New EU Product Liability Directive Enters Into Force Covering Software and AI

What the new rules cover

The Directive allows victims to seek compensation for personal injury, property damage and damage to data. According to the Commission's guidance, all software is covered, including applications, operating systems and AI systems, and liability can extend to defects arising after a product is placed on the market through updates, upgrades or machine learning. Personal injury includes harm to psychological health.

Who can be liable

The manufacturer remains primarily liable. To reflect the number of products made outside the EU, the rules ensure there is always an economic operator in the Union against whom a claim can be made: an importer, an authorised representative or a fulfilment service provider. This also applies to products sold through online platforms, which can be liable in certain circumstances. A business that substantially modifies a product is treated as its manufacturer.

Proof and time limits

The rules ease the burden of proof for claimants who face excessive difficulties, for example because of scientific or technical complexity, and allow both claimants and defendants to request disclosure of relevant evidence where proportionate. Operators remain liable for 10 years after a product is placed on the market, extended to 25 years in certain cases of latent personal injury, and claimants have three years to bring a claim. The Commission will also set up a publicly accessible database of court judgments on product liability.

What happens next

Member States have until 9 December 2026 to transpose the Directive. The new rules will apply to products placed on the market from that date, while the 1985 Directive continues to apply to earlier products. Manufacturers, importers, software developers and online marketplaces selling into the EU may wish to review product safety documentation, update policies and insurance cover ahead of the new regime.

Sources

• European Commission: Daily News 06/12/2024, New liability rules for defective products
• European Commission: Liability for defective products