Publication
Publication
In a decision rendered today, the CJEU has clarified the time limits for claims under the EU Product Liability Directive in cases relating to latent or progressive damage and upheld the 10-year expiry period, strengthening legal certainty for all stakeholders.
The decision comes on the back of an attempt by the Advocate General to argue that the 10-year expiry period in particular should be set aside as it, in her view, prevents claimants’ right of access to courts especially in cases of latent or progressive damages. The CJEU’s decision correctly rejects these considerations and upholds the balance between granting consumers a claim in case they are damaged by defective products irrespective of the manufacturer’s fault and providing legal certainty – and insurability – for manufacturers. The CJEU also explicitly acknowledges that systems of strict liability place a greater burden on manufacturers compared to traditional liability regimes and these burdens must be limited to avoid hinderance of technological development. In this context, the CJEU also draws attention to the fact that potential claimants can interrupt the 10-year limitation period by initiating proceedings, for example in the form of a declaratory motion as observed by Germany during the proceedings. Moreover, as illustrated by the extension of the 10-year expiry period for latent damages in the new Product Liability Directive which will apply from early December 2026 onwards (read more in our client alert), the current Product Liability Directive’s wording did not support the Advocate General’s interpretation.
Similarly, the CJEU did not follow the Advocate General’s suggestion that the statute of limitation ought to begin only once a damage has sufficiently “stabilised” in the situation of a progressive disease. Instead, the CJEU affirmed that the statute of limitation commences the date on which the claimant became aware, or ought to have become aware, both of the damage – which has clearly arisen in connection with the defective product, regardless of its subsequent development – the defect in the product, and the identity of the producer. As the CJEU highlights in its decision, reference to an “established” or “stabilised” medical condition not only disregards the legislative objectives of the EU Product Liability Directive but would also undermine the preservation of legal certainty by reference to an undefined and ambiguous criterion, which in the case of a progressive illness could correspond to the date of the claimant’s death. The decision is a welcome development for all stakeholders, as it confirms established criteria for determining when the statute of limitation starts, providing legal certainty for potential claimants and manufacturers alike. Had the CJEU followed the Advocate General’s opinion, this would have introduced the new, vague concept of a “stabilised” damage, which would have made it more difficult for both claimants and manufacturers to determine when a claim might become time-barred. Such lack of clarity would ultimately not have helped claimants, as they would have been well-advised to bring their claims as early as possible in the absence of clearly established criteria.
In times where national court decisions show an alarming tendency of deviating from the provisions of the Product Liability Directive in the interest of consumer protection and alleviating perceived difficulties with bringing claims, the CJEU’s decision is a welcome step towards upholding the clear provisions of the applicable law. In addition, the CJEU clearly spells out the function of the Product Liability Directive as bringing about a balance between consumer protection and legitimate manufacturer interests, including the interest in limiting strict liability to a reasonable period taking into account the increasing stringency of safety standards and the constant improvement in scientific and technical knowledge. As the CJEU concludes, such a balance requires concessions on both ends and consumer protection under the EU Product Liability Directive can therefore not be absolute. Especially with the introduction of far-reaching changes in the new Product Liability Directive, the decision is a necessary reminder that clear legislative decisions of how to balance stakeholder rights cannot be extended and distorted ad infinitum. In addition, legal certainty does not serve manufacturers alone but rather allows all involved parties to assess cases and potentially come to solutions that do not require court proceedings.