05.12.2024

General product safety and liability for defects. A new legislative framework

Technological developments over the last decades, including artificial intelligence, changing business models have called for an adaptation of the legislation on general product safety and product liability for defective products. The EU Regulation 988/2023 on General Product Safety will become applicable in a few days, i.e. on December 13, 2024 ("GSP Regulation"). On December 13, the old Directive 2001/95/EC[1] governing product safetywill be repealed. Products which are in conformity with Directive 2001/95/EC and which have been placed on the market before December 13, 2024 are not covered by the GSP Regulation.

The GHS Regulation maintains the general obligation for manufacturers to ensure that products placed on the market have been designed and manufactured in conformity with the general safety requirements set out in that act. A novelty introduced by the GHS Regulation is the obligation for manufacturers to carry out an internal risk analysis and to draw up technical documentation containing at least a general description of the product and its essential characteristics relevant for the assessment of its safety. This technical documentation is subject to the requirement to be kept up to date, must be kept for 10 years from the date of placing the product on the market and must be made available to the authorities on request.

In addition, any product covered by the GSP Regulation can only be placed on the market if there is an economic operator established in the EU who fulfills the responsibilities under that Regulation.

When a product is found to be unsafe, the GSP Regulation regulates the safety recall notice and the remedies that can be offered to the consumer by the responsible economic operator, i.e. the repair of the product, the replacement of the product with a safe product of the same type and at least the same value and quality or an adequate refund of the value of the recalled product, provided that the value of the refund is at least equal to the price paid by the consumer.

For the same reasons that led to the adoption of the GSP Regulation, EU Directive No. 2024/2853 on product liability for defective products and repealing Directive No. 85/374[2] ("the RPD Directive") was published on November 18, 2024. This Directive is to apply to products placed on the market or put into service after December 9, 2026. By December 9, 2026, Member States must bring into force the laws, regulations and administrative provisions transposing this Directive.

The RoHS Directive will apply to any product understood as any movable asset, even if integrated into or interconnected with another movable or immovable asset, and will also include digital production files as well as software. As far as free and open source software is concerned, the DPR Directive does not apply as long as it is developed or provided outside a commercial activity or if personal data are not used solely to improve the security, compatibility or interoperability of the software program. Thus, if personal data are also collected for purposes other than those listed, then those personal data have commercial value and the DPD will become applicable. Digital production files are those that contain functional information necessary to produce a bodily item by activating automatic machine control, for example those used in 3D printers.

Liability for defective products is strict liability, in the sense that no fault has to be proved. The liability lies with the manufacturer of the product, the manufacturer of a defective component, and if the product or component is produced outside the EU, then the liability of the importer or the authorized representative of the manufacturer may also be engaged. If there is neither an importer nor an authorized representative, then the logistics service provider can be held liable.

In order to attract liability, the claimant is obliged to prove the existence of the defect, the damage caused and the causal link between the defect and the damage.

Existence of the defect. A product is considered defective if it does not provide the safety which a person has a right to expect or which is provided for in EU or national law. The assessment is an objective one, i.e. of the safety that the general public can expect and not the subjective safety that a particular person is entitled to expect. Among the factors considered are the intended purpose or reasonably foreseeable foreseeable use. In relation to this factor we would like to clarify that reasonably foreseeable foreseeable use, as follows from recital 31 of the DPD, also includes misuse that is not unreasonable in certain circumstances, for example, foreseeable behavior of certain groups such as children.

In certain situations, the existence of the defect may be presumed by the court. For example, if the product does not comply with the requirements of the GSP Regulation then it is presumed to be defective.

Damages. The right to compensation under the GDPR Directive only applies to (i) death or personal injury, including medically recognized psychological harm; (ii) damage to or destruction of any property with certain exceptions and we emphasize the exception of property used exclusively for business purposes and (iii) destruction or corruption of data not used for business purposes.

Causation. The DPD establishes a presumption of causation if it is established that the product is defective and the proven damage is such that it can be commonly linked to the defect.

Duty to disclose evidence. The plaintiff as well as the defendant in a dispute over a product claimed to be defective will be able to ask the court to compel the other party to disclose relevant evidence at its disposal. A defendant who fails to comply with a court order to disclose evidence exposes himself to the possibility that the court may presume that the product is defective.

Grounds excluding liability. We mentioned above that this liability is strict liability, but that does not mean that there are no grounds for excluding liability. One of the defenses[3] consists in proving that the date on which the product was placed on the market, the objective state of technical and scientific knowledge does not allow the defectiveness to be detected. The merits of these defenses are determined not on the basis of the knowledge of the defendant manufacturer, but on the basis of the most advanced level of objective knowledge available capable of leading to the conclusion that the defect was not detectable. This defense suffers because it may be affected byhindsight bias, i.e. the tendency to believe that one could have accurately predicted a particular event after the outcome of that event is known.

Deadlines. The DPL Directive establishes a 3-year limitation period for the right to claim damages. This period starts to run when the injured person has knowledge of all the following elements: the damage, the defective nature and the identity of the liable operator. The DPL Directive also establishes a limitation period in the sense that the injured person is no longer entitled to compensation 10 years after the defective product has been placed on the market or put into service, unless he has brought the claim within the 10-year period.

In conclusion, with this new legislative framework, the European Union is seeking to balance the imperative of consumer safety in the face of technological innovation, on the one hand, and the need for the internal market to function, on the other.

[1] Directive 2001/95 was transposed by Romania by Law No 245 of 2004 on general product safety;

[2] Directive No 85/374 was transposed by Romania by Law No 240 of 2004 on producers' liability for defective products;

[3] This defense is known as the "evolutionary risk defense"