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Statement on the Product Liability Directive
In European courts, the burden of proof for any claim generally rests on the party who makes the claim in question. This is a vital part of our European civil justice system. Proof of the facts necessary to establish a cause of action will typically rest on a plaintiff, whilst proof of defense will lie on the defendant. The proposal to review the Directive on liability for defective products (Product Liability Directive (PLD) includes several important reforms which will improve the product liability framework for consumers and business alike.
The American Chamber of Commerce to the European Union (AmCham EU) supports many of the changes to the PLD which we believe could improve legal clarity and the functioning of the internal market.
AmCham EU is, however, deeply concerned about the impact that a potential reversal of the burden of proof rule in the PLD would have. If implemented, this would entail a radical and unwarranted change to a fundamental principle of EU law where the interests of plaintiffs and defendants to date have been appropriately balanced.
More importantly, such a radical change when coupled with recent and pending changes to European judicial rules would be particularly harmful to the European economy, to the EU’s investment climate and to European consumers and businesses alike.
We see the unfortunate development of a US-style ‘class action’ culture being enabled in Europe. Compensation - that should flow to European consumers to whom genuine harm has been caused by businesses - is gradually channeled as profits to newly established plaintiff law firms and litigation funding companies instead.
It is important that EU law-makers focus on effective consumer redress measures, whilst eliminating the emergence of US-style abusive litigation in Europe. The reversal of the burden of proof rule in the PLD would inevitably contribute to such a negative development. It could cause businesses to opt for early settlements solely because of the cost and risk inherent to litigation, rather than proper investigations of the root cause of potentially defective products.
We urge the European Parliament and the Member States to protect the burden of proof as an important principle of EU law and to oppose the emergence of abusive litigation in Europe, which has the potential of causing great harm to European and U.S. companies alike, as well as European consumers.
For more information, please find a link to AmCham EU’s position paper here and a joint industry letter here.