Risk Regulation through Liability Allocation: Transnational Product Liability and the Role of Certification

This article studies the recent European developments concerning product liability in the aviation domain. Particularly the landmark judgment in Überlingen Manufacturers provided new insights on the definition of product defects (manufacturing, design and warning defects) and the availability of liability defences (state of the art defence and regulatory compliance). The article finds that the judgment both enhances manufacturers’ liability risks, by providing a wide interpretation of product defects, and limits the risk by accepting the regulatory compliance defence for technologies certified to a mandatory standard. The article compares US and EU product liability law, concluding that the outcome of the case would likely have been similar under both regimes. The article highlights that product liability must be considered beyond individual cases, as an element of systemic risk regulation. This necessitates that the link between ownership of design choices, mandatory certification and legal liability be addressed more purposefully. The article identifies that currently the regulatory compliance defence may create a legal gap in this respect: standard-setters and certifiers are responsible for product design choices, but cannot be held legally accountable through liability. The article concludes with suggestions for adapting the legal framework to improve liability allocation through product liability.