Product Liability and Warranty Litigation in Ukraine

In Ukraine there are three primary legal grounds for bringing product liability claims.

Firstly, under the Law of Ukraine “On Liability for Damage Caused by a Defect in a Product” (Product Liability Law), producers or importers bear strict liability, meaning they are liable for damage caused by a defective product regardless of their fault. To establish liability under the Product Liability Law, the claimant shall prove that damage occurred, that the product was defective, and that there is a causal link between the defect and the damage. 

Secondly, claimants may rely on the general tort liability provisions under the Civil Code of Ukraine (CCU). Unlike the Product Liability Law, tort liability under article 1166 of the CCU requires the presence of fault (negligence or intent) of the defendant in causing the damage. It is presumed that there is the defendant’s fault and the defendant is released from liability if he/she proves that the damage was not caused by his/her fault. Liability under tort law may encompass personal injury, property damage, moral damage, and economic loss directly resulting from a defective product.

Lastly, product liability claims can also be based on contractual warranty provisions under the CCU (articles 675, 678, 679). Contractual liability typically involves strict liability, meaning that the seller is liable if the product does not conform to the agreed-upon specifications at the time of delivery, irrespective of fault. This strict liability applies in particular to claims for cure (repair or replacement), reimbursement of expenses incurred in remedying defects, price reduction, and termination, which do not require the buyer to prove any negligence or intent on the part of the seller. Claims based on contractual warranties may be brought, at the buyer’s discretion, against either the producer or the seller (if the seller is not the producer).

Provisions similar to the CCU’s warranty rules are also contained in the Law of Ukraine “On the Protection of Consumer Rights” (the Consumer Protection Law). The principal distinction is that the Consumer Protection Law applies exclusively to products purchased by individuals for non-business purposes, whereas the CCU governs all purchases, including business-related transactions.

According to article 1 of the Product Liability Law, a "product" is broadly defined as “any movable property, including finished products, raw materials and component parts, including property that is part of other movable or immovable property, as well as electricity”. Thus, the term product refers to any movable property, regardless of whether it is a finished product, a component, or raw material and explicitly includes electricity as well. 

The CCU (article 190) defines property as a specific item, a collection of items, as well as property rights and obligations. It also defines digital item that is an asset that is created and exists exclusively in a digital environment and has property value; digital items include virtual assets, digital content, and other assets to which the provisions mentioned above apply. The concept of “digital content” is defined by Law of Ukraine “On digital content and digital services” (Digital Content Law) and includes software as well. Thus, the provisions of the Product Liability Law are applicable also to damages caused by intangible products, e.g. software.

Under the warranty provisions of the CCU (article 656), a "product" (goods) is defined as property which the seller has at the time of concluding the contract or will be created (purchased, acquired) by the seller in the future. Based on this definition and provisions mentioned above, software (as a digital item) is likewise considered a product. The Digital Content Law regulates the warranty obligations of producers toward consumers (i.e. individuals that purchase software for personal use not related to business activities), and its principles are generally align with those set out in the CCU.

As it can be seen form the above, Ukrainian law generally does not establish a fundamental distinction between consumer and business products in terms of the definition of a product itself. Nevertheless, significant differences arise in the application of consumer protection and warranty provisions. Consumers are granted broader statutory protections and mandatory rights, such as restrictions on limiting or excluding liability, whereas in B2B-transactions, parties generally enjoy greater contractual freedom, including the option to deviate from statutory warranty rules through individual agreements.

Claims under the Product Liability Law can be pursued by any individual or legal entity that has suffered damage as a result of a defective product. This includes direct victims who experienced personal injury or property damage, as well as indirect victims who suffered losses due to such incidents.

Claims may also be pursued on behalf of deceased individuals. In this regard the Product Liability Law refers to the general tort provisions of the CCU.

According to the general provisions of the CCU, the heirs of a deceased victim can bring a product liability claim to recover damages for losses incurred by the deceased prior to death, including material and moral damages. Additionally, according to article 1200 of the CCU, individuals financially dependent on the deceased (e.g. family members or dependents) may claim compensation for economic loss due to the victim's death.

Contractual claims under warranty provisions may typically be pursued by the original contracting party or their legal successors, including heirs. 

The Product Liability Law provides for compensation in cases of personal injury, other damage to health or death of a person, damage to or destruction of any property, except for the defective product itself. This includes reimbursement for medical expenses, loss of earnings, and compensation for material and moral damages. In the event of death, the law also allows for claims covering funeral costs and support for dependents. 

Under the general tort provisions of the CCU, claimants can seek compensation for both material and non-material damages resulting from a defective product. This includes direct losses, loss of income, property damage, and moral damages.

Contractual claims focus on the seller's liability for delivering a defective product. Remedies include repair, replacement, price reduction, compensation (if repair is made by customer) or contract termination. 

Under Ukrainian law, the definition of a “defective” product and the evidentiary requirements to prove a defect vary depending on whether the claim is based on strict liability under the Product Liability Law, fault-based tort law, or contractual warranty under the CCU.

According to the Product Liability Law (article 5) a product is considered defective if it does not meet the level of safety that the buyer has the right to expect based on all circumstances, in particular those related to the design, manufacture, circulation, transport, storage, installation, maintenance, consumption, use, destruction (disposal, recycling) of this product. Importantly, a product is not defective merely because a better or newer version is available on the market.

To succeed with a claim under the Product Liability Law, the claimant shall prove that (1) there is a damage, (2) the product was defective as defined above, and (3) there is a causal link between the defect and the damage. Fault is not required.

In tort law under the CCU, the concept of defect is tied to unlawful decisions, actions or inaction of the producer and usually follows similar substantive standards to those under the Product Liability Law. In this case, claimants shall prove the same elements as in the cases under the Product Liability Law, mentioned above, but the fault is also required. However, the burden of proof lies on the producer, that is obliged to prove absence of fault to be released from liability.

Under contractual warranty law, a product is defective if it lacks the agreed-upon characteristics or fails to meet the purpose for which product of this kind are normally used. This includes the product's suitability for its intended use, compliance with public statements, and adherence to expected quality and durability. In B2C sales, the law prescribes that the claim on repair may be filed by consumer during the established service life of the product (outside the warranty term) if defect was made due to producer’s fault.

In the cases filed in accordance with the Product Liability Law the claimant bears the burden of proof for the existence of a defect, the damage suffered, and the causal link between the two. As mentioned above, in this case the fault is not necessary to hold the producer liable.

Similar to the above, in tort claims under the CCU the burden is on the claimant to prove the existence of a defect, the damage suffered, and the causal link between the defect and the damage. In these cases, however, the producer’s fault shall also be in place, but it is the producer that shall prove the absence of the fault to be released from liability.

In the mentioned cases the burden of proof is regulated by law and cannot be reversed.

In the context of contractual warranty claims, the general rule under the CCU is that buyers shall prove that a defect existed at delivery or was caused by the reasons that existed prior to delivery. However, in B2C cases the Supreme Court stated that the consumer shall only prove the existence of defect, while the producer bears the burden of proof for the reasons of the defect. The buyer is entitled to object the conclusions made by the producer.

Similar to the Product Liability Law the burden of proof in B2C contracts is envisaged by the law and cannot be reversed. At the same time, in B2B contracts, the principle of contractual freedom generally allows the parties to agree on clauses that alter the statutory burden of proof. For example, they may agree on distributing risks related to the product at their own discretion and the court will refer to the provisions of the contract, unless they violate mandatory provisions of the law.

While assessing whether a product is “defective”, Ukrainian courts consider whether the product’s quality meets the requirements of regulatory legal acts, the terms of contracts or the requirements imposed on it, as well as information about the product provided by the producer (seller). The relevant legislative provisions in the Product Liability Law, the CCU and the Consumer Protection Law are largely aligned.

Breaches of safety standards are specifically mentioned in article 5 of the Product Liability Law. The key criterion is whether the product fails to provide the level of safety that the general public is entitled to expect, taking all circumstances into account. Relevant factors include the presentation of the product (such as its appearance, composition, packaging, marking, instructions, etc.), its reasonably foreseeable use, and the time when the product was put into circulation. Courts will assess whether the risk posed by the product exceeds what a user could reasonably expect, considering normal handling and foreseeable misuse. Importantly, a product is not deemed defective solely because a safer or more advanced version was later introduced.

Both the Consumer Protection Law and the CCU refer to regulatory requirements (and, in the case of the Consumer Protection Law, safety standards also) as a key condition for a product to meet quality expectations. Accordingly, a breach of these regulatory requirements would qualify the product as “defective,” and the court shall assess the existence and relevance of such breaches.

In accordance with Ukrainian legislation, different entities within the product supply chain can be held liable for defects, depending on the legal basis of the claim. Liability may arise under the Product Liability Law, tort law under the CCU, contractual provisions under the CCU or the Consumer Protection Law.

Under article 7 of the Product Liability Law primary liability falls on the producer of the defective product. According to the law the term “producer” is treated widely and includes not only the actual producer of the final product but also (1) raw, component and parts producers, (2) anyone who present himself as the producer by branding or labelling the product as his own, as well as (3) importers of the product in Ukraine.

Suppliers or distributors may also be liable, if the actual producer cannot be identified and a supplier fail to name the producer or previous supplier within 30 days upon customer’s request.

According to the general provisions of the tort law, damage shall be compensated in full by the person who caused it. Thus, potentially, any party in the supply chain that breaches a duty of care and thereby causes damage may be liable. This could include producers, suppliers, wholesalers, or retailers. In these cases, liability depends on the fault of a person that caused damage.

In contractual and consumer relationships, the claims related to defect products may be filed either against the seller or against producer (importer) of the products.

If multiple parties are responsible for damage caused by a defective product liability is apportioned depending on the grounds of the claim.

According to article 8 of the Product Liability Law if several persons may be liable for the same damage, the claimant has the right to claim compensation for the damage from all such persons or from any of them separately. In this case, the provisions of civil law on partial liability for damage and on the right of recourse (regress) against the guilty person may be applied.

In consumer relationships the producer (importer) is ultimately liable and is obliged to compensate all losses incurred by the seller, that considers the consumer's claim regarding the defected product.

As previously mentioned according to the general provisions of the tort law, damage shall be compensated in full by the person who caused it. However, it is also envisaged that a person that has compensated for damage caused by another person has the right to a recourse claim against the guilty person in the amount of the compensation paid, unless another amount is established by law. Thus, the court may apportion the liability depending on causation and fault between different parties within the supply chain.

In contractual warranty cases, the seller is primarily liable to the buyer, even if the defect stems from a third party (e.g., the producer). However, the seller may pursue recourse claims against upstream suppliers or producers in accordance with the provisions of the CCU, assuming statutory or contractual conditions are met.

Under the Product Liability Law, the producer shall not be liable and shall be exempt from compensation for damages if any of the following circumstances are proven to exist:

• the producer did not put the product into circulation;
• the defect that caused the damage arose after the producer put the product into circulation, except in cases where the defect was caused by the design or composition of the product;
• the product was manufactured or distributed by the producer outside the course of its economic activity;
• the defect in the product arose as a result of the producer's compliance with the requirements of legislation or the fulfilment of mandatory requirements of state authorities;
• in the case of component producers: that the defect was caused by the design of the finished product or instructions issued by the producer of the final product.

In tort claims under the CCU, defendants may defend themselves by proving the absence of fault (i.e., that all due care was taken in product design, production, instructions, and post-market surveillance). If the damage was caused by intent or gross negligence of the claimant, this may either exclude liability or lead to its reduction (article 1193 of the CCU).

Under the Consumer Protection Law the seller, produce may defend themselves by proving that the defects in the goods arose as a result of the consumer's violation of the rules for use or storage of the goods.

In contractual cases, the seller may avoid liability if the customer fails to prove that the defect existed at the time of delivery or for reasons that existed prior to that moment. If the claim is filed within the warranty period, the burden of proof shifts to the seller to prove that the defect arose after transfer of product to the customer, as a result of the customer's violation of the rules for use or storage of the product, actions of third parties, accident or force majeure.

Under the laws of Ukraine, the ability to limit or exclude liability for product defects depends on the legal basis of the claim and the parties involved. While contractual limitation clauses are generally permitted in B2B transactions, there are statutory restrictions in consumer protection and strict liability contexts.

If the case is brought under the Product Liability Law, liability cannot be contractually excluded or limited. This is explicitly prohibited by article 9 of the Product Liability Law.

Provisions of the tort law, envisaged in the CCU do not provide for possibility for limiting or excluding of the liability for the damage caused by defect product, thus under general rule it is not allowed.

According to the Consumer Protection Law contractual clauses related to exemption or limitation of the legal liability of the seller (producer) in the event of death or damage to the health of the consumer caused by the actions or inaction of the seller (producer) are considered unfair and may be acknowledged invalid by the court on that basis.

In contractual warranty claims, parties are free to establish liability in the individually agreed contracts unless it contradicts strict provisions of the law. Parties may reduce available remedies, shorten warranty periods or exclude warranty rights entirely. 

Under Ukrainian law the general limitation period of three years is applicable in most cases related to product liability claims. The only exception is contractual warranty claim to which a shortened limitation period of one year is applied. The limitation period remains the same in cases involving death or personal injury.

According to the law the limitation period begins on the day when the person became aware or could have become aware of the violation of his/her rights or of the person who violated them. Thus, in practice the claim may be filed and considered beyond the standard limitation period if the claimant substantiates that he/she did not know and could not have known about the violation of the rights or the person that violated them.

Yes, product liability claims in Ukraine often involve implied contractual warranties, particularly in the context of contracts governed by the CCU and the Consumer Protection Law. These implied warranties form a key part of the buyer’s protection when a product turns out to be defective and supplement or overlap with claims under tort law or the Product Liability Law.

In accordance with article 673 of the CCU, the seller is obligated to deliver a product which quality complies with the terms of the sale contract, and if quality requirements are not defined, a product suitable for the purpose for which products of that kind are normally used. In addition to that if the law establishes requirements for the quality of product, the seller is obliged to transfer product that meets these requirements. Under the law the seller and buyer are allowed to agree on the transfer of product of higher quality than the requirements established by law, but the law does not provide for possibility to lower the quality of the product.

In addition to the mentioned provision of the CCU, the Consumer Protection Law establishes that the producer is obliged to ensure that the product is used for its intended purpose throughout its service life, as stipulated by regulatory legislation or as agreed with the consumer, and in the absence of such a term, for a period of ten years.

According to the CCU if a product is defective (regardless of whether it can be used for its intended purpose), the buyer is entitled to demand from the seller:

• a proportional reduction in price;
• free repair of the product within a reasonable period of time;
• reimbursement of the costs of repairing the product.

If the defect of the product is significant (cannot be repaired; the repair would require inappropriate expenses or time; the defect arose repeatedly or after the repair) the buyer is entitled to:

• withdraw from the contract and demand a refund of the amount paid for the product;
• demand replacement of the product.

In addition to the mentioned remedies the Consumer Protection Law envisages that (1) the delivery of bulky products and products weighing more than five kilograms shall be done at the seller’s cost, (2) the repair shall be performed within fourteen days from the date of submission or within another period agreed upon by the parties, and (3) upon written request of the consumer, for the duration of the repair, the consumer shall be provided (with delivery) with a product of a similar brand (model, article, modification).

Damages caused by the defect product may also be claimed under relevant provisions of the Product Liability Law or general provisions of the tort law.

No, punitive damages are not recognised under Ukrainian law.

The CCU follows the principle of full compensation with the main aim to restore the injured party to the position it would have been in had the contract been properly fulfilled. Damages are limited to actual, measurable losses - either material (e.g., repair costs, lost profits, damages caused to the assets of the injured party) or non-material (e.g., pain and suffering in personal injury cases).

There are no specific rules governing document disclosure in product liability litigation, thus the general rules of procedure regulating evidence apply.

A party in the product liability case shall disclose the documents on which it relies. The party is free to not disclose documents that adversely affect a party's own case or support the other party's case. At the same time, parties in the case are entitled to seek a court order compelling any person possessing documents, material to the case, to disclose them to the court.

Class actions lawsuits are not expressly regulated in Ukraine. The law only provides that several claimants can jointly file a lawsuit on the condition that (a) the subject-matter of the dispute concerns joint rights or obligations of several claimants, and such rights and obligations are sufficiently similar; and (b) the rights and obligations of several claimants arose out of the same grounds. Nevertheless, each claimant acts independently in such court proceedings. 

Collective action can also be arranged through consolidation of different lawsuits which have been filed with the court separately. If the claims are filed separately but are interrelated because of the grounds of the case or the evidence provided, the court may consolidate these lawsuits into one proceeding following the motion of any party or at the court’s discretion.

Consolidation of cases is allowed before the preparatory hearing in the case or, in case of the summary proceeding, prior to the commencement of the court hearing on the merits. The law prohibits consolidation of different lawsuits that shall be considered in different proceedings or are subject to the exclusive jurisdiction of different courts.

Usually, the claimant pays the court fee related to filing a claim and cover the expenses for attorneys. There are certain exemptions to this rule, e.g., the claimants are released from paying the court fee for submitting the claims under the Consumer Protection Law.

Litigation funding is not specifically regulated in Ukrainian legislation, but there is no prohibition on third parties financing litigation. However, third party financing is presently uncommon in Ukraine.

According to Ukrainian procedural legislation litigation costs are allocated between the parties on a pro rata basis depending on their success with the claim. I.e., a successful party will be awarded its legal costs proportionally to the amount of satisfied claims, while a party that succeeded in defending some aspects of its case will be awarded a pro rata portion of its costs.

At the same time, the court has a wide discretion to decide on the on the amount of legal costs to be reimbursed by a losing party. When awarding such costs, the judge will assess whether the claimed fees were incurred in relation to a particular dispute, whether the costs are justifiable and proportionate to the value of claim etc. Usually, the courts do not satisfy the full amount of the legal fees incurred and award compensation at their discretion.

Contingency fee agreements are not explicitly prohibited in Ukraine. Generally, a client and an attorney (or law firm) are free to agree on the amount and structure of legal fees including arranging a contingency fee clause. However, the approach to the compensation of the legal fees mentioned above is also applicable in this case.

As we previously mentioned, class actions are not available in Ukraine, Consequently, each case is considered individually and typically does not attract significant media attention.

Ukrainian parliament has passed new Consumer Protection Law that was signed by the President and published in July 2023. According to this law it should have entered into force one year after its publication but not earlier than the end of the martial law. Given the ongoing war, the law has not yet come into force.

This law will significantly reshape relationships in the field of consumer protection and address issues related to emerging technologies. In particular, the new law:

• regulates matters related to electronic commerce (i.e., purchasing products via online stores);
• provides definitions to terms ‘digital service’ and ‘digital content’;
• amends provisions concerning warranty obligations and product defects.

Moreover, as Ukraine continues on its path toward EU accession, it is required to align its legislation with the EU acquis, including in the area of product safety and liability. Therefore, in light of the new EU Product Liability Directive (Directive (EU) 2024/2853), which aims to modernize the existing framework to address the complexities introduced by digitalisation and AI, further legislative initiatives aimed at harmonising Ukrainian law with EU regulations are expected.