In this legal circular, we shall address the new EU Directive on liability for defective products. We remind readers that directives, unlike EU regulations, do not have direct effect in the territory of the Czech Republic and therefore require the adoption of implementing legislation. The Directive on liability for defective products was adopted by the Council of the European Union on 10 October 2024 and is to replace the currently effective Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products, which is transposed into Czech law by the provisions of Sections 2939 to 2943 of the Civil Code.

Compared to the older EU regulation, under which the producer was primarily liable for damage caused by a defective product, the new Directive extends liability (upon fulfilment of defined conditions) to other economic operators as well. Given that the new rules may affect online traders in multiple roles, particularly in the position of distributor and possibly also importer, we considered it appropriate to summarise them briefly at this early stage.

The liability of a distributor, being “any person in the supply chain, other than the producer or the importer, who makes a product available on the market,” shall arise pursuant to Article 7 of the new Directive in cases where it is not possible to identify the producer, importer or authorised representative of the producer established in the EU. In such a situation, the person injured by a defect in the product may call upon the distributor to identify the relevant producer, importer or authorised representative established in the EU, or at least to state which person supplied the product in question to them. If the distributor fails to identify any of the aforementioned entities within one month of receiving the injured person’s request, they shall bear liability for the damage caused to the injured person by the defect in the product. In other cases, however, they shall be exempt from liability for damage.

Under the aforementioned conditions, such providers of an online platform who “present a product or otherwise enable consumers to conclude a distance contract with a trader in a manner that leads an average consumer to believe that the product is provided by the online platform itself or by a trader acting on its behalf or under its supervision” shall also be liable for damage. However, if the provider of an online platform merely fulfils the role of intermediary between traders and consumers in relation to the defective product, they shall not be liable for damage caused by the product.

Importers shall then, pursuant to Article 7(2) of the new Directive, be liable for damage caused by a defect in a product in all cases where the producer is established outside the EU, jointly with authorised representatives of the given producer in the EU. The liability of importers is regulated in a similar manner by Section 2939(2) of the Civil Code; the new Directive therefore does not bring fundamental changes in this regard.

For completeness, we note in conclusion that, in addition to the scope of economic operators liable for damage caused by a defect in a product, the new Directive also extends the concept of product, expressly stating in Article 4 that digital files and software also constitute products. Consumers shall thus be able, under the new regulation, to claim, for example, compensation for damage arising as a result of destruction or corruption of data. The Directive also abolishes the existing limitation which allowed consumers to claim only compensation for damage exceeding the amount of EUR 500.

Cecílie Sekalová

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 10/2024 intended for members of that association.

This text was translated from Czech to English using an AI translator.