LSHC Horizons Brochure 2024 - Flipbook - Page 78
Hogan Lovells | 2024 Life Sciences and Health Care Horizons | Europe
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Digital and circular economy: EU updates common liability rules
To adapt Europe’s product liability
landscape to the digital age and the circular
economy, the European Commission
proposed new rules in September 2022
to deal with liability claims for defective
products, including life sciences and health
care products, product updates, and AI
systems:
• a revised Product Liability Directive,
building on the strict liability rules
for defective products known since
1985 while modernizing their scope to
encompass digital products, circular
economy business models and global
supply chains
• a first of its kind Artificial Intelligence
Civil Liability Directive, targeting
harmonization of the member states’
national fault-based liability rules for
AI-enabled products and services which
will be closely related to the recently
adapted European AI-Act.
In the course of the EU legislative process,
the EU Council adopted its common
position on the Product Liability
Directive proposal in June 2023 and
the EU Parliament adopted its report in
October 2023. Lastly, in the so-called
“trilogue”, the EU co-legislators reached
a political agreement on the revision of
the Product Liability Directive on 13
December 2023. The agreed final text is
not publicly available yet. It still needs to be
formally adapted by the EU Parliament and
Charles-Henri Caron
Counsel
Paris
product (circular economy) may also face
liability; and
the EU Counsel, before being published in
the EU’s Official Journal.
The EU legislative process for the Artificial
Intelligence Civil Liability Directive is
still underway but could also be concluded
shortly, possibly in Q1 2024.
Once the final texts have been adapted
at EU level, the new rules will have to
be transposed into the national liability
systems of the Member States.
To better protect consumers from damages
caused by defective products the current
common product liability rules will be
updated in many ways, including:
• the definition of product will be extended
to include digital manufacturing files and
software (excluding free-of-charge opensource software);
• the definition of damage will be extended
to included medically recognized damage
to psychological health, destruction of
data as well as non-material losses;
• the new rules shall ensure that there
is always an EU-based business, such
as a manufacturer, importer, or their
authorized representative that can be
held liable for a product that caused
damage, even if the product was not
bought in the EU;
• additional economic operators
substantially modifying and then
marketing or putting into service the
Nicole Saurin
Counsel
Munich
• the longstop for product liability claims
shall be extended to 25 years
in exceptional cases.
With the declared aim of putting consumers
on an equal footing with defendants and
to ease their burden of proof – in particular
in cases where discharging it would be
excessively difficult according to the
European legislator (as arguably in most
life sciences and health care cases)
– both Directives introduce novel
procedural mechanisms, as in particular:
• member states must ensure that their
national court’s ruling on compensation
claims have procedural mechanisms
at hand to grant consumers access to
necessary and proportionate evidence
at businesses’ disposal;
• national courts shall allow claimants to
rely on rebuttable presumptions:
– for the defectiveness of the product
or for the causal link between the
alleged defect and damage; and
– for the causal link between noncompliance with a duty of care
and damage,
when discharging their respective burden
of proof.
Benjamin Schulte
Counsel
Munich
For the European legislator, the reform
aims at reducing legal uncertainty and
fragmentation of the product liability regime
across Europe. However, the proposed
changes, including the novel procedural
mechanisms to be introduced, may well first
have an opposite effect. They could result in:
• forum shopping in Member States where
judges are known to have a more proplaintiff approach;
• more complex and burdensome disputes,
both procedurally and on the merits; and
• shifting the battlefield from defect, fault,
and causation to the application and
rebuttal of corresponding presumptions.
Businesses operating in the EU life sciences
and health care sectors should be prepared
for the entry into force of these Directives
and the respective changes they will likely
bring to the existing Member States’
national civil liability rules.
Hogan Lovells’ Product Liability Team will
continue to monitor this update of the EU’s
common liability rules, both at EU level and
regarding their implementation by Member
States’ after entry into force. Check out our
regular updates on Hogan Lovells Engage.
