Proposal for a European Parliament and Council Directive amending Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products
Date: 1997-10-01
Institutions: European Commission
Subjects: application of EU law, approximation of laws, consumer protection, defective product, product safety

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 01.10.1997 
COM(97) 478  final 

97/0244 (COD) 

Proposal for a 

EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 

amending Council Directive 85/374/EEC of 25 July 1985 on the approximation of the 
laws, regulations and administrative provisions of the Member States concerning liability 
for defective products 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

I.  GENERAL  COMMENTS 

Context 

A. 

Consumer health within the single market 

1.  The  events  surrounding  the  BSE  crisis1  have  proved  a  challenge  to  the  European 
Union,  that  of  meeting  consumers'  legitimate  expectation  that  their  health  will  be 
protected within the single market.  This expectation, which is primarily reflected  in 
a  strong  concern  regarding  food  safety,2  is  particularly  legitimate  in  the  single 
market.  The  free  movement  of  goods,  one  of  the  basic  objectives  on  which  the 
completion  and  proper  functioning  of  the  single  market  rests,  must  not,  under  the 
terms  of the  Treaty,  be to the detriment  of consumer  health  protection.  Article  36 
explicitly  refers  to  the  protection  of  health  as  a  concern  which justifies  measures 
derogating  from  the  principle  of  the  free  movement  of  goods.  This  protection  is 
therefore  not sacrificed  to the fundamental  principle of this  freedom. 

2. 

In  order  to  meet  this  expectation,  the  Commission  has  at  its  disposal  a number  of 
legal  instruments  concerned  with  general  product  safety  (Council  Directive 
92/59/EEC  of  29 June  1992)  and  compensation  of  victims  of  defective  products 
(Council  Directive  85/374/EEC  of  25 July  1985).  These  instruments  require  all 
producers  to  place  on  the  market  only  such  products  as  are  safe  and  makes  them 
liable for repairing any damage caused by their defective products. 

B.  Council  Directive  of  25 July 1985  on 

liability 

for  defective  products 

(85/374/EEC) 

in  Directive  85/374/EEC. 

3.  Any  modern  society  demands  to  be  protected  by  means  of  a  mechanism  of 
compensation for damage resulting from the risks of industrial production, such as is 
provided  for 
the 
Member States'  laws  concerning  the  producer's  liability  for  damage  caused  by 
safety  defects  in  his  products.  This  legislation  has  been  implemented  in  all 
Member States  except  France.  The  system  of  liability  without  fault  introduced  by 
the  Directive  means that  producers  are  liable  for  the damage  caused  by  a defect  in 
their product where the victim provides evidence of the existence of the damage, the 

This  Directive  approximated 

On 20 March  1996, the UK authorities announced  the possible existence of a link  between  the variant 
of  Creutzfeld-Jacob  disease  and  bovine  spongiform  encephalopathy  (BSE).  This  sparked  an 
unprecedented  crisis of consumer confidence  in beef and beef products. 
35%  of  EU  citizens  consider  that  food  is not  safe.  Food  safety  tops  the  list  of  concerns  of  68% of 
interviewees (90% in France and 39% in Finland), followed  by the safety  of pharmaceutical  products, 
with  64% of those questioned  considering that  safety  is not  guaranteed  beyond  international  borders. 
Source: Eurobarometer 47.0, 21 May 1997. 

2 

defect and the causal relationship between defect  and damage.  The Community  thus 
struck a reasonable balance between the various interests involved: 

- 

that  of  consumers  to  face  up  to  the  risks  of  a  modern  industrial  society  with  a 
high degree of technicality for their health and physical and material  safety; 

- 

that of producers 

* 

* 

to  avoid  distortions  of  competition  resulting  from  the  differences 
liability  (liability  with/without 
between  existing  systems  of  civil 
limited/unlimited  fault), and 

to  reduce  the  impact  which  these  different  systems  have  on  investment 
initiatives in the field of innovation and development. 

4.  Despite  the  Commission's  efforts  during  discussions  within  the  Council,  the 
harmonisation  resulting  from  the  1985  Directive  is  not  total.  The  unanimity 
required  for the adoption of legislation on the basis of Article  100 of the Treaty  led 
to  compromises  on  several  points  of  the  Commission's  proposal.  These  took  the 
form  of  general  rules  from  which  Member States  may  derogate  for  a  transitional 
period  (Articles  15  and  16)  at  the  end  of  which  the  Member State  should,  on  a 
proposal from the Commission, adopt the permanent solution. 

5.  Thus,  as  a  general  rule,  primary  agricultural  products  (i.e.  products  of  the  soil, 
stock-farming  and  of  fisheries)  and  game  are  not  covered  by  the  Directive's 
provisions.  However, products which have undergone initial processing are covered 
(Article  2).  Nevertheless,  Member States  may,  under  Article  15(l)(a),  provide  for 
liability  on the part  of  agricultural  producers  for  defective  primary  products.  This 
derogation has been used by Greece, Luxembourg, Sweden and Finland.3 

6. 

In  1995, the Commission  adopted  its first  report on the application  of the  Directive 
and  its  effects  on  the  proper  functioning  of  the  single  market  and  consumer 
protection  (COM(95) 617 final,  13.12.1995).  It describes the Directive  as being  an 
important piece of legislation which has contributed towards an increased  awareness 
of  and  emphasis  on  product  safety  and  has  eased  the  burden  of  the  plaintiff  in 
proving his case (since the producer's fault does not have to be proved).  With regard 
to  the  information  obtained  regarding  the  application  of  the  Directive,  the 
Commission did not consider it necessary, at that stage, to submit any proposals  for 
its  amendment.  Nevertheless,  it  indicated  that  certain  aspects  concerning  the 
protection  of  consumers  and  the  functioning  of  the  internal  market  required 
continued monitoring, including the exclusion of primary agricultural products. 

C.  The  European  Parliament's  recommendation  that  Directive  85/374/EEC  be 

amended 

3 

In France, draft  Law No 469 on liability for defective  products, adopted (first  reading) by the National 
Assembly  on  13 March  1997,  also  includes  primary  products  within  its  scope.  National  Assembly, 
Report No 3411 of the Committer on constitutional  laws, legislation  and general  administration  of the 
Republic  on  draft  Law  (No  469)  by  Mrs  Nicole  Catala,  6 March  1997:  "As the  "mad cow disease" 
incident clearly  shows,  this  type  of product  should  he  covered  by  the  system  of  objective  liability 
resulting from the Directive in order to offer the same protection  to the consumer irrespective of the 
defective product in question". 

3 

7.  Further  to  the  deliberations  of  the  Temporary  Committee  of  Inquiry  into  BSE 
(MEDINA  Report,  doc. 220.544),  the  European  Parliament  recommended  that 
Directive 85/374/EEC be amended by September  1997 at the latest in such a way as 
It  called  on  the  Commission,  the 
to  extend  it  to  primary  agricultural  products. 
Council  and  the  Member States  to  take  appropriate  measures  to  follow  up  and 
implement  this recommendation.4  The recommendation  is not a resolution  adopted 
pursuant to Article  138b of the Treaty  (legislative  initiative)  but rather a suggestion 
made by the Committee of Inquiry under Article  138c of the Treaty. 

Commission  proposal  to  amend  Directive  85/374/EEC  to 
agricultural products within its scope 

include  primary 

8.  The  Commission  considers  that  including  primary  agricultural  products  within  the 
scope  of  Directive  85/374/EEC  would  be  an  important  step  towards  improving 
consumer protection under Community law even if such a measure obviously  cannot 
itself solve the problems likely to arise in this area.5  Including primary  agricultural 
products  within  the  scope  of  Directive  85/374/EEC  would  be  of  benefit  to  all  the 
initiatives  launched  in  an  attempt  to  win  back  consumer  confidence  in  agricultural 
products.  The  Commission  takes  the  view  that  all  agricultural  products,  whether 
consumed  in their  natural  form  or after  processing,  must  be  covered  by  the  system 
of liability without fault laid down in the Directive.  Consequently, it proposes to the 
European  Parliament  and  to  the  Council  that  the  Directive  be  amended  in  such  a 
way  as  to  restore  its  original  proposal  from  1976  on  this  point  (COM(76) 372). 
Nevertheless, the Commission  considers that extending the Directive's  scope in this 
way will not dispense with the need  for  appropriate rules concerning product  safety 
it  would  constitute  a 
and  efficient  official  control  mechanisms  but 
complementary  measure. 

that 

9.  The  European  Parliament  was  originally  opposed,  in  the  face  of  strong  pressure 
from  the  agricultural  sector,  to  including  agricultural  products  within  the  scope  of 
the  Directive. 
It  was  argued  at  that  time  that  objective  liability  for  defective 
agricultural  products  might  be  too  great  a  burden  if  these  products  were  not 
(CALEWAERT  Report,  doc.  71/79,  OJNoC127, 
industrially  manufactured 
21.5.1979,  p. 61). 
In  presenting  its  amended  proposal  (COM(79)415),  the 
Commission  considered  it justified,  in line with Parliament's  suggestion, to  exclude 
natural  agricultural  products  (as  opposed  to  agricultural  products  manufactured 
industrially)  from  the  scope  of  the  Directive.  Finally,  the  solution  adopted  (see 
point  5 above) was the result of a compromise  between  Member States opposed  to 
excluding  these  products,  which  saw  it  as  an  unjustified  restriction  of  consumer 
protection, and those which were in favour of excluding them. 

10.  In deciding to revive its previous proposal, the Commission  has taken the  following 

factors  into account, over and above Parliament's recommendation  : 

(a) 

Public  expectations  of  greater  protection  of  health:  Harmonisation  of 
standards  designed  to  protect  consumers  are  at  the  heart  of  demands  by 

4  Resolution  on  the  results  of  the  Temporary  Committee  of  Inquiry  into  BSE,  doc.  PE 257.005, 

OJ  NoC85,  17.3.1997. 

5  Green  Paper on the general principles of food  law in the European  Union (COM(97)  176, 30.4.1997). 

European  citizens.  The  Commission  noted  when  drawing  up  its  Green 
Paper  on  the  general  principles  of  food  law  in  the  European  Union  that 
requests for primary  agricultural  products to be included  in the  Directive's 
scope  were  being  made  with  increasing  frequency.  They  have  become 
even  more  urgent  in  view  of  the  fears  raised  by  BSE.6  Parliament's 
recommendation  merely  echoes  the  great  concern  among  the  European 
public  for  greater  food  safety  in  general,  and  in  particular  with  regard  to 
primary agricultural products. 

laws  on  the  liability  of  agriculture 
The  existence  of  national 
producers:  The  Commission  shares  with  several  Member States  the 
concern  that  consumers'  health  should  be  protected  with  regard  to 
agricultural  products  and  that  the  system  of  compensation  for  damage 
should  be  more  efficient.  This  is  the  reason  for  the  various  national 
provisions  which  lay  down  liability  without  fault  on  the  part  of 
agricultural  producers,  in  accordance  with  the  option  provided  for  in 
Article  15 of the Directive.7  In this respect, the only  Member State which 
has not  yet  transposed  the  Directive  plans,  largely  as  a result  of  the  BSE 
crisis,  to  include  these  products  within  the  scope  of  its  implementing 
legislation.8 

The lack of irreversible effects  on  agricultural  economies:  In the same 
way  that  no  irreversible  effects  were  observed  for  industries  and  insurers 
in  general  when  the  first  report  on  Directive  85/374/EEC  was  drawn  up 
(as  was  suggested  would  be  the  case  when  the  Directive  was  adopted), 
there  is  nothing  to  indicate  a priori  that  including  agricultural  products 
within  its  scope  will  have  an  irreversible  negative  impact  on  agricultural 
economies.  Experience  in  those  countries  which  have  made  use  of  the 
derogation  provided  for  in  Article  15  has  revealed  no  evidence  of  any 
particular effects  on agricultural economies. 

Uncertainty as to the scope of the exclusion resulting from the concept 
of  "processing":  Directive  85/374/EEC  covers  products  of  the  soil, 
stock-farming  and  of fisheries which  have undergone  "initial  processing". 
This  concept9  constitutes  the  dividing  line  between  excluded  agricultural 
products  (primary  products)  and  those  which  the  Directive  covers 
(processed  product).  It  is  obvious  that  agricultural  production  does  not 

(b) 

(c) 

(d) 

H 

6 
See also the recommendation  of the Consumers Committee of 9 October  1996 supporting  inclusion. 
7  Greece  (Article  6.1.  of  Law  No  2251/94),  Luxembourg  (Article  1.2.1.  of  the  Law  of  21.4.1989), 
Finland (Section  1, subparagraph  2, of Law No 694 of  17.8.1990), Sweden  (Section 2 of Law  1992:18 
of 31.1.1992). 
I'rance.  See  footnote  3. 
In  addition,  this  proposal  is  consistent  with  legislation  on  liability  for 
defective  products  in other  countries  where  agricultural  producers  are considered  liable  without  fault 
(the United  States, Norway). 
Judgment of the Court of Justice of 29.5.1974 in Case  185/73 Kônig, LCR 11974] 619; "the concept of 
'products  of  first-stage  processing  directly  related'  to  the  basic  products,  must  be  interpreted  as 
implying  a  clear  economic  interdependence  between  basic products  and  products  resulting  from  a 
productive  process,  irrespective  of  the  number  of  operations  involved  therein.  Processed  products 
which have  undergone  a  productive  process,  the  cost  of  which  is  such  that  the price  of  the  basic 
agricultural raw materials becomes a completely marginal cost, are there/ore excluded." 

l) 

escape  the  effects  of  industrialisation  (e.g.  the  use  of  preserving 
techniques, deep-freezing,  etc., which might involve risks), but the extent 
of such industrialisation  is not apparent:  the question is at what point the 
use  of  a  technique  on  a  primary  agricultural  product  involves  "initial 
processing".  Aware  as  it  is  of  doubts  on  this  subject,  the  Commission 
considers  that  any  uncertainty  regarding  this  concept  might  discourage 
consumers from pursuing claims.  Including primary  products will put  an 
end to these uncertainties. 

(e) 

Imperfect harmonisation:  Directive 85/374/EEC has not led to complete 
harmonisation.  Consequently,  there  is  no  uniform  rule  governing  the 
liability  of  farmers,  and  this  means  that  competition  is  distorted  and  the 
free  movement of agricultural products is impeded.  Producers are  subject 
to different  arrangements  depending  on  where  their  product  is placed  on 
the market.  Thus, free movement is affected  in the sense that the decision 
to  place  one  Member State's  products  on  the  market  of  another 
Member State  might  depend  on  whether  or  not  there  is  a  system  of 
liability  without  fault  for  the products  in  question.  The  flow  of  trade  in 
agricultural  products  is  thus  affected  by  conditions  relating  to  the 
producer's liability. 

Legal basis 

11.  Directive 85/374/EEC is based on Article  100 of the EEC Treaty.  The  Commission 
proposes  that  it  be  amended  on  the  basis  of  Article  100a  of  the  EC  Treaty,  as  a 
derogation  from  Article  100.  It  considers  that  the  proposal  has  an  impact  on  the 
functioning  of  the  single  market  to  the  extent  that  trade  in  agricultural  products 
should  not  be  affected  by  differences  in  rules  governing  the  liability  of  producers. 
The amendment takes the form of a directive. 

12.  The Commission  has taken due account of Article  7c of the EC Treaty and  there  is 
no need to envisage special provisions or exceptions for the time being.  Likewise, it 
has  examined  the  question  of  the  high  level  of  protection  required  in  the  area  of 
health, 
safety,  environmental  protection  and  consumer  protection  under 
Article  100a(3)  of  the  EC  Treaty.  In  this  respect,  including  agricultural  products 
within  the  Directive's  scope  provides  a  high  level  of  protection  for  consumers,  as 
already exists in several Member States. 

13.  Directive  85/374/EEC  relates  to  a  field  covered  by  the  EEA  Agreement  (see 
Article 23(c)  and  Annex  III  "Product  liability"  of the  EEA  Agreement,  OJ No L 1, 
3.1,1994,  pp.11  and  321 ).10  Consequently,  the  amendment  contained  in  this 
document  should  be  extended  to  the  EEA  in  accordance  with  that  Agreement,  in 
particular Articles 97 et seq. thereof. 

Simplification  and consistency with other Community policies 

10  The  HFTA  states  party  to 

the  Agreement  (Iceland,  Liechtenstein  and  Norway)  have  notified  their 
national  implementing  measures  for  Directive  85/374/EEC.  Source:  EFTA  Surveillance  Authority, 
Interim  Report on  Transposition  Status of Directives, 4 June  1997, p.  41. 

6 

14.  The proposed  amendment will  simplify  the provisions of Directive  85/374/EEC  by 
eliminating  the  derogation  provided  for  in  Article  15(l)(a).  Thus,  the  system  of 
responsibility  for  defects  will be extended throughout the single market to all types 
of product, without exception. 

15.  This proposal is consistent with the aims of all Community policies, in particular the 
protection  of  consumer  health  and  the  common  agricultural  policy.  Amending 
Directive  85/374/EEC will help to  achieve a higher  degree of consumer  protection, 
which  is  a  Community  objective  pursuant  to  Article  129a  of  the  EC  Treaty. 
Moreover,  trade  in  agricultural  products  will  be  made  easier  by  the  elimination  of 
the  legal  differences  which  exist  between  Member States  with  regard  to  the  civil 
liability of producers. 

II.  JUSTIFICATION OF THE PROPOSAL IN THE LIGHT OF THE 
PRINCIPLE OF PROPORTIONALITY 

What  are  the  objectives  of  the  proposed  measure,  and  how  do  they  relate  to  the 
Community's  obligations? 

16.  The  measure's  objectives  are  to  increase  the  level  of  consumer  protection  against 
damage caused to their health and property by a defective  product and to further  the 
approximation of national laws with regard to liability for defective  products  started 
by  Directive  85/374/EEC.  These  objectives  form  part  of  the  strategic  target  of 
delivering  a  single  market  for  the  benefit  of  all  citizens,  as  set  out  by  the 
Commission  in  its Action  Plan  for  the  Single  Market  (CSE(97)1,  4.1.1997).  This 
means  enhancing  the  advantages  of  the  single  market  by  strengthening  the 
guarantees  offered  to  consumers  on  the  basis  of  a  high  level  of  protection  in  the 
fields of health and  safety. 

Is the measure in an area where the Community has exclusive competence  or  where 
it shares competence with the Member States? 

17.  The  measure  falls  within  the  exclusive  competence  of  the  Community:  the 
establishment  and  functioning  of  the  single  market.  In  addition,  since  Directive 
85/374/EEC  was  adopted  on  the  basis  of  Article  100  of  the  EEC  Treaty,  the 
Community has exclusive competence in the field  of liability for defective  products 
for all the aspects covered by the Directive. 

Are the means of Community action proportionate to the objectives? 

18.  The proposed amendment  is limited to revising the system  of  liability  without  fault 
laid  down  in  Directive  85/374/EEC  to  the  extent  which  is  strictly  necessary  to 
increase  consumer  confidence  in  all  types  of  products  in  circulation  in  the  single 
market.  It  merely  includes  primary  agricultural  products  within  the  scope  of  the 
Directive by eliminating any possibility of derogation. 

III.  ANALYSIS OF THE PROPOSAL 

Article 1 

19.  This  Article  deletes  the  exception  regarding  "primary  agricultural  products  and 
game"  from  Article  2  of  Directive  85/374/EEC.  This  means  that  agricultural 
products and game must be deemed to constitute  "products" for the purposes  of the 
Directive.  The  term  "agricultural  products"  is taken  from  Article  38(1)  of  the EC 
Treaty  and  covers those  products  listed  in Annex  II to the  Treaty  (see Annex  A to 
this document).  Technically  speaking, the proposal transforms the option granted to 
Member States under Article  I5(l)(a) into a general rule. 

20.  Any  consumer  affected  by  one  of  these  products  supplied  via  the  distribution 
network  will  be  able  to  claim  liability  on  the  part  of  the  producer  as  defined  in 
Article 3, i.e. as 

the manufacturer  of a finished  product, 
the producer of any raw material, 
the manufacturer  of a component part, 

- 
- 
- 
-  any person  who, by putting  his name, trade mark or other  distinguishing  feature 

on the product presents himself as its producer, 

-  any  person  who  imports  into the  Community  a product  for  sale, hire,  leasing  or 

- 

any form of distribution, or 
the  supplier,  in  accordance  with  the  conditions  of  Article  3(3)  (where  the 
producer or the person who supplied him with the product cannot be identified). 

21.  All of the rules of Directive 95/374/EEC apply to agricultural producers: the  injured 
person's burden  of proof,11 joint  and several  liability  where more that one person  is 
liable,  the  notion  of  safety  defect,  the  reasons  for  exemption  under  Article  7,  the 
damage  covered,  the time  limits  for  proceedings  for  recovery  of  damages, the  fact 
that liability may not voluntarily be limited or excluded, and the fact that other rules 
of the law of contractual or non-contractual liability are not  affected. 

Article 2 

22.  This  Article  deals  with  the  implementation  by  the  Member States  of  provisions  to 
comply  with  the  Directive.  The  deadline  for  implementation  will  be  added 
subsequently.  This  provision  states  that  the  new  rules  will  apply  to  primary 
agricultural  products  and  game  put  into  circulation  from  the  date  on  which  the 
Directive  enters  into  force,  i.e.  1  January  1999.  The  directive  will  not  have 

in  the  beef  sector,  the  burden  of  proof  should  be  made  easier  by  the  application  of  the  system  for 
identification  and registration  of bovine animals and  labelling of beef and beef products established by 
Council  Regulation  (RC) No 820/97  of  2 i April  1997 (OJ No L 1  17,  7.5.1997.  p.  1), which  has  been 
in force  since  I July  1997. 

retroactive  effect,  which  means  that  any  primary  agricultural  products  and  game 
placed  on the  market  before  that  date  will  not  be  covered  by  it,  even  if  damage  is 
discovered after  that date.  The Commission would point out, however, that this rule 
does not prevent  other  rules of  law on contractual  or non-contractual  liability  from 
being  applicable  to  such  products  put  into  circulation  before  the  date  in  question. 
This interpretation is consistent with Article  13 of the Directive, which preserves the 
rights of injured  persons under other such rules. 

Articles 3 and 4 

23.  These indicate the date on which the Directive enters into force,  in accordance with 
Article  191 of the Treaty, and the fact that it is addressed to the Member States. 

Proposal for a European Parliament and Council Directive amending Council Directive 
85/374/EEC of 25 July  1985 on the approximation of the laws, regulations and 
administrative provisions of the Member States concerning liability for  defective 
products 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN 
UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  100a thereof, 

I laving regard to the proposal from  the Commission,1 

Having regard to the opinion of the Economic and Social Committee,2 

Acting in accordance with the procedure laid down in Article  189b of the Treaty3, 

Whereas  the  safety  of  products  and  compensation  for  damage  caused  by  defective 
products  are  overriding  social  needs  which  must  be  met  within  the  internal  market,  an 
area  in  which  products  move  freely;  whereas  the  Community  has  responded  to  these 
requirements  by  means  of  Council  Directive  85/374/EEC4  and  Council  Directive 
92/59/EEC5 of 29 June  1992 on general product  safety; 

Whereas Directive 85/374/EEC established a fair apportionment of the risks inherent in a 
modern society in which there is a high degree of technicality; whereas the said Directive 
has  thus  struck  a  reasonable  balance  between  the  interests  involved,  in  particular  the 
protection  of  the  health  of  consumers,  the  incentive  for  innovation  and  scientific  and 
technological  development,  the  guarantee  of  undistorted  competition,  and  the  easing  of 
trade  by means of a system  of harmonised  civil  liability; whereas the  said  Directive  has 
thus  helped  to  raise  awareness  among  traders  of  the  issue  of  product  safety  and  the 
importance accorded to it; 

Whereas  the  degree  of  harmonisation  between  Member States'  laws  achieved  by  the 
Directive is not total in view of the derogations laid down, in particular with regard to its 
scope, from which unprocessed agricultural products are excluded; 

Whereas  the  Commission  monitors  the  implementation  and  effects  of  Directive 
85/374/EEC  and  in  particular  its  aspects  relating  to  consumer  protection  and  the 
functioning  of  the  internal  market;6  whereas,  in  this  context,  the  Commission  must,  in 
accordance with Article 21, present a second report on the application of the Directive; 

()J NoC  xxx, x.x.xxxx, p. x. 

1 
-  OJ No C xxx, x.x.xxxx, p. x. 
3  Kuropean Parliament readings and Council common position. 
4 
( ) J N o L 2 ! 0,  7.8.1985, p. 29. 
5  OJ No L 228,  I 1.8.1992, p. 24. 
() 

First report on the application of the Directive, COM(95) 617,  13.12.1995. 

10 

Whereas  including  primary  agricultural  products  within  the  scope  of  Directive 
85/374/EEC  would  help  restore  consumer  confidence  in  the  safety  of  agricultural 
products; where such a measure would meet the requirements of a high level of consumer 
protection; 

Whereas circumstances call for Directive 85/374/EEC to be amended in order to  facilitate 
the  payment  of  legitimate  compensation  for  any  damage  to  health  caused  by  defective 
agricultural products, to the benefit  of consumers; 

Whereas  this  Directive  has  an  impact  on  the  functioning  of  the  internal  market  in  that 
trade  in agricultural  products  will  no longer be affected  by differences  between  rules on 
producer liability; 

Where the principle of liability without fault  laid down in Directive 85/274/EEC must be 
extended to all types of product, including agricultural products as defined  by the second 
sentence of Article 38(1) of the Treaty and listed in Annex II to the said Treaty; 

Whereas,  in  accordance  with  the  principle  of  proportionality,  it  is  necessary  and 
appropriate  in order to achieve the fundamental  objectives  of increased protection  for  all 
consumers  and  the  proper  functioning  of  the  internal  market  to  include  agricultural 
products  within  the scope of Directive  85/374/EEC; whereas this Directive  is  limited  to 
what  is  necessary  to  achieve  the  objectives  pursued  in  accordance  with  the  third 
paragraph of Article 3b of the Treaty; 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 85/374/EEC is hereby amended as follows: 

1 ) 

Article 2 is replaced by the following  text: 

"Article 2 

For  the  purpose  of  this  Directive  "product"  means  all  movables  even  though 
incorporated  into  another  movable  or  into  an  immovable.  "Product"  includes 
electricity." 

2) 

In Article  15, paragraph  1(a) is deleted. 

Arikk 2 

\. 
Member States  shall  adopt  and  publish  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  by  1  January  1999.  They  shall 
forthwith  inform  the Commission  thereof.  They  shall apply  these provisions with  effect 
from  1  January  1999. 

When  the  Member  States  adopt  these  provisions,  the  latter  shall  contain  a  reference  to 
this  Directive  or  be  accompanied  by  such  reference  when  they  are  published  officially. 
The methods of making such reference  shall be laid down by the Member Stales. 

11 

Member States shall communicate to the Commission the text of the provisions of 

2. 
national law which they subsequently adopt in the field governed by this Directive. 

Article 3 

This Directive shall enter into force on the twentieth day following  its publication in the 
Official  Journal of the European Communities. 

This Directive is addressed to the Member States. 

Article 4 

Done at Brussels, 

For the European Parliament 

For the Council 

The President 

The President 

12 

Annex  A  : List referred  to in Article  38 of the EC  Treaty 

Chapter  1 
Chapter  2 
Chapter  3 
Chapter 4 
Chapter  5 

Live  animals 
Meat and edible meat  offal 
Fish, crustaceans  and  molluscs 
Dairy  produce; birds' eggs; natural  honey 

05.04  Guts,  bladders  and  stomachs  of  animals  (other  than  fish),  whole  and 
pieces  thereof 
05.15  Animal  products  not  elsewhere  specified  or  included;  dead  animals  of 
Chapter  1 or Chapter  3, unfit  for human  consumption 

Live  trees  and  other  plants;  bulbs,  roots  and  the  like;  cut  flowers  and 

Chapter  6 
ornamental  foliage 
Chapter  7 
Chapter  8 
Chapter  9 
Chapter  10 
Chapter  11 
Chapter  12 
industrial  and medical  plants; straw and  fodder 
Chapter  13 

Edible vegetables  and certain roots and  tubers 
Edible  fruit  and  nuts; peel of melons  or citrus  fruit 
Coffee,  tea and  spices, excluding  maté (heading No  09.03) 
Cereals 
Products  of the  milling  industry; malt  and  starches; gluten;  inulin 
Oil  seeds  and  oleaginous  fruit;  miscellaneous  grains,  seeds  and  fruit; 

ex  13.03  Pectin 

Chapter  15 

15.01  Lard and other rendered pig  fat;  rendered poultry  fat 
15.02  Unrendered  fats  of  bovine  cattle,  sheep  or  goats;  tallow  (including 
"premier jus") produced  from  those  fats 
15.03  Lard  stearin,  oleostearin  and tallow  stearin; lard oil, oleo-oil and  tallow  oil, 
not emulsified  or mixed  or prepared  in any  way 
15.04  Fats and  oil, offish  and marine mammals, whether  or not  refined 
15.07  vegetable  oils, fluid  or  solid, crude, refined  or  purified 
15.12  Animal  or  vegetable  fats  and  oils,  hydrogenated,  whether  or  not  refined, 
but not further  prepared 
15.13  Margarine,  imitation  lard and  other prepared  edible  fats 
15.17  Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  or 
vegetable  waxes 

Chapter  16 
Chapter  17 

Preparations  of meat, offish,  of crustaceans  or  molluscs 

17.01  Beet  sugar and cane  sugar,  solid 
17.02  Other  sugars;  sugar  syrups;  artificial  honey  (whether  or  not  mixed  with 
natural  honey);  caramel 
17.03  Molasses, whether or not  decolourised 
17.05  Flavoured  or  coloured  sugars,  syrups  and  molasses,  but  not  including  fruit 
juices  containing  added  sugar  in any  proportion 

Chapter  18 

18.01  Cocoa  beans, whole or  broken,  raw or  roasted 
18.02  Cocoa  shells,  husks, skins and  waste 

Chapter  20 
Chapter  22 

Preparations  of vegetables, fruit  or other parts of  plants 

22.04  Grape  must,  in  fermentation  or  with  fermentation  arrested  otherwise  than 
by  the addition  of  alcohol 

13 

22.05  Wine  of  fresh  grapes;  grape  must  with  fermentation  arrested  by  the 
addition of alcohol 
22.07  Other fermented  beverages (for example, cider, perry and mead) 
ex 22.08 and ex 22.09  Ethyl alcohol  or neutral  spirits, whether or not  denatured, 
of  any  strength,  obtained  from  agricultural  products  listed  in  Annex  II  to  the 
Treaty,  excluding  liqueurs  and  other  spirituous  beverages  and  compound 
alcoholic  preparations  (known  as "concentrated  extracts")  for  the manufacture  of 
beverages 
22.10  Vinegar and substitutes for vinegar 

Chapter 23 
Chapter 24 

Residues and waste from the food industries; prepared animal  fodder 

24.01  Unmanufactured  tobacco ; tobacco  refuse 

Chapter 45 

45.01  Natural cork, unworked, crushed, granulated or ground; waste cork 

Chapter 54 

54.01  Flax, raw or processed but not spun; flax tow and waste (including pulled 
or garnetted rags) 

Chapter 57 

57.01  True  hemp  (Cannabis  sativa),  raw  or  processed  but  not  spun;  tow  and 
waste of true hemp (including pulled or garnetted rags or ropes) 

14 

IMPACT  ASSESSMENT 

THE IMPACT OF THE PROPOSAL ON BUSINESS. WITH SPECIAL REFERENCE 
TO SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) 

Title of proposal:  Proposal  for  a European Parliament  and  Council  Directive  amending 
Council  Directive  85/374/EEC  of  25 July  1985  on  the  approximation  of  the  laws, 
regulations  and  administrative  provisions  of  the  Member States  concerning  liability  for 
defective  products 

The proposal: 

1.  Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation 

necessary in this area and what are its main aims? 

It is necessary  for  the purposes  of harmonising  at Community  level  civil  liability  for  all 
types of agricultural product, without exception.  It pursues the following  objectives: 

- 

- 

to  increase  the  level  of  consumer  protection  against  any  damage  to  their  health  and 
property caused by a defective product; 

to  improve  the  functioning  of  the  internal  market  by  raising  the  degree  of 
approximation  between  national  laws  on  product  liability  started  by  Directive 
85/374/EEC. 

These objectives  cannot  be met  satisfactorily  by the Member States and  may, in view of 
the  dimension  and  effects  of  the  proposed  measure,  therefore  be  better  achieved  at 
Community level on the basis of a directive. 

In addition, these  objectives form part of the strategic target of delivering a single market 
for the benefit  of all citizens, as envisaged  by the Commission  in its Action  Plan  for  the 
Single  Market  (CSE(97)1, 4.1.1997).  This  involves  enhancing  the  advantages  of  the 
single market by strengthening the guarantees offered  to consumers on the basis of a high 
level of protection in the fields of health and safety. 

The impact on business 

2.  Who will be affected  by the proposal? 

(a)  The sector  directly  affected  by the  proposal  is that  of the production  of  products  of 
the soil, of stock-farming  and of fisheries,  and that of game and  game products: this 
sector comprises  7 814 800  farms and accounted  for  5.3% of civilian  employment  in 
the fifteen  Member States in  1995.7 

The  distributive  trades  will  also  be  affected  in  that  Directive  85/374/EEC  provides 
for  liability  on  the  part  of  the  supplier  if  he  fails  to  indicate  the  identity  of  the 
In  addition,  any  importer  of 
producer  to  the  injured  person  (Article  3(3)). 

Source:  Kurostat,  data  included  in  The  Agricultural  Situation 
statistical  annex,  DG  VI.A.2. 

in  the  European  Union,  1996  Report, 

15 

agricultural  products  from  third  countries  will  be  affected 
85/374/EEC considers him liable as a producer. 

in  that  Directive 

(b)  The  size  of  businesses  affected  will  obviously  vary:  large  agricultural  enterprises 
exist  alongside  small and medium-sized  farms  which produce, supply  and  distribute 
agricultural products in their natural state. 

(c)  As for  its  geographical  scope, the proposal  will  not have  any  impact  whatsoever  in 
those  countries  in  which  agricultural  producers  are  already  subject  to  liability 
without  fault  under  Directive 85/374/EEC  (Greece,  Luxembourg,  Finland  and 
Sweden). 

3.  What measures will business have to take to comply with the proposal? 

The  businesses  concerned  will  not  have to  take  any  particular  measures  to  comply 
with  the proposed  provisions.  Since this proposal  supplements the existing  rules in 
force  concerning  safety  and  official  control  systems,  it  does  not  add  any  new 
constraint  in  this  regard.  This  is  because  businesses  are  already  subject  to 
Community  safety  and  quality  standards.  The  proposal  merely  penalises  any 
ignorance  as  to  these  rules  in  terms  of  civil  liability  for  damage  caused  to  third 
parties resulting  from  a safety  defect.  In this respect, the proposal  does not  require 
businesses  to  be  insured,  which  means  that  it  falls  within  the  competence  of  each 
Member State to determine whether or not this requirement should be laid down. 

4.  What economic effects  is the proposal likely to have? 

(a)  on employment: experience in those Member States which already  lay down  liability 
without  fault  on  the  part  of  agricultural  producers  shows  that  there  is  no  negative 
effect  (e.g. bankruptcies, redundancies, etc.) directly attributable to the existence of a 
system of liability without  fault. 

(b) on investment  and the creation of new businesses: the proposal  does not  impose any 
new  safety  standards  on  businesses  which  would  require  them  to  adapt  their 
production  and  be  costly  in  terms  of  investment.  While  the  Directive  does  not 
require them to take out  insurance, it is highly  likely  that many  of them  will  do so. 
This  is  why  the  proposal  will  probably  give  rise  to  indirect  costs  for  businesses. 
Nevertheless, in view of the need to ensure the safety  of agricultural products on the 
market for reasons of public health, the Commission considers that the advantages of 
this proposal significantly  outweigh any costs. 

(c) on the competitive position of businesses: the measure will have a beneficial  effect  on 
the  competitive  position  of  businesses.  It  will  help  boost  consumer  confidence  in 
agricultural  production  and  to enhance  undistorted  conditions  of competition  within 
the internal  market.  The proposal  means that all  businesses  in the sectors concerned 
will  be  subject  to  the  same  level  of  liability,  irrespective  of  the  national  market  on 
which  products  arc  introduced.  At  present,  products  placed  on  the  Greek, 
Luxembourg,  Finnish  and  Swedish  markets  are  covered  by  liability  without  fault, 
and  this  fact  gives  rise  to  unequal  conditions  of  competition  within  the  European 
Union. 

16 

5.  Does  the  proposal  contain  measures  to take  account  of the  specific  situation  of 

small and medium-sized  firms (reduced or different  requirements, etc.)? 

The proposal  is not particularly  aimed  at small  and  medium-sized  firms.  However, 
Directive  85/374/EEC  takes  account  of  the  impact  which  a  system  of  liability 
without  fault  has  for  businesses  in  general,  including  SMEs, by  establishing  a  fair 
distribution  of risks  between  the producer  and  the  injured  person.  This  means,  for 
example,  that  the  financial  impact  of  including  primary  products  is  in  any  case 
reduced  by  the  deduction  of  ECU 500  in the  case  of  material  damage  and  the  fact 
that the burden of proof rests with the injured  person, who must assess whether  it is 
worth initiating legal proceedings against the business. 

6.  Consultation 

this  proposal, 

the 
In  preparing 
recommendation  of  the  European  Parliament  that  Community  product  liability 
legislation be amended in order to extend its scope to primary agricultural products. 

the  Commission  has 

taken  account  of 

The Commission has adopted this proposal in time to meet the deadline laid down by 
Parliament (September  1997), which does not allow prior consultation to take place. 

17 

ISSN 0254-1475 

COM(97) 478 final 

DOCUMENTS 

EN 

10  06 

Catalogue number  :  CB-CO-97-490-EN-C 

ISBN 92-78-25051-1 

Office  for Official  Publications of the European Communities 

1.-2985 Luxembourg 

IS