixed their name, trade mark or other distinguishing mark to the product or who has 'authorized' the affixing of such a mark must also identify themselves in some other way as the producer of the product.”

Both areas are on the verge of extensive renewal by the EU. Not only will the previously relevant Product Safety Directive be replaced by a regulation and thus be subject to much more direct regulation by the EU, but it is also clear that the almost 40-year-old Product Liability Directive and the almost 20-year-old Product Safety Directive will be brought into the 21st century: digital content, software, AI and nowadays absolutely common distribution channels such as trading platforms on the internet are being comprehensively regulated or at least reassessed from a current perspective. This development can also be seen in “accompanying” regulations, such as the directive on sustainable supply chains (CSDDD), the Ecodesign Regulation, the Battery Regulation, the (planned) Packaging Regulation, the AI Act, etc. The EU is stepping on the gas and rolling out an unprecedented amount of product and production-related regulations. Much of this content was also triggered and guided by the EU's Green Deal.

The EU and therefore Germany find themselves in front of a huge “wave” of either updates or completely new regulations that deal with product and product regulation, and therefore with product safety and liability. The most relevant are (in no particular order):

• Regulation (EU) 2023/1542 concerning batteries and waste batteries (eur-lex.europa.eu);
• Regulation (EU) 2023/988 on general product safety (eur-lex.europa.eu);
• the proposed Directive on liability for defective products (eur-lex.europa.eu);
• proposals to adjust the restriction of PFAS chemicals (echa.europa.eu/de/registry-of-restriction-intentions);
• Directive (EU) 2022/2555 on measures for a high common level of cybersecurity across the Union (eur-lex.europa.eu);
• the Cyber Resilience Act (eur-lex.europa.eu);
• the EU AI Act (europarl.europa.eu); and
• the CSDDD (eur-lex.europa.eu).