ECJ Ruling of December 19, 2024 – C-157/23
With its ruling of December 19, 2024, the European Court of Justice (ECJ) has tightened the application of the Product Liability Directive (Case No. C-157/23). According to the ruling, suppliers can also be held liable for defective products if their name or identifying mark fully or partially matches that of the manufacturer.
The ruling significantly increases the product liability risk for suppliers and other distribution partners, according to the commercial law firm MTR Legal Rechtsanwälte, which advises, among other areas, in business law.
Car Purchased in Italy
The underlying case involved a consumer who purchased a vehicle from an authorized dealer of the manufacturer in Italy. The car had been manufactured in Germany and delivered to the dealer through the Italian branch of the brand.
A few months after the purchase, the buyer was involved in an accident during which the airbag failed to deploy due to a defect. The consumer then filed a claim for damages against both the dealer and the Italian branch of the manufacturer.
The latter argued that it had only supplied, not manufactured, the vehicle. The car had been built in Germany, as also shown on the invoice. Therefore, it claimed it was not liable as a manufacturer.
Supplier Also Liable
However, the court in Bologna rejected this argument and found the Italian company liable under non-contractual liability for the defective airbag. The appeal was unsuccessful. The appeals court clarified that the Italian entity, as the supplier of the vehicle, bore the same liability as the manufacturer. It was “to be treated as equivalent to the manufacturer who was not joined in the proceedings.” Since the defendant failed to involve the manufacturer in the legal dispute, it had no right to indemnification.
The case eventually reached Italy’s Court of Cassation, which referred the matter to the ECJ. The ECJ was asked to clarify whether, under the EU Product Liability Directive, a supplier could be considered a “person presenting themselves as the manufacturer” even if their name, trademark, or other identifying mark was not physically affixed to the product but they made use of the manufacturer’s trademark or name.
Broad Interpretation of Manufacturer Liability
The ECJ ruled that anyone who uses the name and logo of a manufacturer cannot claim, vis-à-vis consumers, not to be the actual manufacturer of the defective product.
The court reasoned that, under Article 1 of Directive 85/374, the manufacturer is generally liable for damage caused by defective products. However, Article 3 of the directive also stipulates that individuals involved in the production and distribution of the product may likewise be liable. This includes anyone who presents themselves as a manufacturer by affixing their name, trademark, or other identifying mark to the product. It is therefore not necessary for a person presenting themselves as the manufacturer to be involved in the actual manufacturing process in order to be deemed a manufacturer, according to the ECJ.
ECJ Strengthens Consumer Protection
Accordingly, the ECJ clarified that a company that does not itself produce vehicles, but purchases them from the manufacturer for distribution in another Member State, can be regarded as a manufacturer under the directive. It is irrelevant whether the company physically places its own name on the product or whether its name corresponds to the name of the manufacturer already affixed. This is because it uses this similarity to promote the quality of the product and to instill consumer trust. The term “manufacturer” must therefore be interpreted broadly in the interest of consumer protection. The liability of any person presenting themselves as the manufacturer must correspond to that of the actual manufacturer.
The ECJ’s decision affects not only distributors in the automotive sector but also those in other industries. Manufacturer liability has been significantly expanded by this ruling for suppliers and distribution partners. Companies concerned should prepare accordingly.
MTR Legal Rechtsanwälte advises on product liability and other topics in business law.
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