New features in product liability framework

EU member states must adopt the new rules on product liability by the end of 2026 at the latest. The deadline for transposing the new EU Product Liability Directive is, therefore, still some way off. Nonetheless, it is advisable to familiarise oneself with the newly introduced provisions, as they may entail significant changes to civil liability insurance policies. In this special CAPSULAS, we highlight the key aspects we consider most relevant for companies operating in the pharmaceutical and health sciences sector.

Non-absolute strict liability regime

The system will remain based on a regime of non-absolute strict liability. Liability is deemed strict because the injured party is not required to prove fault or negligence on the part of the producer or distributor. However, it is not absolute, as the obligation to compensate arises only if the product alleged to have caused the damage is deemed “defective”.

A clearer defective product concept

The new directive maintains the concept that a product is defective if it does not offer the safety that can legitimately be expected of it. However, with its new wording it aims to dispel some interpretative doubts.

Firstly, the new directive clarifies that “A product shall be considered defective when it does not provide the safety that a person is entitled to expect or that is required under Union or national law“. This clarifies that the safety that can be expected from a product is that required by EU or national law, disassociating the concept of defect from any subjective assessment that a particular person makes of the safety of the product.

This is particularly significant in the field of medicinal products, where the rigorous and exhaustive regulations governing them at European and national level stipulate that:

(i) the safety of a medicinal product is a relative concept that can only be assessed in relation to its efficacy and the benefit it provides; and

(ii) medicinal products are considered safe if, under normal conditions of use, they do not produce toxic or undesirable effects disproportionate to the benefit they provide (ex. Article 10 of Royal Legislative Decree 1/2015).

This clarification serves to provide greater legal certainty in the analysis of the defectiveness of medicinal products. A medicinal product may not be classified as defective if, under normal conditions of use, it has not produced a toxic or undesirable effect disproportionate to the benefit it provides.

Secondly, the safety that an individual is entitled to expect from a product must be assessed by considering all relevant circumstances surrounding the product and its placing on the market. This requirement was already included in the previous regulation; however, the new directive extends the list of circumstances that may be considered when conducting this assessment to include the following:

(i) The presentation and characteristics of the product, including its labelling, design, technical features, composition and packaging, and instructions for its assembly, installation, use and maintenance. These have been very relevant circumstances in the field of medicinal products and medical devices.

(ii) The reasonably foreseeable use of the product.

(iii) The effect on the product of any ability to continue to learn or acquire new features after it is placed on the market or put into service.

(iv) The reasonably foreseeable effect that may be caused by other products that are expected to be used with the product (also by interconnection). This was one of the criteria used by the High Court of Justice of the Canary Islands in its judgment of 14 December 2023 to determine that the damage caused to a patient during a cataract operation was not caused by an alleged defect in the FACO equipment used during the operation but by an incorrect use of the equipment.

(v) The moment in time in which the product was placed on the market. This is the relevant point in time for determining whether a product offers the safety to be expected (see the CJEU judgment of 21 June 2017, Sanofi Pasteur MSD, C-621/15 or the Supreme Court judgment of 1 March 2021).

(vi) Relevant product safety requirements (including cybersecurity requirements). In the case of medicinal products, this has been a highly valued element by the courts when analysing their adequate safety (for example in the judgments of the Supreme Court of 28 May 2012, 6 June 2012 or 18 June 2013, in relation to Agreal®; the judgments of the Provincial Court of Madrid of 10 February 2009 and 4 May 2011, in relation to the Viox® case; the Judgment of the National Audience of 10 July 2019 in the Gardasil® and Cervarix® cases; Judgment of the Audiencia Provincial de Madrid of 24 November 2011 in relation to Zyprexa® or the Judgment of the Provincial Court of Madrid of 4 May 2011 in relation to Nolotil).®

(vii) The recall of the product and other interventions made by a regulatory authority or an economic operator responsible for the product in relation to its safety. These circumstances have also been taken into account by the courts when analysing cases on medicinal products and medical devices (see the judgments of the Provincial Court of Madrid of 10 February 2009 and 4 May 2011, in relation to the Viox® case or the judgments of the Supreme Court of 9 December 2010, on Trilucentis breast prostheses®, and of 1 March 2021, in relation to ASR hip prostheses; the Judgment of the Provincial Court of Madrid of 30 December 2013 in relation to certain batches of Levothorid® or the recent Judgment of the Provincial Court of Barcelona of 9 May 2024 in relation to certain batches of Novaplus IUD®). However, these interventions, as stated in the explanatory memorandum of the new directive, should not in themselves create a presumption of the defective nature of the product.

(viii) The specific needs of the group of users for whom the product is intended. This circumstance was introduced by the CJEU in its judgment of 5 March 2015, Boston Scientific Medizintechnik, C-503/13 and C-504/13, when addressing the circumstances that may serve to specify the legitimate expectations of the general public.

(ix) In the case of a product whose very purpose is precisely to prevent damage (as stated in the explanatory part of the directive, e.g. a warning mechanism such as a smoke detector), the possible non-fulfilment of this purpose by the product.

Finally, like the previous regulation, the new directive establishes that in no case will a product be considered defective because a better product or an improved or updated version of it is subsequently placed on the market

With regard to this last element, it should be recalled that, in the field of medicinal products, the information provided in the summary of product characteristics and the package leaflet is regularly updated on the basis of the latest available data. Thus, a medicinal product that at the time it is marketed is not considered defective will not cease to offer the “safety that can legitimately be expected” simply because its summary of product characteristics and package leaflet are updated at a later date, including, for example, new warnings, risks or adverse effects (see the judgment of the Barcelona Provincial Court of 18 April 2008 in relation to Agreal® or the judgment of the Madrid Provincial Court in its judgment of 24 November 2011, in relation to Zyprexa®).

New liable economic operators

The directive extends the list of liable parties. In the case of products whose manufacturer is established outside the EU, the importer and also the manufacturer’s authorised representative will be liable.

The distributor of the product (and the provider of an online platform allowing consumers to conclude distance contracts with traders) may also be liable if, after receiving a request from a consumer, the distributor fails to identify, within one month, the economic operator established in the European Union who should be liable.

Where two or more economic operators are liable for the same damage, the injured party may claim compensation from any one of them. The operator who is jointly and severally liable for compensation shall be entitled to recourse against the other liable economic operators.

Measures in relation to evidence

The burden of proving the defectiveness of the product, the damage suffered and the causal link between the defect and the damage shall remain on the claimant.

However, in order to facilitate the claimant’s evidentiary task in complex cases, the new directive establishes the following measures that represent relevant developments in this area:

a) Disclosure of evidence by the parties

A claimant who submits sufficient facts and evidence on the plausibility of the claim may request the courts to order the defendant to produce relevant evidence at his disposal which the claimant considers necessary to support the claim. The defendant may also make such a request in relation to evidence in the possession of the claimant, where the defendant submits sufficient facts and evidence on the necessity of access to this evidence in order to be able to oppose the claim.

Courts shall ensure that such discovery between the parties is limited to necessary and proportionate matters, taking into account the legitimate interests of all persons concerned, and in particular the protection of confidential information and business secrets.

This measure marks a significant innovation in the Spanish procedural system, which is based on the principle that each party must provide the evidence it holds. Only in exceptional circumstances is it permissible for one party to request the disclosure of documents held by the other party.

b) Burden of proof

The product shall be presumed to be defective if the defendant refuses to disclose the evidence requested by the court.

Defect shall also be presumed where the claimant proves that:

(i) the product does not comply with the mandatory safety requirements laid down in the applicable regulations; or

(ii) the damage was caused by an obvious malfunction of the product during use under ordinary circumstances.

In addition, a causal link between the defectiveness of the product and the damage shall be presumed where it has been established that the product is defective and that the damage caused is of a kind typically consistent with the defect in question.

Finally, the court may also presume product defectiveness or causal link, or both, where, considering all the relevant circumstances of the case:

(i) the claimant faces excessive difficulty, due to technical or scientific complexity, in proving the product defect or the causal link, or both; or

(ii) the claimant demonstrates that it is likely that the product is defective or that there is a causal link between the defectiveness of the product and the damage, or both.

In any such case, the defendant shall have the right to rebut these presumptions by presenting counterevidence.

Limitation and expiry periods

The limitation period for bringing product liability actions will continue to be 3 years. As a novelty, the new directive establishes some modifications regarding the rules for its computation: the limitation period will start to run from the day on which the injured party becomes aware (or should reasonably have become aware) both of the damage and of the defective nature of the product, as well as of the identity of the economic operator who may be held liable. This limitation period may be interrupted in accordance with the applicable rules of national law.

On the other hand, the 10-year expiration period remains in force. Once this period has elapsed since the product was placed on the market, claims for damages cannot be brought. However, this period is extended to 25 years for claims for damages that become apparent after these 10 years have elapsed due to the latency of the injury caused.

Global liability and limits or exclusion of liability

Another important novelty is that the new directive removes the possibility for Member States to set an overall monetary limit of liability per product of the same kind with the same type of defect. Member States will also have to ensure that the liability of economic operators under the new directive cannot be excluded or limited, vis-à-vis the injured party, by a contractual provision or by national law.

Temporal application and level of harmonisation

The rules that Member States must adopt to comply with the new directive will apply to products placed on the market or put into service on or after 9 December 2026.

Member States may not maintain or introduce, in their national law, more or less stringent than those laid down in the new directive in order to achieve a different level of protection of injured parties, unless they are expressly authorised to do so by the new directive.