Implementation of the EU Product Liability Directive

With the ministerial draft (German version available here) for the revision of Germany’s Product Liability Act released recently, the number of key jurisdictions who are on track to implement the EU Product Liability Directive (“PLD”) is on the rise. The German draft aims at a one-to-one transposition of the PLD and is thus unlikely to garner broad objections from stakeholders, although the transposition necessitates a complete overhaul of the current German Product Liability Act (see our full analysis of the PLD here).

Of particular note is the ministry’s proposal for a chapter on “evidentiary provisions” (Beweisrecht) within an act governing substantive law. Potentially, this could mean that the courts will have to apply separate standards depending on whether a claim is based on the Product Liability Act or on producer liability under general tort law (which, notably, is also subject to a different statute of limitation regime).

Moreover, the proposed disclosure obligations stipulate a low threshold for disclosure requests. As the reasoning of the draft explains, the ministry considers it sufficient for the disclosure obligations to apply that a claim is conclusive and that there is a “certain probability” that the claimant has a right to damages, allowing courts relatively broad discretion in granting such disclosure requests. Interestingly, the reasoning also mentions that it might be possible in the future to rely on attorney confidentiality obligations as part of the legitimate interests of the manufacturer to be considered in the context of document requests. Generally, German procedural law does not recognise broad rights to document production and has therefore also not needed a legal concept comparable to the common law principle of legal privilege. Should the current proposal remain unchanged in this regard, it will be interesting to see whether the introduction of (albeit more limited) disclosure obligations is going to be flanked by the emergence of something comparable to legal privilege in practice.

Finally, it is worth noting that both the German draft as well as the Dutch proposal published earlier this year maintain their respective country’s current policy to uphold the development risk defence. However, whether this will lead to any relief for manufacturers can be called into question, as the practical thresholds for successfully relying on the development risk defence are high. With the increasing use of AI in product development, it remains to be seen whether manufacturers will be able to demonstrate that certain risks could not have been foreseen in the future. The value of this defence is also reduced by the fact that the PLD significantly shifts the relevant point in time to long after market introduction for relevant over the air-updates and products using AI.

As mentioned previously, the introduction of claimant-friendly assumptions through the PLD in connection with the rise of cross-border collective redress in Europe is likely going to increase interest in product liability actions and the jurisdictions that are perceived to be most claimant-friendly are set to come into particular focus in this context. To keep up to date with these developments, follow our implementation tracker for more details and updates on the implementation in selected EU member states of key relevance.