The product damage regulation changes in the Civil Code

The product damage regulation changes in the Civil Code

Product damage occurs when, for example, a gas cylinder explodes and causes serious head injuries, or when a faulty part in a motor vehicle causes a fire that damages the garage. According to an approved bill, the provisions of the Civil Code relating to product damage will be amended with the effect from 9 December 2026. In this article, we present the key elements of the amendment.<br>

What is product damage?

It should be noted that product damage does not mean that compensation can be claimed solely because of a defective product. Product damage occurs when a defect in the product causes personal injury or other damage – for example, if a washing machine is defective, then there is no product damage due to the manufacturing defect itself, but if the washing machine leaks water due to the manufacturing defect and this causes damage to the parquet flooring, then compensation can be claimed for the damage to the parquet flooring.<br>One type of product damage is personal injury. This includes death, physical injury, damage to health, and mental health damage is a new addition.<br><br>Another type of product damage is damage caused to other objects. The innovation broadens the scope of the injured party's claim, as the amount of damage no longer has to exceed EUR 500. It should be noted that objects used for business purposes, such as a self-employed person's work laptop, are not covered by product damage. <br><br>A new addition is that product damage also covers damage to data, unless the data is used for business purposes. In the case of damage to software, free and open source software that has not been developed or made available in the course of commercial activities is exempt from product damage.<br><br>Who can be the injured party?<br><br>It is important that only natural persons can claim compensation for product damage. In the case of companies, the general rules on compensation apply.<br><br>Who is liable for product damage?<br><br>What is special about product damage is that it allows the injured party to take action directly against the manufacturer rather than the seller. Please note that there are cases where parties other than the manufacturer are liable.<br><br>The amendment does not change the fact that both the component manufacturer and the importer may be liable for product damage. In addition, the distributor may also be liable if it fails to identify the manufacturer of the product to the injured party. The amendment extends the scope of those who may be held liable. <br><br>A new addition is that a company authorised by a manufacturer based outside the EU and, in certain cases, the logistics service provider may also be held liable. Another new addition is that a company that significantly modifies a product without the manufacturer's control and thus places it on the market may also be liable.<br><br>The new regulation extends liability to website operators through whose websites consumers can order products from another trader.<br><br>Manufacturers must take into account that if they incorporate software developed by another person into their product and the software proves to be defective, they cannot claim compensation from the developer if the developer is a micro or small enterprise.<br><br>Who has to prove it?<br><br>The injured party has a broad burden of proof. For example, if a faulty phone catches fire while charging and burns down the nightstand, the following must be proven. That the phone is defective, that the nightstand burned down, the extent of the damage to the nightstand, and that the nightstand burned down because the defective phone caught fire.<br><br>If the injured party has proven these points, the company must prove that there are circumstances that exempt it from liability. For example, that the defect was probably not present when the product was placed on the market, or that the defect was not detectable at the time of placing the product on the market according to scientific and technical knowledge.<br><br>The amendment introduces a new element, namely the presumption of product defect, i.e. in certain cases, the product must be considered defective until proven otherwise. <br><br>For example, the presumption applies if, in a lawsuit, the court calls on the business to send substantive evidence to the injured party and the business fails to comply with this request. In addition, if the injured party successfully proves that the product does not meet product safety requirements, the defect in the product must also be presumed. The presumption also applies if it is extremely difficult for the injured party to prove the defect in the product (e.g. for technical reasons), but they can at least make the defect in the product probable.<br><br>What is the time limit for asserting a claim?<br><br>Claims for compensation for product damage can be made by the injured party within 3 years. This time limit shall be calculated from the date on which the injured party became aware or could have become aware of the damage, the product defect and the company against which action can be taken.<br><br>If 10 years have elapsed since the product was placed on the market, as a general rule, it is no longer possible to make a claim against the company for product damage. This rule has been supplemented to allow claims to be made within 25 years instead of 10 years if the injured party was unable to initiate proceedings due to the latent nature of the personal injury.<br><br>In summary, the amendment to the Civil Code extends the scope of liability, so that logistics service providers, manufacturers' agents and website operators can now also be held liable. The injured party must still prove the defect in the product, but the new regulation makes it easier for the injured party to prove their case by introducing a presumption of product defect. Another addition that is favourable to injured parties is that claims can be asserted even after 25 years have passed due to the latent nature of the personal injury.<br><br>If you have any questions regarding product damage, please do not hesitate to contact the professional team at act legal Hungary.