Sidley Updates
Revised EU Product Liability Directive: The Long Read — Scope, Key Changes, and Compliance Implications for Businesses (Part 1)
The new European Union Product Liability Directive (PLD) repeals and replaces the regime that has governed product liability across the EU for over four decades. This five-part Update sets out a definitive look at its scope, key changes, and compliance implications for business. In particular:
- When does the Revised PLD apply?
- The 1985 PLD’s key provisions?
- What prompted the revision of the 1985 PLD?
- The Revised PLD at a Glance
- What is a “product”?
- What about repairs, refurbishment, and remanufacturing?
- Who may be held liable?
- Who may claim?
- What must an injured person prove?
- Can businesses contract out of liability?
- What defenses and exemptions remain?
- How long might exposure continue?
- What businesses should be considering now?
- When does the Revised PLD apply?
The revised EU Product Liability Directive (EU) 2024/2853 (Revised PLD)1 was adopted on October 23, 2024, and must be transposed into the EU Member States’ national law by December 9, 2026. It applies to products placed on the market2 or put into service3 in the EU after that date.4
Although Directive 85/374/EEC (1985 PLD)5 is repealed from December 9, 2026, it continues to govern products placed on the market or put into service in the EU before that date. Identical products of the same model may therefore fall under different regimes, which will run in parallel for years.6
Before considering what prompted the reform and the changes it introduces, it is worth recalling the framework established by the 1985 PLD nearly four decades ago.
The 1985 PLD’s key provisions
In essence, the 1985 PLD imposes liability without fault on producers for damage caused by defective products, provided the injured person proves the damage, the defect, and the causal relationship between them.7
- Liability. The 1985 PLD imposes strict (no-fault) liability on producers for damage caused by a defect in a product.
- Product. All tangible products, including those incorporated into another tangible product.8
- Producer. Manufacturers of finished products, components, and raw materials and any person who, by putting their name, trademark, or other distinguishing feature on the product, presented themself as its producer. Importers are deemed producers. Suppliers can also be treated as producers where the producer cannot not be identified, unless the supplier identifies the producer within a reasonable time.9
- Defectiveness. A product is defective when it does not provide the safety a person is entitled to expect, taking all circumstances into account, including its presentation, its reasonably expected use, and the time when it was put into circulation. A later, better product does not, by itself, make an earlier product defective.10
- Defenses. The producer can escape liability if it proves, among other grounds, that it did not put the product into circulation; the defect did not exist at the time the producer placed the product into circulation; the defect resulted from compliance with mandatory regulations; or the defect was undiscoverable given the scientific and technical knowledge at the time.11
- Damage covered. Death or personal injury, and damage to property other than the defective product itself, above a €500 threshold, where that property was ordinarily intended for, and mainly used by the injured person for, private use or consumption. National provisions on nonmaterial damage were unaffected.12 Member States could cap a producer’s total liability for death or personal injury caused by identical items with the same defect, subject to a minimum cap of €70 million.13
- Multiple parties. Where two or more persons are liable for the same damage, they are jointly and severally liable, without prejudice to national law on contribution or recourse.14
- Time limits. Three years from when the injured person knew or should have known of the damage, defect, and producer. Rights are extinguished 10 years after the producer puts the product that caused the damage into circulation unless proceedings had meanwhile been brought against the producer.15
- No contracting out. Liability to the injured person cannot be limited or excluded by contract.16
What prompted the revision of the 1985 PLD?
Since the 1985 PLD was adopted, products, and the supply chains through which they reach consumers, have become far more global and complex. The European Commission (Commission) has argued that while overall the 1985 PLD generally works well, experience gained from applying it shows that injured persons increasingly struggle to prove liability in technically or scientifically complex cases.17 Recently, the Commission says these difficulties have been magnified by the emergence of digital technologies and artificial intelligence (AI).
The Revised PLD therefore seeks to modernize — rather than replace — the core structure of EU product liability, keeping many of the existing core concepts. Importantly, liability remains no-fault, meaning that an injured person need not prove negligence but must establish damage, a defective product, and a causal link between the two, subject to certain disclosure rules and rebuttable presumptions set out in the Revised PLD. The manufacturer remains the principal defendant, and liability toward the injured person cannot be excluded or limited by contract.
The Revised PLD nonetheless introduces a variety of new elements, including how products are defined, how responsibility is shared across complex supply chains, which forms of damage may be compensated, and how evidence is disclosed and assessed in complex claims. In doing so, it reaches beyond the physical product to the wider ecosystem through which products are supplied, updated, and supported.
For businesses at every stage of that chain, the practical effect is an increased compliance burden, wider potential exposure, and a greater need to document, monitor, and evidence product safety across a product’s lifecycle. Businesses across the product chain should therefore assess their exposure and prepare today. The key features of the new regime are summarized below and examined in detail in the sections that follow.
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The Revised PLD at a Glance
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What is a “product”?
The Revised PLD defines a product as any movable item — including where it is built into, or connected with, another item — such as electricity, digital manufacturing files, raw materials, and software.18
- Software is a product, however it is delivered. This includes whether installed, cloud-based, or SaaS and covers operating systems, firmware, applications, and AI systems. Free and open-source software is generally excluded where it is developed outside a commercial activity. However, it is brought back in where (i) it is bundled into a commercially supplied product (e.g., open-source firmware in a smart TV) or (ii) it is supplied for payment or in exchange for personal data used for purposes beyond merely improving its security, compatibility, or interoperability (e.g., a free app monetizing user data for advertising). Information, as such, is not a product. This means that digital files such as e-books and mere source code of software are out of scope.19 By contrast, a digital manufacturing file, meaning a file holding the functional information needed to make a physical item by automatically controlling machinery or tools such as a drill, lathe, mill, or 3D printer, is a product. Thus, a defective design file used to 3D-print an unsafe item can give rise to liability.20
- Components and related services are products.21 Components can be tangible or intangible and include raw materials and certain digital services integrated into a product. A related service22 is a digital service needed for the product to perform one of its functions, such as traffic data for a navigation system or a voice assistant used to operate a product. Internet access will not normally qualify as a related service (unless the product cannot operate safely where connectivity is lost). Components, related services and software updates are treated as part of the product rather than as a standalone product.23
A manufacturer’s liability for components, related services and software updates depends on whether the manufacturer retains control over the product. For example, a manufacturer is now treated as retaining control beyond the point of sale for as long as it retains the ability to provide software updates or upgrades. This includes where a manufacturer has authorized a third party to provide such updates or upgrades.
What about repairs, refurbishment, and remanufacturing?
Circular-economy models, that is, repair, refurbishment, and remanufacturing, are on the rise. As a result, the Revised PLD treats reworked products as new only where the work amounts to a substantial modification. A person who substantially modifies a product outside the original manufacturer’s control and subsequently makes it available on the market or puts it into service becomes its manufacturer.
Whether a modification is substantial is determined:
- first, under any applicable EU or national product-safety rules, or
- second, where those rules set no threshold, where the modification both (i) alters the product’s performance or nature in a way not initially foreseen and (ii) changes the nature or extent of the risk.
The concept also applies to digital changes. For example, where a software update or upgrade is a substantial modification, the updated or upgraded product is treated as having been made available or put into service when the change is made.
This is important because a product first supplied before December 9, 2026, will fall within the Revised PLD if it is later subject to a substantial modification. For example, an older connected product that is materially changed through a major software update after that date may be treated as a newly supplied product for PLD purposes.
Who may be held liable?
Among the Revised PLD’s most consequential changes is the wider range of economic operators that may be held liable. Building on the existing rules for importers and suppliers, it expands the categories of EU-established businesses that may be liable where the manufacturer is established outside the EU.
- Manufacturer. Liability rests primarily with the manufacturer of the defective product — usually the entity that markets it under its own trademark. Outsourcing physical production does not avoid manufacturer status. As described above, a person who substantially modifies a product is also treated as its manufacturer.25
- EU operators for non-EU manufacturers — importers, authorized representatives, and fulfilment service providers. Where the manufacturer of the product or component is established outside the EU, the EU importer26 and the authorized representative27 may also become liable. Where there is neither an importer established in the EU nor an EU authorized representative, liability may fall on the fulfillment service provider, that is, a person who offers warehousing, packaging, addressing, and dispatching services (excluding ordinary postal, parcel-delivery, and freight services).
- Distributors and online platforms. A distributor28 may be liable where no relevant EU-established operator can be identified and the distributor fails, within one month of a request, to identify one or its own supplier. Online platforms29 can be liable where they themselves act as an economic operator, or in certain cases where they appear to the consumer to be supplying the product and fail to identify the relevant EU-established operator.30
By widening the range of potentially liable businesses, the Revised PLD may also make it easier for an injured person to identify one or more defendants. Where several businesses are liable for the same damage, each may be pursued for the full amount. If no liable business can be found, or those businesses are insolvent or no longer exist, Member States may provide compensation through a national scheme.31
Who may claim?
Any natural person harmed by a defective product can claim compensation under the Revised PLD. Where national law permits, this extends to indirect victims — those who suffer loss because of the direct victim’s harm (e.g., a dependent). A claim may also be brought by anyone who has succeeded, or been subrogated, to the injured person’s rights (e.g., an insurer) or is acting on behalf of one or more injured persons by virtue of Union or national law. This newly recognized possibility for a claimant to act “on behalf of” an injured person is an important innovation because it recognizes the possibility that collective actions may be taken by representative entities recognized under national law, for example under the EU’s Representative Actions Directive.32
What must an injured person prove?
As under the 1985 PLD, the Revised PLD imposes strict liability. An injured person need not prove negligence or any other wrongdoing by the defendant. However, they must (i) establish one of the categories of damage, (ii) prove that the product was defective, and (iii) prove that the defect caused that damage. These three conditions are subject to the standard of proof applicable under national law.33
(i) Categories
A person harmed by a product must demonstrate one of the following three categories of damages:
- Death or personal injury. This includes psychological damage that is medically recognized and certified and capable of requiring therapy or medical treatment.34
- Damage to property. Damage to property is covered, and the previous €500 minimum threshold35 is removed. Damage to the defective product itself, and to property used exclusively for professional purposes, is not covered.36
- Destruction or corruption of data. This damage category covers data not used for professional purposes — for example, files deleted from a hard drive, including reasonable recovery or restoration costs. Where data can be recovered without cost there may be no compensable loss.37
Compensation covers all material losses flowing from the categories above. An injured person may also be compensated for nonmaterial losses, such as pain and suffering, where national law allows such compensation.38
Pure economic loss. Losses arising from other categories of harm, such as privacy infringements and discrimination fall outside the Revised PLD altogether — recoverable, if at all, only under separate contractual, tortious, or statutory regimes.39
(ii) Defectiveness
A product is defective where it does not provide the expected safety — under an objective standard, not the expectations of any individual user — or the safety required under EU or national law. This is a test of safety, not of quality, commercial performance, or contractual conformity, and a product is not defective merely because a better product, update, or upgrade is, or later becomes, available.40 A court needs to weigh all relevant circumstances, including the following:
- Users, purpose, and regulatory context. Safety expectations may be especially high for products such as life-sustaining medical devices or where a product’s purpose is to prevent harm (e.g., a smoke alarm that fails to warn). Applicable safety and cybersecurity requirements, recalls, and other safety interventions must be considered, though a recall does not by itself create a presumption of defectiveness.41
- Design, presentation, and foreseeable use. Relevant factors when considering defectiveness include labelling, design, composition, technical features, packaging and instructions for assembly, installation, use, and maintenance. Warnings do not, by themselves, make an otherwise unsafe product safe, and reasonably foreseeable use includes misuse that is not unreasonable (e.g., a momentary lapse of attention or the predictable behavior of children).42
- Connected and evolving functionality. The product’s ability to keep learning or acquire new features, its interaction with other products it is expected to be used with (e.g., within a smart-home system), and the period during which it remains within the manufacturer’s control. Unexpected behavior by a learning product, and safety-relevant cybersecurity vulnerabilities, may support a finding of defectiveness.43
(iii) Proving defectiveness and causation
One of the major changes in the Revised PLD is the introduction of new disclosure requirements and rebuttable “presumptions” against the defendant. This is also an area where businesses have expressed the most concern regarding uncertainties as to how the new provisions will operate in practice.
Disclosure. An injured person who presents facts and evidence to a court sufficient to make a claim plausible may ask the court to order the defendant to disclose “relevant” evidence within its control. The right is not open-ended, and disclosure must be necessary and proportionate. Courts must weigh the legitimate interests of all parties, and confidential information falling within the scope of legal professional privilege and trade secrets44 must be protected, with specific safeguards where trade secrets are in play. Where technically complex material is disclosed, a court may require it to be presented in an accessible form. Disclosure runs both ways: A defendant who shows a need for evidence to defend the claim may obtain corresponding disclosure from the injured person.45
In practice, the interpretation of the term “relevant” will become particularly important for defendants.
Presumptions. The Revised PLD adds three mandatory new rebuttable “presumptions,” meaning that in certain circumstances, a court must presume certain elements of a claimant’s case are satisfied. These include the following:
- Defectiveness of the product is presumed where the defendant fails to comply with a disclosure order; where the product breaches a mandatory EU or national safety requirement; or where the damage was caused by an obvious malfunction in reasonably foreseeable use or ordinary circumstances (e.g., a glass bottle that explodes in normal use).46
- Causation of harm is presumed once defectiveness has been established and the damage is of a kind typically associated with the defect in question.47
- Both defectiveness and causation may be presumed where despite disclosure, the injured person would face excessive difficulty proving defectiveness or causation. The injured person need only show that the product was likely defective, that the defect likely caused the damage, or both. This development is explicitly aimed at claims involving technically or scientifically complex products, for example, an innovative medical device, machine-learning technology, a pharmaceutical, or an AI system.48
As drafted, however, the conditions for applying any of these presumptions, and the legal effect of a presumption, are highly uncertain. For example, it is unclear whether a presumption fully shifts the burden of proof onto the claimant, or, whether it merely alleviates the evidentiary standard that must be met for a claimant to satisfy their claim.
Can businesses contract out of liability?
An operator (e.g., manufacturer, importer, authorized representative) cannot exclude or limit an injured person’s rights under the Revised PLD by contract.49 Because the Revised PLD expands the range of potentially liable businesses and the circumstances in which liability may arise, contractual provisions between businesses, including indemnities, contribution, and recourse provisions, become increasingly important in allocating liability and financial risk across the supply chain.
What defenses and exemptions remain?
The Revised PLD keeps a defined set of exemptions, each of which must be proved by the operator relying on it. Depending on its role, an operator may avoid liability to a specific injured person by showing that
- an operator did not place the product on the market or put it into service, or a distributor did not make it available;
- the defect probably did not exist at the time of supply and arose only afterward;
- the defect was caused by compliance with legal requirements;the objective state of scientific and technical knowledge at the relevant time was not such that the defect could be discovered;
- for a component manufacturer, the finished product’s defect was due to that product’s design or to the finished-product manufacturer’s instructions; or
- for a substantial modifier, the defect related to a part of the product unaffected by the modification.
Two of these defenses carry important qualifications. The first — that the defect arose after supply — falls away where the product stays within the manufacturer’s control, for example where the defect lies in a related service, software, an update, or an upgrade (or a missing safety update). The Revised PLD’s preamble gives the example of a smart TV sold as including a video app that the user later downloads from a third party: The TV manufacturer can remain liable, alongside the app maker, for a defect in that app. The same logic applies to cybersecurity vulnerabilities, except where the cause is beyond the manufacturer’s control — for example, where the owner fails to install a safety update that was provided. The Revised PLD does not itself impose a standalone duty to supply updates or upgrades.50
The second is the development-risk defense, which turns on the most advanced objective scientific and technical knowledge accessible at the relevant time — not on what the defendant actually knew. Reflecting that this allocation may not be appropriate in every sector, the Revised PLD allows Member States to keep or introduce rules that exclude the defense for specific categories of product, where justified in the public interest and proportionate, so its availability may differ from one Member State to the next.51
Separately, an economic operator’s liability may be reduced or disallowed where the damage was caused both by the product’s defectiveness and by the fault of the injured person or of a person for whom the injured person is responsible.52
How long may exposure continue?
The Revised PLD now sets two main time limits, with an extended long-stop for latent injury.
- Three-year limitation period. As under the previous PLD, proceedings must generally be brought within three years of the date on which the injured person knew, or should reasonably have known, of the damage, the defectiveness, and the identity of the potentially liable operator. National law governs suspension and interruption.53
- Ten-year expiration period, with a new rule for substantially modified products. The right to compensation generally expires 10 years after the product was placed on the market or put into service. Where a product is substantially modified, however, a new 10-year period runs from when the modified product is subsequently made available or put into service.54
- New 25-year long-stop for latent injury. The Revised PLD extends the expiration period to 25 years where the latency of a personal injury prevented proceedings from being brought within the usual 10-year period.55
What businesses should be considering now?
Whatever guidance or clarifications may emerge, the December 9, 2026, transposition deadline remains unchanged. Priorities to consider:
- Determine who holds responsibility for each product line. Establish the capacity of the business as manufacturer, component or software manufacturer, importer, authorized representative, fulfillment service provider, distributor, or online platform — and, for non-EU manufacturers, confirm there is a reachable EU-established operator.
- Reassess software portfolio. Check whether postsupply updates, upgrades, or continued machine learning could amount to a substantial modification and cause the modified product to be treated as a new product.
- Revisit contracts. Review indemnities, recourse, and the allocation of responsibilities across the supply chain, and reassess insurance cover, to reflect the wider pool of potentially liable operators.
- Review document retention policy. Consider whether potentially relevant product records should be retained in light of the new disclosure rules and the 10-year expiration period and the 25-year long-stop for latent injury.
- Track national implementation. Given the concerns that business groups have already raised about legal uncertainty, monitor how each Member State transposes the regime.
Sidley’s Global Product Liability and Mass Tort, and EU law team continue to monitor closely the PLD and address these issues as further guidance and best practices emerge. We are available to assist businesses in anticipating and managing PLD-related challenges and related compliance issues. The next part in the series examines how the Revised PLD applies to innovative and technically complex products.
This Sidley Update is current as of the date stated above. Sidley Austin LLP assumes no duty to update it or address subsequent developments that may have a bearing on its contents.
1Directive (EU) 2024/2853 of the European Parliament and of the Council of October 23, 2024, on liability for defective products and repealing Council Directive 85/374/EEC, OJ L, 18.11.2024 (the Revised PLD).
2Article 4(8) of the Revised PLD (“placing on the market”: the first making available of a product on the Union market).
3Article 4(9) of the Revised PLD (“putting into service”: the first use of a product in the Union in the course of a commercial activity, whether in return for payment or free of charge, in circumstances in which that product has not been placed on the market prior to its first use).
4Articles 2(1), 22(1) of the Revised PLD.
5Directive 85/374/EEC of July 25, 1985, on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products, OJ L 210, 7.8.1985, p. 29, as amended by Directive 1999/34/EC of the European Parliament and of the Council of May 10, 1999, OJ L 141, 4.6.1999, p. 20 (the 1985 PLD).
6Article 21; Recital 63 of the Revised PLD.
7Articles 1 and 4 of the 1985 PLD.
8Article 2 of the 1985 PLD.
9Article 3 of the 1985 PLD.
10Article 6 of the 1985 PLD.
11Article 7 of the 1985 PLD.
12Article 9 of the 1985 PLD.
13Article 16 of the 1985 PLD.
14Article 5 of the 1985 PLD.
15Articles 10 and 11 of the 1985 PLD.
16Article 12 of the 1985 PLD.
17Recital 3 of the Revised PLD.
18Article 4(1) of the Revised PLD.
19Recital 13 of the Revised PLD.
20Article 4(1) – (2); Recital 16 of the Revised PLD.
21Article 4(4) of the Revised PLD.
22Article 4(3) of the Revised PLD.
23Article 4(3) – (4); Recital 17 of the Revised PLD.
24Article 4(5); Recital 18 of the Revised PLD.
25Articles 4(10), 8(1)(a) and 8(2); Recitals 36 and 39 of the Revised PLD.
26Article 4(12) of the Revised PLD, (“importer”: any natural or legal person who places a product from a third country on the Union market).
27Article 4(11) of the Revised PLD, (“authorised representative”: any natural or legal person established within the Union who has received a written mandate from a manufacturer to act on that manufacturer’s behalf in relation to specified tasks).
28Article 4(14) of the Revised PLD, (“distributor”: any natural or legal person in the supply chain who makes a product available on the market, other than the manufacturer or importer of that product).
29Article 4(16) of the Revised PLD, (“online platform”: online platform as defined in Article 3, point (i), of Regulation (EU) 2022/2065).
30Article 8(3) – (4); Recitals 37 and 38 of the Revised PLD; and Article 6(3) of Regulation (EU) 2022/2065.
31Article 8(5); Recital 41 of the Revised PLD.
32Directive (EU) 2020/1828 of the European Parliament and of the Council of November 25, 2020, on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC, OJ L 409, 4.12.2020, p. 1.
33Article 10(1); Recital 42 of the Revised PLD.
34Article 6(1)(a); Recital 21 of the Revised PLD.
35Under Article 9, first paragraph, point (b) of the 1985 PLD, claims for property damage were subject to a lower threshold of ECU 500. The Revised PLD does not retain it.
36Article 6(1)(b); Recitals 22 and 25 of the Revised PLD.
37Article 6(1)(c); Recitals 20 and 22 of the Revised PLD.
38Article 6(2) – (3); Recital 23 of the Revised PLD.
39Article 6(2) – (3); Recital 24 of the Revised PLD.
40Article 7(1) – (3); Recitals 30 and 35 of the Revised PLD.
41Article 7(2)(f) – (i); Recitals 30, 33 and 34 of the Revised PLD.
42Article 7(2)(a) – (b); Recital 31 of the Revised PLD.
43Article 7(2)(c) – (f); Recital 32 of the Revised PLD.
44Article 4(17) of the Revised PLD, (“trade secret”: trade secret as defined in Article 2, point (1), of Directive (EU) 2016/943).
45Article 9; Recitals 42 – 45 of the Revised PLD.
46Article 10(2); Recital 46 of the Revised PLD.
47Article 10(3); Recital 47 of the Revised PLD.
48Article 10(4); Recital 48 of the Revised PLD.
49Article 15; Recital 56 of the Revised PLD.
50Article 11(2); Recitals 50 and 51 of the Revised PLD.
51Articles 11(1)(e) and 18; Recitals 52 and 59 of the Revised PLD.
52Article 13; Recital 55 of the Revised PLD.
53Article 16 of the Revised PLD.
54Article 17(1); Recital 57 of the Revised PLD.
55Article 17(2); Recital 57 of the Revised PLD.
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