Product Liability Directive for the Digital Age

Artificial intelligence and other emerging digital technologies, such as the Internet of Things or distributed ledger technologies, have the potential to transform our societies and economies for the better.

With the advancement of such technology, EU has created a regime of strict liability for defective products applicable in all member states of European Union.

“Bitri & Bakiu” Attorneys at Law, as an institutional member of the European Law Institute (ELI), a non-profit organization which is based on the contribution, research, recommendations, and provision of practical guidance in the field of European law, wants to put forward a summary of some of the important Guiding Principles for Updating the Product Liability Directive for the Digital Age. This is an innovative paper prepared to set out concrete propositions for European Legal Development.

Products liability refers to a manufacturer or seller being held liable for placing a defective product into the hands of a consumer. Responsibility for a product defect that causes injury lies with all sellers of the product who are in the distribution chain. In general terms, the law requires that a product meet the ordinary expectations of the consumer. When a product has an unexpected defect or danger, the product cannot be said to meet the ordinary of the consumer.

However, such regulations cannot completely exclude the possibility of damage resulting from the operation of these technologies. If this happens, victims will seek compensation. They typically do so on the basis of liability regimes under private law, in particular tort law, possibly in combination with insurance.

The objective of the PLD is to ensure that an individual who has been injured or whose property has been damaged by a defective product is able to claim compensation simply by proving that a product was defective within the meaning of the PLD and that the defect caused the injury or damage complained about.

Only the strict liability of producers for defective products, which constitutes a small part of this kind of liability regimes, is harmonized at EU level by the Product Liability Directive, while all other regimes – apart from some exceptions in specific sectors or under special legislation – are regulated by the Member States themselves.

It is important to appreciate that a product liability system such as the PLD needs to strike a workable balance between the provision of a sufficiently high level of protection of individuals to ensure that any harm suffered by them is appropriately compensated, on the one hand, and the need to create an environment which encourages innovation and the utilization of digital technology, on the other.

The New Technologies Formation of the Expert Group, has concluded that the liability regimes in force in the Member States ensure at least basic protection of victims whose damage is caused by the operation of such new technologies.

At the present time, the PLD does not address the way in which recourse should be made available to the party held liable by the individual. In particular, the impact of statutory limitation periods on the possibility of seeking recourse needs to be considered to ensure that a right of recourse would not be curtailed as a result of statutory limitation period. Instead, this is a matter for national law to address.

For more information about Product Liability Directive (PLD), please find in below the innovative paper prepared by ELI in the link below: