Producer pays

The new Product Liability Directive will open the doors much wider for the business of litigators. Class or representative actions will multiply. Third-party funding will become more prevalent. Duncan Grehan is a class act

Producers of products have faced strict liability risks under EU laws since 1985 (Directive 85/374/EEC), and this risk has been transposed into the laws of Ireland for some 35 years (Liability for Defective Products Act 1991).

Their risk will soon be even greater, as the burden of proof is placed heavily on their shoulders and its scope widens to include many AI products, as the Artificial Intelligence Act came into force in August 2024.

The old 1985 directive will be replaced by the new Product Liability Directive (EU2024/2853) (PLD), which shall become law on 9 December 2026 in all EU member states, and by when it is required to have been also transposed into national law.

Its definition of ‘product’ also expands to include AI.

Pulp fiction

The new PLD will open the doors much wider for the business of litigators. Class or representative actions will multiply. Third-party funding will become more prevalent.

Market surveillance tactics will underpin that business as – like in John Grisham fiction – research for defective products in the market becomes widespread. When one is identified, others like it (however branded) will then be discovered.

Producers face new rebuttable presumptions in favour of claimants, which alter and impose many proof burdens. The identity of a defective product has now a new appearance.

Producers, on the complainant’s application, shall produce all evidential proofs, for and against the claim. Failure to do so shall result in their product being assumed to be defective.

‘Forum shopping’ may become even more frequently a tool for the business of the litigator. While the PLD requires the producer to furnish all such evidence, member-state laws and court rules may differ.

Ireland, as the sole EU common-law member state, offers to claimants and litigators (and, indirectly, to the advantage of their underlying funders) the current right to require the defendant producer to make discovery of all relevant documentation and evidence (hard and soft), no matter in how many countries worldwide they may be located.

The ambit of this right is currently under statutory review and reform by our Department of Justice, as per its press release on 6 January.

It is uncommon in many other EU states. It is a tool or weapon to threaten so as to bring a PLD claim to an early, profitable, private, and confidential settlement.

That route is, on balance, the optimal result, also, for the producer and for its defence funders/insurers.

It avoids the huge cost risks of lengthy court processes. It avoids injurious publicity.

Such private settlement also suits the claimant team, who can then stay in control of its terms. Mediation before any court hearing is increasingly mandatory and the courts’ preferred direction.

Great expectations

Production must respect consumer-expectation standards. The law has required care and safety to be never out of sight since the 1985 regime of strict liability became EEC/EU-wide.

The test for the producer since then, similar to the common-law tort test, has been risk-foreseeability.

That duty today does not expire. The producer remains at risk for the lifetime of its product in the market and in use by any person.

Under the new PLD regime, the claimant’s three-year limitation period (within which the claim may be initiated) shall be extended to 25 years in certain circumstances, for injuries that are latent and surface within that time. 

Its article 7 widens the scope of proving a product to be defective. To fall successfully within the test that it is not defective, the product must be what “a person is entitled to expect”.

To assess that, “all circumstances shall be taken into account, including…” – article 7(2) then names nine non-exhaustive illustrative examples of such circumstances. 

These laws apply to all products in the EU market, irrespective of where in the world they were made.

Litigators before the courts of Ireland must be certified by our professional authorities in accordance with our law (be they solicitor or barrister), have their 
administrative-practice centre here, and have professional indemnity insurance.

Lawyers from other EU states who wish to represent their client before our courts can only do so in conjunction with one of us (save in cases that are very rare, exceptional, and of proven specialism).

It remains to be seen whether the Oireachtas will transpose the PLD into Irish statutory law via a ‘copy-and-paste’ method, on the basis that it is aligned with our existing law standards, or whether, as did Germany and Sweden, it will be scrutinised, article by article, before the transposed draft becomes our law by the December deadline.

Of concern is alignment with our current due and fair-process rights, burden-of-proof tests, and constitutional rights. 

In bloom

Our national economy blossomed due to foreign direct investment, especially in the product manufacturing sector – now including giant social-media and AI producers.

Ireland will remain attractive for producers who prefer a base in an EU state that is English-speaking, has low corporation tax rates, and has a common-law tradition. 

The ‘Ireland base’ choice may include balancing up the risk and threats of mass class or representative claims, clever market surveillance, and forum shopping – and also because of the classic range of available defence armour in our law, such as champerty, crowd funding, contributory negligence, voluntary risk taking, delay, and absent sufficient locus standi.

Our law infrastructure and fair process tests are currently due major statutory reform.

Duncan Grehan is a solicitor, a CEDR-accredited mediator, and vice-chair of the Law Society’s EU and International Affairs Committee. 

LOOK IT UP

LEGISLATION:

• EC (General Product Safety) Regulations 2004 (SI 199/2004)
• EU Artificial Intelligence Act (EU Regulation 2024/1689, amending EU 2020/1828)
• General Product Safety Directive (2001/95/EC)
• General Product Safety Regulation (EU 2023/988)
• Liability for Defective Products Act 1991
• Product Liability Directive (85/374/EEC)
• Product Liability Directive (Directive (EU) 2024/2853)

LITERATURE:

• Duncan Grehan, ‘Right of audience’ (October 2021 Gazette, p54)
• Speaker papers at the IBEC/Irish Centre for European Law seminar on the Product Liability Directive (19 November 2025)