Liability for defective digital health products
Proposed changes to the current regime governing liability for faulty digital health products, and products in general, are expected to be introduced in the EU in the coming months. The proposals are likely to include changes to current EU liability rules and may require further changes to existing national laws. The proposals aim to update the liability rules to take into account the evolution of the digital economy and emerging technologies.
Liability for faulty digital health products, and products in general, is determined by a combination of European and Irish laws. The current EU legal framework is set out in Council Directive 85/374/EEC (the Directive), which was adopted in 1985 and implemented into Irish law by the Liability for Defective Products Act 1991 (the law of 1991). The Directive and the 1991 Act provide for strict liability where a defect in a producer’s product has caused harm or damage to the consumer, provided that the consumer can prove the existence of the defect, the damage and a causal link between them. In addition to this strict liability regime, under Irish law liability for injury or damage caused by the products may also arise from fault-based principles, such as common law principles of negligence.
A revision of the directive has been ongoing for several years. A 2018 assessment of the Directive by the European Commission (the 2018 Assessment) found that it was difficult to apply to digital products due to outdated concepts and definitions in the Directive.
He also found it difficult for consumers to obtain compensation due to difficulties in proving that complex products, especially digital products, were faulty and caused the injury or damage. It is likely that the proposed changes to the directive will include revisions to some key definitions. These changes are likely to have particular significance for digital health products.
For example, although the current definition of “product” is broad and encompasses digital health products, the definition is no longer so clear in the digital age, where the lines between products and services can be blurred. Problems have also arisen with identifying the ‘producer’ of a product, as products from one producer can now be easily combined with products and services from other suppliers. The current definition of “flaw” may also cause uncertainty in the context of issues unique to the digital age, such as flaws in autonomous behaviors and processes, and privacy and data breaches. The 2018 assessment also noted that the current definition of “damage” is limited to physical and material damage, but does not include other types of damage, such as economic or environmental damage.
In addition to definitional issues, the 2018 assessment highlighted concerns about the balance between consumer and producer interests, in particular regarding the burden of proof. The more complex a product, where it may be difficult to access the required technical information, and this may be particularly the case with digital products, the more difficult it is likely to be for a consumer to prove that there was a defect in the product or to prove the causal link between a defect and damage.
The Commission recently published a summary report on the public consultation it carried out from October 2021 to January 2022 on adapting the current EU liability rules to the digital age. The objective of the public consultation was to assess the relevance of the issues identified by the 2018 assessment. Stakeholder interviews, workshops and targeted consultations were conducted alongside the public consultation.
The public consultation highlighted diverging views on adapting the current liability rules. Some stakeholders, particularly those representing consumer interests, believe that the current regime is inadequate in the digital age and does not adequately address issues related to digital and emerging technologies. Other stakeholders, in particular those representing industry interests, consider that the existing rules and concepts are broadly adequate and strike the right balance, and are not in favor of a major change to the Directive.
A total of 291 replies and various position papers were received in response to questions on the adaptation of the Directive. Over 93% of responses came from EU Member States, with the largest proportion, over a third, coming from Germany. Only one response was received from Ireland. Just under 7% of responses came from non-EU countries, including the UK and the US. Opinions expressed in the public consultation show diverging views among stakeholders on various issues, including liability for intangible products such as software and digital services, the position regarding online marketplaces not European Unions, new risks and types of damage, and policy options for adapting the directive.
Respondents mostly agreed that consumers should be compensated when intangible products, such as software and digital services, are faulty and cause physical or material damage, particularly in the case of software that controls the operation of a product. , software upgrades or updates, separately provided software for use on a product, and digital services that control the operation of a product. However, there was disagreement on how data or information issues should be taken into account in liability rules.
More than two-thirds of respondents agreed or strongly agreed that the directive should ensure consumer protection for faulty products purchased from online marketplaces where there is no producer or supplier. importer based in the EU. There was disagreement over whether the Digital Services Bill and the proposed General Product Safety Regulations were sufficient to provide consumer protection in the context of online marketplaces.
A majority of respondents agreed or strongly agreed that producers should be held liable for failure to provide security updates, that producers should be liable for damage to data, and that producers should be held accountable for data protection breaches.
Academic and research institutions, consumer organizations and NGOs supported the legislative change, while trade associations, businesses and businesses largely opposed it. Overall, 56% of respondents, excluding individual members of the public, favored legislative change, with 62% favoring treating digital content and software as a product in its own right.
The Commission is expected to present proposals for a revised liability framework for defective products in the third quarter of 2022. It remains to be seen what changes will be proposed to the current liability rules and how these will have a specific impact on digital health products. .