Product Liability & Safety 2023 Comparisons

General Overview

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:

• mandatory obligations for all economic operators within the supply chain;
• minimum competence requirements for any third parties assessing product or quality management systems; and
• market surveillance mechanisms.

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:

• medical devices;
• pharmaceuticals; and
• food and nutrition supplements.

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:

• biocides;
• cosmetics;
• chemicals;
• toys;
• low-voltage electrical equipment;
• motor vehicles;
• machinery;
• radio equipment; and
• personal protective equipment.

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 reasonably foreseeable usage. Member states hold powers to take suitable action should this obligation not be met.

The GPSD is subject to reform proposals, as set out in the European Commission’s proposal for a General Product Safety Regulation (GPSR) first published in June 2021. The GPSR aims to update the existing framework to enable it to adapt to the challenges posed by the modern digital age and reinforce safety for products sold both offline and online. The European Council adopted the GPSR on 25 April 2023 and is due to be signed by the Presidents of the European Parliament and Council, following which it will be published in the Official Journal of the European Union and will enter into force on the 20th day after its publication. Please refer to 3.1 Trends in Product Liability and Product Safety Policy for further detail.

It is possible that other relevant regimes may apply, including:

• Regulation (EC) No 1272/2008 on classification, labelling and packaging of substances and mixtures (the “CLP Regulation”), which places obligations on manufacturers to appropriately label, classify and pack products containing any dangerous substances and mixtures;
• Regulation (EC) 1907/2006 on the registration, evaluation, authorisation and restriction of chemicals (REACH), which acts to regulate both production and use of chemical substances;
• Directive 2009/48/EC on the safety of toys, which lays down criteria that toys must meet before they can be marketed in the EU;
• Directive 2011/65/EU on the restriction of the use of certain hazardous substances in electrical and electronic equipment (the “recast RoHS Directive”), which regulates the restriction on the use of certain hazardous substances in electrical and electronic equipment;
• Directive 2012/19/EU on waste and electronic equipment (the “recast WEEE Directive”), which regulates waste electrical and electronic equipment (WEEE) and allows for collection schemes in respect of consumer products;
• Regulation (EU) 1007/2011 on textile fibre names and related labelling and marking of the fibre composition of textile products (the “Textiles Regulation”), which outlines fibre names and related labelling requirements for textile products;
• Directive 2014/53/EU Radio Equipment, which outlines the framework for placing such equipment on the market; and
• Directive 2014/30/EU on Electromagnetic Compatibility (EMC), which outlines the requirements for the design and testing of electronic and electrical products to ensure they do not give rise to electromagnetic interference.

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:

• where a product is “placed on the market” in the EU, and to any subsequent action which could be considered placing the product on the EU market until it reaches the end user;
• in respect of all forms of selling, including e-commerce or tangible stores;
• in respect of newly manufactured, used or second-hand products;
• to products that enter the EU for the first time after being imported from a third country;
• to finished products; and
• to products that have been subjected to important changes or amendments aiming to modify their original performance, purpose or type.

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 and introduced changes to four consumer protection laws, namely the Unfair Commercial Practices Directive (2005/29/EC), the Unfair Contract Terms Directive (93/13/EEC), the Consumer Rights Directive (2011/83/EU) and the Price Indications Directive (98/6/EC).

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:

• a comprehensive system to gather information on patient use of the product (post-market surveillance system);
• the appointment of a responsible person to ensure continued compliance of products;
• the existence of a post-market surveillance system for collecting information and characterising the safety and performance of the device, or family of devices; and
• methods and processes to assess the collected information.

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.

Risk Assessment

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:

• low risk – not normally requiring action for products on the market;
• medium risk – normally requiring some action;
• high risk – normally requiring rapid action; and
• serious risk - normally requiring rapid action.

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.

• Pharmaceutical products: marketing and/or manufacturing authorisation holders are obliged to report to the EMA and any affected member states regarding any product quality defect, including a suspected defect, of a centrally authorised medicine which could result in a recall or abnormal restriction on supply.
• Cosmetic products: cosmetics regulations require notification to relevant member state competent authorities, without delay, of any serious undesirable effects (SUEs) attributable to the use of cosmetics.
• Products where the general consumer product safety regime applies in terms of reporting obligations: generally, there is a risk-based requirement to report to authorities in the event a product is not compliant with the applicable product safety regime.
• Medical devices: medical device manufacturers are legally required to report adverse incidents and Field Safety Corrective Actions (FSCAs) to EU Competent Authorities.

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:

• manufacturers, importers and suppliers being jointly and severally liable;
• liability arising “for damage caused by a defect” in a product; and
• “product” being defined broadly as “all moveables” but expressly excluding “primary agricultural products and game”.

In bringing a claim, claimants are required to prove the following elements exist:

• damage, including personal injury and/or property damage;
• defect – a product is generally defective when “it does not provide the safety which a person is entitled to expect”, taking into account “all circumstances”, including but not limited to the product’s presentation, the use(s) to which it could be reasonably expected that the product would be put, and the time it was put into circulation; and
• a causal relationship between the damage and defect, as based on the application of national member state laws on causation.

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.

On 28 September 2022, the Commission published proposals to reform the PLD; namely, to address the risks and challenges posed by the digital age, modern supply chains and the circular economy. The EU’s draft legislative proposal contains significant changes to the existing regime (as described throughout 2. Product Liability), which are likely to make it easier for EU claimants to pursue product liability claims, particularly in respect of cases involving new technologies. Please refer to 3.1 Trends in Product Liability and Product Safety Policy for further detail.

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):

• the “habitual residence” of the person bringing the claim and/or the person against whom the claim is brought;
• the location where the product was acquired; and
• the location where the damage was sustained.

Contractual Claims

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 (the “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) (the “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 defendant did not manufacture of distribute the product.
• The defect which caused the damage did not exist at the time the product was put into circulation.
• At the time the product was put into circulation, the state of scientific and technical knowledge was not such that it would enable the defect to be discovered (the “state of the art” defence).
• The defect is due to compliance with a mandatory regulatory requirement. In order to benefit from this defence, the defect must be caused by compliance with a specific regulatory requirement rather than mere compliance with all regulatory compliance obligations relating to that product. Compliance with relevant regulatory obligations does, however, remain a useful factor for defending a product liability claim.
• For any potential liability of a component manufacturer, the defect of the product is attributable to the design or instructions of the product in which the component has been fitted.

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. Third-party litigation funding is permitted and available in some member states although to date, it has not been subject to any EU-wide regulation framework. The European Parliament’s Legal Affairs Committee has put forward a proposal for a Directive on regulation of third-party litigation funding, titled the “Responsible private funding of litigation”. The resolution proposing the Directive was approved by the European Parliament on 13 September 2022.

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 June 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 the internet of things (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 by virtue of the proposed GPSR seek to regulate the conduct of online marketplaces and lay down specific obligations for companies operating the same. Online content will also be regulated through the Digital Services Act, which came into force on 16 November 2022 and will apply from 1 January 2024. The DSA aims to combat the risks posed by online content, reduce harm and protect users’ fundamental rights.

The Digital Markets Act, which came into force on 1 November 2022 and applied from 2 May 2023, aims to regulate unfair practices amongst online platforms by levelling the playing field for digital companies.

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.

Cybersecurity

Whilst cybersecurity regulation is not a new concept, with cybersecurity requirements having been accounted for in sector-specific regulation such as the EU Medical Devices Regulation, the EU has introduced a series of laws and initiatives in order to strengthen the framework governing cybersecurity risks, including those arising from connected products. The EU Cybersecurity Act which came into force in 2019 establishes an EU-wide cybersecurity certification for ICT products and services. The more recent NIS 2 Directive (EU) 2022/2555 which replaces the NIS Directive, aims to harmonise cybersecurity requirements and implement cybersecurity measures in member states. The EC has also proposed the EU Cyber Resilience Act, which aims to protect consumers and businesses from products with inadequate security features by introducing mandatory cybersecurity requirements for digital products.

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, and due to apply from June 2023, 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 Sustainability

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. Following proposed amendments to the proposal, on 25 April 2023, the European Parliament’s Legal Affairs Committee voted in favour of adopting the amended text which is due to go to a plenary vote in June 2023.

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 major concerns for some time.

Artificial Intelligence

On 21 April 2021, the EC published its proposal for a regulation laying down harmonised rules on AI with the first ever legal framework on AI to address the risks and trustworthiness of AI, known as the AI Act. The AI Act adopts a risk-based approach to the regulation of AI, with the most stringent requirements and obligations imposed on those providing AI systems that are considered “high risk”, such as AI-enabled medical devices. Certain “black-list” AI technologies, which are at risk of causing individuals physical or psychological harm, are completed prohibited. On 11 May 2023, the European Parliament voted to adopt the AI Act, leading the way for a plenary vote in June 2023.

The proposed AI Act is now complemented by a proposal for a civil liability regime for AI, titled the AI Liability Directive, which will enable individuals that have been harmed by AI or AI-enabled systems to sue the AI provider.

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 the 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 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. The EC’s adoption of the proposal is awaited. 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.

EU sustainability initiatives have developed further momentum in 2023. On 1 February 2023, the EC published its Green Deal Industrial Plan, which aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for net-zero technologies and products to meet the EU’s climate targets.

On 22 March 2023, the EC published proposals for a Green Claims Directive to tackle “greenwashing” and unsubstantiated environmental claims. On the same date, it published its proposal for a Directive on common rules promoting the repair of goods.

Food Technological Practices

In 2022, the EC opened two public consultations to address the EU’s goals outlined under the European Green Deal and the “farm to fork” strategy.

The proposal for a legislative framework for sustainable food systems (FSFS), one of the flagship initiatives of the farm to fork strategy, aims to accelerate, and make the transition to sustainable food easier. It will be adopted by the EC by the end of 2023.

The food waste initiative aims to propose legally binding targets by the end of 2023 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.

Chemicals

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. The European Chemicals Agency opened a six-month public consultation on 22 March 2023 on the proposed PFAS restriction. 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.

• Changes in life science industry practices, and resultant liability profiles of life sciences companies, including for example:
1. an increased use of emerging technologies such as genomics, telehealth and AI in the drug discovery process;
2. a greater reliance upon data-driven technologies and related products, which may lead to a potentially more complex product liability matrix where liability may fall on multiple defendants; and
3. a heightened risk of cybersecurity cases involving potential data breaches of software such as COVID Test and Trace.
• An increase in member state-manufactured products and technologies, which may give rise to liability exposure in unanticipated circumstances and may result in more actions being brought domestically.
• An emerging trend towards more online marketplaces, and consumer purchases of non-compliant products or products not intended for their markets.
• A proliferation of guidance, exemptions and derogations provided by regulators, in particular life sciences regulators, in an unprecedented manner and in an uncharacteristically non-uniform manner across Europe, including:
1. provision of guidance, including in respect of ventilator systems, virus and antibody detection kits, PPE and good manufacturing processes (GMP), to facilitate short-term supply; and
2. granting of exemptions, derogations and expedited pathways, including in respect of testing kits, medical devices, remote audits, COVID-19 vaccines, compassionate use medicines, labelling and packaging flexibilities for vaccines and supply and distribution methods for vaccines.
• Consideration of new or existing compensation schemes for victims of COVID-19 products. For example Italy, which like other EU member states, produced a series of regulations during the COVID-19 pandemic, including those relating to compulsory vaccination. As a result of the regulations relating to compulsory vaccination, Law No 210 of 1992 became applicable providing a mechanism by which individuals who suffered psycho-physical damage due to the anti-SARS-CoV-2 vaccination could be indemnified by the state.