The European Product Liability Directive: A Comparison with U.S. Law, an Analysis of Its Impact on Trade, and a Recommendation for Reform So as to Accomplish Harmonization and Consumer Protection

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I. Introduction

On July 25, 1985, the Council of the European Communities adopted a product liability directive(1) (the Directive) that has engendered a wide and varied debate among industry and consumer groups,(2) as well as within the legal community.(3) The Directive(4) has been legislatively adopted by all the Member States of the European Union (EU) (as the European Community (EC) is now known) except Ireland, France, and Spain.(5) However, the debate over the Directive's impact on litigation and on competition in the EU has yet to be resolved. This Note will undertake an analysis of the Directive with an eye toward that debate.

The author will first analyze the Directive, its history and implementation, and the interesting and relevant differences between it and U.S. product liability law, from a doctrinal standpoint. The Note will next discuss the impact of the Directive on trade in light of various predictions by scholars. The author will explain why fears of a European product liability crisis on a U.S. scale are unfounded, in large part because of the important procedural structures discouraging litigation in Europe. The analysis will conclude with a call for reform of the Directive itself, justified by the Directive's purported goals of protecting European consumers and harmonizing European product liability law so as to create a level competitive playing field in the EU.(6)

II. The Scope and Direction of the Directive

The Directive begins with a simple but far-reaching prescription: "The producer shall be liable for damage caused by a defect in his product."(7) Thus, with a single sentence, the Directive wipes away years of negligence doctrine in European product liability law, with one caveat. After a Member State has enacted the Directive, a plaintiff may still employ that country's previously available tort and contract remedies,(8) unless the individual country's enabling legislation eliminates them.

The Directive next defines key relevant terms such as product, producer, and defective.(9) The term product, which includes electricity, encompasses all movable articles except primary agricultural products and game.(10) The Directive's designation of what qualifies as a producer is expansive, and therefore threatens more individuals and companies with liability than those currently exposed to litigation under the present legal regimes in EU countries.(11) The Directive provides that product or component part manufacturers, producers of raw materials, and those who present themselves as producers all meet the definition of producers.(12) Were these the only qualifications, perhaps the Directive would not have occasioned such an outcry from industry concerns. However, the Directive also defines those who import products into the EU as producers.(13) Finally, the Directive permits plaintiffs to treat each supplier (of the product causing the injury) as a defendant-producer unless that supplier apprises the plaintiff "of the identity of the producer or of the person who supplied him with the product."(14) This places the burden on the named defendant to prove that he is not the producer. Thus, the Directive places a higher burden on product liability defendants than they face under U.S. law, where the burden of proof for identifying the defendant rests with the plaintiff.(15)

Further, under Article 4, the plaintiff need only prove the defect in the product, the damage suffered, and the causal link between the two.(16) Implicitly, the plaintiff is encouraged to assert that any supplier is the producer, thereby forcing the named supplier to try and avoid liability by naming another "producer," or by proving that "the defect which caused the damage [probably] did not exist . . . when put into circulation by" the supplier but "came into being afterwards."(17)

A product is defective under the Directive according to a consumer expectations test. …