European Union introduces additional safeguards for consumers affected by defective products
A new directive on liability for defective products has been adopted, further strengthening consumer protection within the EU. Below, we outline the key changes introduced by the directive.
One of the main reasons for the adoption of Directive (EU) 2024/2853 of the European Parliament and of the Council of 23 October 2024 on liability for defective products and repealing Council Directive 85/374/EEC (the “Directive”) was the need to adapt liability rules to the rapidly changing market environment, technological advancements, and the complexity of modern supply chains. Since the adoption of its predecessor in 1985, the production, supply, and sale of products on the market have undergone significant changes, necessitating the revision of the civil liability legal framework.
Key changes introduced by the Directive:
1) Expanded definition of a “product”
The definition of a “product” in the previous directive covered only physical products, whereas the Directive expands the scope of liability to include intangible products such as software and artificial intelligence systems. This includes all types of software and artificial intelligence systems but does not cover free and open-source software (such as Mozilla Firefox, Linux, and Python) developed or made available for use outside of commercial activity.
2) Expanded understanding of a “defect” in a product
Similar to the previous directive, the concept of a “defect” refers to a product’s failure to meet the safety expectations that a person is entitled to expect or that are required by EU or national law. However, the Directive introduces an important new aspect, as it takes into account the effect that a product’s ability to continue learning (optimising performance based on collected data) or acquiring new functionalities (software updates) has on its safety, even after the product has already been placed on the market or put into use.
3) Expansion of liability to all parties in the supply chain
The previous directive already established that both the manufacturers of the product and the manufacturers of individual components are liable for damage. However, the Directive clarifies this liability and extends it to digital components. Where damage is caused by a product manufactured outside the EU, liability can also extend to the importer, authorised representative, and provider of dispatch warehouses. If none of these parties can be held liable, liability may shift to distributors and online marketplace providers (platforms) if they fail to identify the responsible party within one month.
4) Shifting the burden of proof to the economic operator
As a general rule, the burden of proof regarding the prerequisites for liability (defect, damage, and causal link between the two) lies with the claimant (injured party). However, the Directive, due to the information asymmetry in certain cases, shifts the burden of proof to the defendant and introduces a set of rebuttable presumptions. These apply, for example, if: (i) the defendant refuses to disclose relevant evidence; (ii) the product does not meet mandatory safety requirements; or (iii) the damage is a result of a clear defect in the product.
In addition, a causal link between the defect and the damage is presumed if the type of damage (e.g., personal injury or property damage) is directly related to the type of defect in the product. This means that it is not necessary to specifically prove that the defect (e.g. overheating of a smartphone due to a software error) caused the damage (e.g. burns on the hand), thus simplifying the burden of proof for the injured party.
The Directive also further eases the position of the injured party in cases where proving the claim is disproportionately difficult due to technical or scientific complexity. In such cases, it is sufficient for the claimant to prove only the likelihood of a defect or causal link.
5) New exception regarding limitation periods
A new exception allows for the extension of the limitation period to a total of 25 years in cases where the injured party, due to the delayed onset of bodily injury—i.e., when the symptoms or consequences of the injury become apparent only after a longer period—was unable to initiate proceedings within the first ten years.
6) Additional types of legally recognised damage
The Directive removes any doubt that compensation for bodily injury can now also include compensation for medically recognised damage to mental health. The recognised types of damage also include the destruction or damage to data, but only if the data is not used for professional purposes. The Directive also eliminates the previous deductible threshold (the injured party’s contribution) of 500 EUR for claims related to damage to other property. It further removes limitations on the maximum amount of liability, which was optional and had not been implemented in the Slovenian Consumer Protection Act (ZVPot-1).
The Directive entered into force on 8 December 2024, and member states must make it law by 9 December 2026. This means that the provisions of the Directive will apply to products placed on the market after this date (9 December 2026). As the legislator has already begun preparing an amendment to ZVPot-1 to implement (other) European directives, the implementation of this Directive can also be expected.
However, it is important to note that some of the changes mentioned, such as liability for digital content, are already included in the ZVPot-1. As a result, liability for damage arising from these issues, affecting Slovenian consumers, can already be established under existing legislation, without waiting for the Directive’s implementation. We will closely monitor how and when the legislator incorporates the remaining changes into the ZVPot-1 and we will keep you informed accordingly.
