Product liability - market insights Q3/Q4 2024

EU Product Liability Directive

The EU’s new Product Liability Directive (PLD) was approved by the European Council on 10 October 2024. It will come into force 20 days after its publication in the Official Journal of the European Union. Once in force, Member States will have two years to implement the new PLD into their national laws.  

UK Consumer Protection Act 1987

In a similar vein to the EU, the UK Law Commission has raised questions as to whether the Consumer Protection Act 1987 (CPA), the implementing legislation which transposed the existing PLD into UK law, meets the challenges of emerging technologies. With the government seeking to prioritise reform of the mainstay product safety regulatory framework, as demonstrated by the inclusion of a new Product Safety and Metrology Bill in the King’s Speech, it is possible that reform of the CPA may be revisited, as indicated in recent government consultations. 

The AI Liability Directive

The EU’s AI Liability Directive (AILD), which proposes a fault-based liability regime for AI systems to sit alongside the EU AI Act, has not moved forward since its introduction in September 2022. Following the recent European elections, the proposal is now under active consideration by the European Parliament, with the European Commission recently amending the text based on the final agreed text of the AI Act.  

We have identified the AILD as a key update in the Life sciences section.

Consultation on UK REACH

On 16 May 2024, the Department for Environment, Food and Rural Affairs launched a consultation on UK REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), seeking views on the previous government’s proposals aimed at addressing the transitional arrangements for businesses moving from EU REACH to UK REACH, whilst upholding existing human health and environmental protections. The consultation, which closed on 25 July, is expected to lead to future legislative changes.

Microplastics

Microplastics, which are small plastic particles less than 5mm in diameter commonly added to products such as paint, detergent, toys, medical devices, medicines and cosmetics, remain under the regulatory spotlight in the EU and UK owing to the risks they pose to the environment and human health:

• EU Regulation (EU) 2023/2055 (adopted in September 2023) restricts microplastics intentionally added to products under EU REACH. The rules prohibit the sale of microplastics on their own, and of products to which microplastics have been intentionally added and that release those microplastics when used. There are also certain derogations, including in relation to microplastics used at industrial sites, and their use in some medicinal products and some food additives. The EU Commission is currently considering options for reducing the unintentional release of microplastics in the aquatic environment as part of its Plastics Strategy.
• The UK’s Department for Environment, Food and Rural Affairs (DEFRA) has identified “Intentionally added microplastics” as a priority for its 2023 to 2024 UK REACH work programme. It has proposed an evidence project to review the emissions of intentionally added microplastics, and the risks they pose to human health and the environment. In April 2024, DEFRA had announced that the previous government would be introducing legislation to ban the sale and supply of wet wipes containing microplastics in the UK.

These ongoing investigations sit against a backdrop of putative class actions brought in the US against manufacturers of baby bottles and bottled water, alleging false labelling and marketing.

These developments, coupled with an increasing appetite for chemicals (namely, PFAS) litigation in the EU, as well as the growth of class actions across Europe more broadly, may give rise to an increased exposure to microplastics litigation in the EU and UK.

EU’s Ecodesign for Sustainable Products Regulation

The EU’s new Ecodesign Sustainable Products Regulation (ESPR) entered into force on 18 July 2024. Described as “the cornerstone of the Commission’s approach to more environmentally sustainable and circular products”, it aims to significantly improve the circularity, energy performance and other environmental sustainability aspects of products placed on the EU market. 

The ESPR applies to goods, but not all products. For example, food is excluded.  The legislation will work in tandem with the energy labelling regulations. It establishes a digital product passport to store information about products including that relating to their sustainability.  An online portal, accessible to consumers, will be set up to search for and compare the data included in the product passports.

As the ESPR is a framework legislation, formal product rules will be considered and introduced over time, on a product-by-product basis, or horizontally, on the basis of groups of products with similar characteristics.

Corporate accountability across the supply chain

The EU’s landmark Corporate Sustainability Due Diligence Directive came into force on 25 July 2024. It imposes extensive mandatory obligations on large EU and non-EU companies (1000+ employees and a turnover of at least €450 million) to prevent human rights abuses and environmental harms across their supply chains.  Companies with longer and complex supply chains will need to undertake comprehensive due diligence measures and implement robust risk management frameworks to ensure compliance with the Directive.

Whilst the UK’s Modern Slavery Act 2015 provides for a degree of transparency in corporate activity through the provision of a slavery and human trafficking statement each financial year, the efficacy of its provisions relating to supply chains has been called into question. This issue is currently being considered by the House of Lords Committee, which published a call for written evidence for its inquiry into the impact and effectiveness of the Act.

We have also discussed this topic in the Employers’ liability section.

The UK Product Security and Telecommunications Infrastructure (Product Security) Regime

The UK’s consumer connectable product security regime, which came into force in April 2024, imposes obligations on manufacturers, importers and distributors of in-scope UK consumer connectable products to comply with minimum security requirements to further secure those products against cyber attacks.

The Office for Product Safety Standards (OPSS) is the relevant enforcement authority.  In the event of non-compliance, it may require economic operators to provide further information to investigate any potential breach.  Economic operators may also be subject to compliance notices, such as a stop or recall notice, or financial penalties up to the greater of £10m or 4% of an organisation’s qualifying worldwide revenue in respect of a single, relevant breach.  The OPSS may also inform the public about business compliance failures and publish details of any enforcement action taken. 

New government bills

• Product Safety and Metrology Bill
• Tobacco and Vapes Bill