Contributed By Kennedys
The EU product safety regime is a sophisticated, multi-faceted one which seeks to balance the rights of consumers, patients and users of products, with the rights of businesses. Its principal aim is to provide the highest level of public and patient safety without stifling innovation, framed around the three key legislative pillars set out below.
Underpinned by the EU’s core principles of free movement and maximum harmonisation, and with the public’s safety as its goal, the regime has three complementary limbs consisting of:
The product safety regime includes numerous pieces of legislation which both complement and overlap each other.
Separate product safety regimes
The following products, which give rise to unique and distinct risks, are subject to their own legislative frameworks which operate independently from other product safety legislation:
Supplementary sector-specific safety requirements
These work in concert with the general product safety regime detailed below, to have effect where there are specific risks introduced by recognised product categories. Sector-specific laws include those relating to:
General product safety regime
For consumer products that fall outside the sector-specific regimes listed above, or where regimes are silent, the general product safety framework applies by way of the General Product Safety Directive or GPSD (Directive 2001/95/EC) which mandates overarching requirements for product safety of consumer products in the EU. The GPSD requires all products to be safe in their normal or reasonable foreseeable usage. Member states hold powers to take suitable action should this obligation not be met.
It is possible that other relevant regimes may apply, including:
Member states are involved in drafting the above-mentioned applicable regimes to a varying degree, dependent on the nature of the EU laws applicable – with Regulations being directly applicable and member states needing to implement Directives into local laws to make them legally binding. Evidently, although the EU system always strives for maximum harmonisation across the laws of all EU member states for which an EU law is the basis, local implementation of laws tends to increase the likelihood for local deviations and variance.
When Does the Product Safety Regime Apply?
Generally, the product safety regime applies:
Determination of which EU regime is applicable can be a complex process and should always be carefully considered.
There is no EU-level regulator that oversees product safety. Generally, there are member state/national-level regulators for product safety – those that oversee and regulate general consumer products and product-specific regulators that oversee specific product categories, such as medical devices and consumer health products. Generally, the demarcation between these types of regulators is along the lines of the applicable regulatory regimes, as outlined in 1.1 Product Safety Legal Framework.
Across the EU, there is generally no hierarchy of regulators. Regulators of specialist product categories have different ambits of work, however, and regulators are therefore not layered in terms of oversight and there is generally a single layer of regulation.
EU-Wide Regulatory Agencies for Specific Product Categories
Whilst there are no regulators at an EU-wide level per se, there are relevant EU-wide regulatory agencies for some product categories, including medicines (the European Medicines Agency (EMA)) and chemicals (the “European Chemicals Agency” or ECHA). Whilst these organisations do not typically get involved in actual enforcement practices, or authorisation processes, they do provide expert guidance and broader policy input.
The European Commission (EC) also regularly produces relevant guidance and interpretation, including with expert groups who are specialists in specific product categories. For example, the Medical Devices Expert Group (MDG) of the EC produces comprehensive guidance in respect of the medical devices regime, in the form of the MEDEEV guidance documents. The EC’s key role in ensuring compliance with EU-level product safety regulations also extends to requiring member states to take specific actions in certain circumstances where warranted, for example, requiring a temporary ban, recall or withdrawal from market of unsafe products on the EU market.
Generally, specialist regulators are also empowered to enforce the specific regimes.
Greater Centralisation of the EU Product Safety Regime
In general, the issue of enforcement of product regulatory regimes was historically left to the member states, and was not governed at EU level. This led to widely discrepant regulatory enforcement practices across the EU – and often resulted in criticism that the enforcement of the EU product safety laws was a weak link in an otherwise sophisticated regime.
Against this backdrop, there has been an increasing focus in recent years on increased, and more robust, enforcement practices, but also increased EU-wide enforcement practices for product safety generally, as part of the EU’s Goods Package. In particular, the new Market Surveillance Regulation (2019/1020, MSR), aims at enhancing, as well as harmonising, enforcement powers across the EU, as does Directive (EU) 2019/2161 on the better enforcement and modernisation of EU consumer protection rules, which came into force in January 2020.
Post-market Surveillance Requirements
Alongside pre-market requirements, post-market requirements are a fundamental aspect of product safety regimes in the EU. There are varying requirements and trigger points for post-market surveillance obligations and record-keeping practices across various product categories. Some examples of the more onerous requirements are set out below.
Manufacturers, and in some instances other actors in the supply chain, have an obligation to address any product safety risks that become apparent in their products once they are circulating in the market, including by way of recall or withdrawal from the supply chain.
Post-market surveillance obligations for medical devices, for example, generally requires the existence of:
Under Article 5(1) of the GPSD, producers must “adopt measures commensurate with the characteristics of the products they supply”. This would typically include, for example, warning consumers, withdrawing products from the market where required, and, if required, recalling products. Similar provisions exist in sector-specific legislation.
Classification of product safety risks is determined, according to the GPSD, by undertaking a risk assessment. Such an assessment determines risk by assessing the possible severity of harm and likely probability of any risk identified. Though the GPSD itself is silent on how such an assessment should be performed, the EC has previously published guidance on how to approach said assessment as well as an online tool.
In general, risks determined can be categorised as follows:
Specific products may have more prescriptive rules or guidance for recall (for example, motor vehicles, medicinal products and medical devices).
Article 5(3) of the GPSD requires producers and distributors to “immediately inform the competent authorities” of the member state in which the products in question are or have been, marketed or otherwise supplied to consumers where they “know or ought to have known” that the product they have marketed is unsafe.
Notification involves, depending on the nature of the product in question, the following.
The EC “Safety Gate” system is an online platform that facilitates notification of several relevant member states simultaneously. This system was formerly known as “RAPEX”.
Given the need for EU-level product safety laws to be implemented into national legislation by member states, member states are empowered to impose penalties for a breach of product safety regulations. Such penalties can range considerably, and include monetary fines and – in rare instances – imprisonment of key individuals.
The EU mechanisms for product liability claims apply regardless of product classification, and generally can be divided into four main categories, as set out below. These mechanisms of liability all work together in the EU. The strict liability regime is generally preferred by claimants for the primary reason that it requires no proof of fault. However, in reality, parallel causes of action tend to be pursued by claimants in order to benefit from as many regimes as possible.
Generally, the below offences create civil liability. However, criminal offence provisions also exist under the GPSD.
Statutory Liability Under Product Liability Laws
EU 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 (the “Product Liability Directive” or PLD) establishes strict liability offences for defective products, also referred to as a “no fault” regime. Key features of the legislation include:
In bringing a claim, claimants are required to prove the following elements exist:
Those entitled to bring claims under the PLD are “injured persons”. There can be multiple claimants bringing a joint action in many instances, though not to the extent of amounting to a so-called class action in many instances.
Generally, claims under the PLD must be brought within three years from “the day on which the plaintiff became aware, or should reasonably have become aware of the damage, the defect and the identity of the producer”. Member state laws may also apply to allow for a suspension of this time limit in some circumstances. The PLD also stipulates that the period for bringing claims is completely extinguished “10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer”. This is known as the ten-year long stop period.
Liability in the Tort of Negligence
Unlike the above-mentioned PLD-based action, negligence claims require establishment of some fault on the part of the manufacturer and/or defendant party. The elements of this claim are determined by member state laws that apply.
Liability in Contract
Liability in contract can be made out under the Consumer Sales and Guarantees Directive (1999/44/EEC) where a seller, that is “any natural or legal person who, under contract, sells consumer goods in the course of his trade, business or profession” sells a product that does not conform to the contract of sale.
Breach of Product Safety Regulation
In respect of unsafe products, there is also a possible cause of action for breach of product safety regulation.
Article 4 of the PLD stipulates that the “injured person” is entitled to bring an action.
Individual claimants injured by a defective product may choose to commence proceedings under the PLD. However, as noted in 2.1 Product Liability Causes of Action and Sources of Law, in reality, parallel causes of action tend to be pursued by claimants in respect of a single product.
Generally, claims under the PLD must be brought within three years from “the day on which the plaintiff became aware, or should reasonably have become aware of the damage, the defect and the identity of the producer”. Member state laws may also apply to allow for a suspension of this time limit in some circumstances.
The PLD also stipulates that the period for bringing claims is completely extinguished “10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer”. This is known as the ten-year long stop.
PLD and/or Negligence Claims
The rules for determining whether the jurisdiction of EU courts is triggered, and if so which courts (in terms of which member state) in respect of PLD and/or negligence claims are notoriously complex.
Regulation (EC) 864/2007 on the Law Applicable to non-contractual obligations (Rome Regulation II), provides the following parameters to help determine in which EU court the claim can be validly brought (on the proviso the product was marketed in that country):
For contractual claims, unlike the above-mentioned PLD and negligence claims, choice of law/forum is usually a feature of any contractual agreement such that the above laws are not relevant. However, in the absence of such common contractual provisions, Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I Regulation) can apply to product liability matters. Generally, the requirement under this law provides that “a contract for a sale of goods shall be governed by the law of the country where the seller has ‘habitual residence’”. This requirement supplements any country-specific requirements in that regard.
Given the complexity of these above regimes, careful legal analysis must be deployed to ensure the correct jurisdiction of the claims applies, as often this can be the determining factor of whether a claim succeeds or fails.
Regulation (EU) 1215/2012 of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (Recast Brussels Regulation) regulates jurisdiction and the recognition and enforcement of judgments between EU member states.
The member state in which the product liability claim is made often has specific pre-litigation steps a claimant must take before being permitted to bring a formal claim.
Member states within which a product liability claim is made often have their own rules protecting against the destruction of evidence and/or maintaining preservation of evidence in respect of product liability claims.
Within the EU, claims can and do proceed even in the absence of the “defective” device or product itself.
Requirements for disclosure in product liability cases are heavily reliant on the rules of each member state within which the claims are brought. The rules for which documents may be withheld on the basis of legal privilege differ vastly from member state to member state. In addition, common law system countries tend to have wider concepts of disclosure than civil law system countries.
Rules in respect of expert evidence in product liability cases are heavily reliant on the rules of each member state within which the claims are brought. Generally, however, EU rules governing such evidence are strict.
In a similar vein to the concept of disclosure, civil law systems often have more stringent formalities attached to and greater weight placed on expert evidence, in comparison with common law systems. It is also the case for oral vs written testimony and collaboration between opposing parties and their experts. Additionally, the courts in some EU jurisdictions are heavily guided by a court-appointed expert.
Under the PLD, the strict liability mechanism means claimants are not obliged to prove negligence or fault of the defendants. Article 4 of the PLD specifies that the “injured person” is entitled to bring an action and must only prove damage, the defect and the causal relationship between defect and damage.
The mechanism and standard of proof required is determined in the member state within which the claim is brought.
The applicable civil procedure rules for any claim brought under the PLD will be determined by the laws of the member state within which the claim is brought.
Article 267 of the Treaty on the Functioning of the European Union allows the Court of Justice of the European Union (CJEU) to hear matters referred to it from national courts in respect of any claims stemming from the PLD. As the highest European court, the CJEU is the final decision-maker in any interpretation of EU law. Pending any judgment of the CJEU, local proceedings in member states are stayed.
Any mechanisms available to claimants in product liability claims are determined by the laws of the member state within which the claim is brought.
As noted in 2.10 Courts in Which Product Liability Claims Are Brought, the CJEU is the final decision-maker in any interpretation of EU law and any matters referred from national courts.
The statutory defences available to a defendant, the subject of a product liability claim, are set out under Article 7 of the PLD. These include the following:
The issue as to whether a product, which is subject to strict EU safety regulations and the requirements therein, can be defective if it complies with said regulations, remains a point of contention.
Whilst it appears that regulatory compliance will rarely be a full defence, compliance with the requirements of product safety regulations remain an important factor when considering a consumer’s legitimate expectations under the PLD.
It is also the case that a breach of regulatory obligations can, on its own, give rise to separate liability which, in some circumstances, can lead to criminal sanctions against individuals of defendant companies.
Rules for payment of costs are determined by the laws of the member state within which the claim is brought.
Rules in respect of the availability of funding are determined by the laws of the member state within which the claim is brought.
Each member state has its own specific procedures and rules in relation to mass litigation/collective redress with a wide disparity between the quality of such systems across the member states. Some countries have a high functioning system of collective redress in mass harm situations, for example the Netherlands and Denmark, whilst others, including Ireland, Cyprus and Latvia have poorly functioning systems regarding actions for mass harm.
Member states are, however, in the process of being required to implement into local laws an EU-wide collective redress regime. Directive (EU) 2020/1828, the Collective Redress Directive, which came into force in December 2020 and will become effective across the EU in 2023, aims to improve consumers’ access to justice and to facilitate redress where a number of consumers are victims of the same infringement of their rights. The Directive mandates that a procedure for representative actions is available across the entirety of the EU and introduces safeguards for the avoidance of abusive litigation and illegal practices. This will have a sizeable impact on EU jurisdictions with non-existent or poorly functioning systems for collective redress/mass tort litigation. Further detail is provided in 3. Recent Policy Changes and Outlook.
Product liability cases which interpret the PLD are relatively infrequent in the EU. However, a recent case offers an interesting insight into the CJEU’s views on what constitutes a defective product and, perhaps more widely, the potential application of the PLD to software and other digital content.
In the case of Krone, Case C-65/20, a product liability claim was raised against Krone, an Austrian newspaper publisher, for damages suffered by a reader who had followed incorrect herbal medicinal advice for treating rheumatic pain, that had been included in an issue of the newspaper of which she had referred to a printed copy. The question was referred to the CJEU for consideration.
The CJEU considered “whether health advice which, by its nature, constitutes a service, can […] result […] in the newspaper itself being defective in nature”. It found that the printed newspaper acted as “merely the medium” of the service of providing inaccurate health advice. In separating the health advice from the printed newspaper and labelling it as a service, the CJEU concludes that the information – the medical advice – is excluded from the scope of the PLD and therefore inaccurate health advice included in a printed newspaper copy does not constitute a “defective product”.
Given the growing presence of consumer goods that use software and digital content along with the complex liability risks involving digital technologies that blend both the physical and digital spheres, such as IoT and AI, this judgment has the potential to have far-reaching consequences, particularly as to whether non-tangible products, such as software and other digital content, can qualify as a “product” for the purposes of the PLD.
Though there continues to be disparity between member states, it is widely acknowledged that product liability risks continue to rise. The availability and frequency of litigation are also increasing.
New Enforcement Practices
In response to the renewed focus on product safety enforcement, increased attention is being paid to market surveillance and regulators are being given greater powers, including by way of the implementation of new legislation in this area. This is reflected in the proposed revisions to the GPSD that seek to align market surveillance rules to clarify obligations for economic operators to enhance market surveillance of dangerous products and facilitate more effective recalls.
Focus on Online Selling
In line with the general principles of EU product liability laws, there is now an increased focus on properly ascribing responsibility to online sellers in respect of product safety compliance obligations and breaches of the same, including by way of a requirement to have a local entity in place to nominally be responsible for these issues.
In July 2021, the MSR came into force to bring online platforms (OPs), including online marketplaces, within the remit of the EU’s product safety framework, establishing more robust processes for market surveillance, compliance controls and promoting closer cross-border co-operation among enforcement authorities.
The EU-led “Product Safety Pledge” is a voluntary commitment, which goes beyond product safety legal obligations. It contributes to the faster removal of dangerous non-food consumer products offered for sale online and sets out actions by online marketplaces to strengthen product safety, such as providing a clear way for customers to notify dangerous product listings.
In addition, the proposed revisions to the GPSD seek to regulate the conduct of online marketplaces and lay down specific obligations for companies operating the same.
Given the further growth of online sales during the COVD-19 pandemic, this topic is one of particular focus for regulators and law makers alike.
Development of Collective Redress Regime
Over the last decade, the EC has worked towards providing the means by which all EU consumers can bring collective actions in respect of infringements of EU law, referred to as “collective redress”.
The Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers 2020/1828 (the “Collective Redress Directive”) empowers qualified representative entities to bring collective actions and seek injunctive relief and/or redress on behalf of groups of EU consumers who have been harmed by “illegal practices” that breach European laws, including the PLD and the GPSD.
The Directive, now in force, supplements existing national procedural mechanisms aimed at the protection of collective consumer interests and is in the process of being transposed into member states’ domestic legislation.
Modernisation of Product Safety and Liability Regimes
Ongoing review at EU level in respect of the fitness of product liability laws to respond to issues created by modern technologies continues to remain at the forefront of discussions, including within the proposed revisions to the GPSD.
Corporate Social Responsibility and Environmental Stainability
There continues to be a broadening of product compliance obligations to incorporate concepts of corporate social responsibility, environmental sustainability and increased focus on these areas. On 23 February 2022, the EC adopted a proposal for a Directive on corporate sustainability due diligence. The aim of this Directive is to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance. The new rules will ensure that businesses address the adverse impacts of their actions, including in their value chains inside and outside Europe.
There are wide-ranging imminent policy developments in respect of product liability and safety in the EU in response to long-standing issues that have been being grappled with for some time.
On 21 April 2021, the EC published its proposal for a regulation laying down harmonised rules on artificial intelligence with the first ever legal framework on AI to address the risks and trustworthiness of AI.
The EC’s proposals were followed by the publication of a draft report by the European Parliament’s Special Committee on Artificial Intelligence in a Digital Age (AIDA), which stresses that the EU should focus on fostering the enormous potential of AI. The report was adopted following a vote by the Special Committee on 22 March 2022.
Digital Content and Services
On 1 January 2022, the new EU rules on digital content and the sale of goods entered into force. Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services and Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods, are intended to harmonise key consumer contract law rules across the EU and introduce harmonised rules for digital content and digital services within the EU. For example, if digital content is or digital services are faulty, consumers now have rights similar to those they have when they buy defective tangible goods and, if the problem persists, may claim a price reduction or terminate the contract and claim a refund. This applies not only where consumers have paid for the content or services but also where they have provided personal data to the entrepreneur.
In addition, entrepreneurs who provide digital content or services as well as sellers of goods with digital elements (eg, a smartphone with its operating system or “smart products”) are now required to supply consumers with updates that are necessary to keep the content, services or goods in conformity – especially but not necessarily limited to security updates. This obligation continues to apply for as long as the consumers may reasonably expect such updates in the individual case, which could be significantly longer than the statutory warranty periods.
Sustainability and Environment
As noted above, on 23 February 2022, the EC adopted a proposal for a Directive on corporate sustainability due diligence. The aim of this Directive is to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance. The new rules will ensure that businesses address the adverse impacts of their actions, including in their value chains inside and outside Europe.
On 20 January 2022, the EC launched a public consultation seeking views on the proposed revision of REACH aiming to align the EU chemical rules with the EC’s ambition for safe and sustainable chemicals and a high level of protection of health and the environment, while preserving the internal market.
The consultation is wide in scope and covers a range of topics including the revision of registration requirements, such as establishing the obligation to register polymers, simplification of communication in supply chains and the revision of provisions for control and enforcement.
In a similar vein, the EU opened a public consultation, which recently closed on 21 June 2022, to consider how Cosmetics Products Regulation No 1223/2009 could be improved in order to protect public health and the functioning of the internal market. This proposed targeted revision of the Cosmetics Products Regulation sits alongside the proposed revision of other key chemicals legislation, including REACH and the CLP Regulation No 272/2008 regarding the classification, labelling and packaging of substances and mixtures, forming part of the EC’s ambitious Chemical Strategy for Sustainability, and the wider European Green Deal, which seeks to protect citizens and the environment against hazardous chemicals and encourage innovation to foster the development of safer and more sustainable alternatives.
Food Technological Practices
The EC has two public consultations that are currently open addressing goals outlined under the European Green Deal and the “farm to fork” strategy.
The food waste initiative aims to propose legally binding targets to reduce food waste. These targets will help limit the food supply chain’s impact on the environment and climate and ensure more food is available for human consumption, thereby creating a more sustainable food system. In a similar vein, the Initiative on plants obtained by new genomic techniques aims to maintain a high level of protection for human and animal health and the environment, and enable innovation in the agri-food system. The Initiative will propose a legal framework for plants obtained by targeted mutagenesis and cisgenesis and for their food and feed products. It is based on the findings of a Commission study on new genomic techniques.
On 20 January 2022, the EC launched a public consultation seeking views on the proposed revision of EU REACH aiming to align the EU chemical rules with the EC’s ambition for safe and sustainable chemicals and a high level of protection of health and the environment, while preserving the internal market. See the Sustainability and Environment section above.
The consultation is wide in scope and covers a range of topics including the revision of registration requirements, such as establishing the obligation to register polymers, simplification of communication in supply chains and the revision of provisions for control and enforcement.
Perfluoroalkyl and Polyfluoroalkyl substances (PFAS) are subject to stringent regulation, including REACH restrictions, the Classification, Labelling and Packaging Regulation and the Drinking Water Directive. The EC has also pledged to phase out all PFAS, allowing their use only where they are proven to be irreplaceable and essential to society. Please refer to the EU Trends & Developments article in this guide for further information.
The impact of COVID-19 on all stakeholders (business, third parties, governments, regulators and insurers) has been unprecedented. Given its importance to the fight against COVID-19, the life sciences industry has been disproportionately impacted.
In particular, the pandemic has resulted in demand for the rapid production of specific products, such as diagnostic tests, vaccines, treatments and personal protective wear. The race to combat COVID-19 has also been a catalyst for a shift towards the following trends in the regulatory framework and processes, as well as industry practices.
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