On 09.12.2024 a new Directive 2024/2853 of the European Union (“EU”) on liability for defective products (the “Directive”) came into force. The Directive amends the existing legal framework, adapting it to technological progress at a global level, and repeals the existing directive on this matter transposed in the Consumer Protection Act.

Firstly, the Directive significantly broadens the definition of “product” and, in addition to compensation for damage, caused by movables (i.e. tangible goods), consumers will also be enabled to claim compensation for damage caused by digital products, including software, applications and artificial intelligence systems.

Secondly, the Directive regulates the right to seek compensation for a wider range of damages in addition to those relating to personal injury/death or harm to other property of the consumer caused by the defective product. Consumers will now be able to also claim for damages to their psychological health established by medical records, as well as damages for the destruction of electronic data (e.g. digital files deleted from a hard drive), including the costs of recovering and restoring that data.

In order to ensure maximum consumer protection, the Directive provides for the possibility to hold liable any manufacturer involved in the production process of the defective product or a product component. If the product is manufactured outside the EU, liability could be directed against the company importing the product or an authorized representative of the manufacturer established in the EU. If these persons are also not located in a Member State, the claim could also be brought against the service providers, as well as distributors. The aim of the Directive is to 'spread' liability for damages as widely as possible to as many of the participants in the 'chain' (manufacturers, distributors, service providers, etc.) who have a personal responsibility to monitor the quality of the goods manufactured and/or imported/sold by them.

In principle, the person claiming damages must prove the damage, the defect in the product and the causal link between them. However, reflecting the considerably less favourable position of consumers, the Directive eases the burden of proof and provides for the right of the injured party to request access to documents in the possession of the manufacturer which would make it easier for him to prove his claim. Such a possibility exists in principle under Bulgarian procedural law, but it should be taken into account that the consumer must have sufficient information to assess what documents he should request from the trader to substantiate his claim.

Although the burden of proof is generally on the consumer, the Directive also provides for a number of rebuttable presumptions and when either of them occurs, the product is presumed to be defective.

In particular, a product may be presumed to be defective if it is proved that it does not comply with the rules on product safety laid down in national and EU law; if there is an obvious malfunction of the product in its normal use; and if the manufacturer fails to provide the documents (evidence) requested by the claimant. The presumption of causality, on the other hand, takes effect when it is established that the product is defective and the damage caused is of a kind which corresponds in principle to that defect.

If it is established that more than one person is liable for the defect (for example, the manufacturer and the distributor), the liability is joint and several. If compensation is paid by one person in full, they will have a right of recourse against the other liable persons in the “chain”.

Member States have two years to transpose the Directive into national law, a process which will undoubtedly involve amendments to existing national regulation regarding consumer law and will be of particular importance to businesses, as traders (even if they are not the manufacturer) will be obliged to examine the quality of the products in their portfolio.