Legal Alert: Law Commission announces review of the UK’s product liability regime

A long overdue modernisation of the UK’s product liability regime is on the horizon. 

As part of its 14th Programme of Law Reform, the Law Commission has launched a review of the decades-old regime that is intended to give consumers a clear route to claiming compensation for certain harms caused by defective products. The purpose of the review is to determine what reform might be required to ensure that the regime is ‘fit for purpose’, especially in the context of new technologies and the prevalent use of digital products.

Why is reform needed?

The UK’s current product liability regime is governed by the Consumer Protection Act 1987 (the “CPA”), which implemented the EU Product Liability Directive (85/374/EEC). The CPA established a strict liability framework under which: (a) producers can be liable for certain types of damage caused by defective products; and (b) claimants do not need to show any negligence or fault on the part of the producer (only the presence of a defect and a causal link between the defect and the damage suffered). This strict liability route sits alongside the ability of claimants to bring claims in contract and tort.

However, the landscape has transformed dramatically since the 1980s. The CPA was drafted to address damage caused by physical products. It has not kept pace with the advancement of emerging technologies, the different ways in which products are supplied to consumers, and the new threats which modern products can pose, including:

• Digital technology, such as software, smart or other connected products (together with ‘apps’ used on such devices), digital content, artificial intelligence (AI), and autonomous or automated systems;

• The use of new supply models for products, including online marketplaces and aggregator platforms; and

• The risk of cybersecurity threats, including unauthorised access or the hijacking of products/devices and data breaches.

The EU has responded to such developments through the revised Product Liability Directive (2024/2853/EU) (the “PLD”) which must be implemented into national laws by EU Member States by 9 December 2026. That revised PLD will introduce significant changes to the liability regime for businesses operating within the EU. For example:

1. software, AI systems, digital manufacturing files and digital services (that are integrated into or interconnected with a physical product) are within the PLD’s scope; and

2. liability can extend beyond traditional manufacturers to include software developers, producers of digital services that affect a product, fulfilment service providers (e.g. those operators involved in the packaging, storage and shipping of products, especially where the manufacturer is based outside of the EU) and (under certain conditions) online platform providers.

For the UK, the Law Commission has expressed concern that – given the CPA is a significant safeguard of consumer protection – it must be capable of application with respect to technological advances. There is also a balance to be struck: while consumers require protection from harm caused by defective products, any reforms should not stifle innovation and growth for businesses.

What will the review cover?

The review will address the following legal issues:

1. Definition of “product”: whether the CPA’s definition of a ‘product’ should expressly include software, whether supplied via a tangible or intangible medium. It will also be important for the Law Commission to consider the inclusion of ‘digital manufacturing files’ (i.e. digital content that is used to produce a physical product, such as computer-aided design files used in 3D printing and digital instructions for automated manufacturing processes) and interconnected products (e.g. tangible products that are digitally linked to other items such as smart thermostats connected to a boiler or home automation hubs which control multiple appliances).

2. Definition of “defect”: at present, a product is ‘defective’ if it does not meet the safety standards that persons are generally entitled to expect (including in the context of the risk of death, personal injury and property damage). In determining what persons are generally entitled to expect, various factors can be taken into account including the manner in which the product is marketed, its instructions for use, any attached warnings and what might reasonably be expected to be done with the product. In addressing the impact of new technologies, it is expected that the Law Commission will consider:

• whether a ‘defect’ can apply to software, firmware and AI systems that are embedded in physical products. Linked to that, should autonomous decision-making errors or algorithmic bias be considered as defects?

• how post-sale activities, such as remote support updates, security patches and functionality changes, should be factored into the assessment of defectiveness.

• whether a product should be considered defective if it malfunctions due to poor interoperability with another device and, if so, how should liability be allocated when multiple components interact?

3. The scope of damage: under the CPA, claimants can recover damages for death, personal injury and loss to non-commercial (or private) property. It will need to be considered whether damage should be extended to include pure economic loss, data loss and potentially psychological harm.

4. The ten-year ‘long-stop’ liability period: under the CPA, there is a long-stop date of 10 years (from the date a product was first put into circulation) during which claims must be brought, which is designed to cater for cases involving latent harm. The issue is whether that period should be extended given that certain products can be upgraded or updated iteratively throughout their lifecycle (e.g. via software updates). 

5. Difficulties for claimants in pursuing claims: it has been recognised that claimants might face significant challenges when making claims involving highly technical and opaque technology such as AI. Specifically, technical or scientific complexity could mean that claimants will struggle to meet the burden of proof for defectiveness or causation. The Law Commission will likely consider the approach taken by the EU under the PLD, including that:

• a product is presumed to be defective where a defendant fails to disclose requested evidence, where the claimant shows that the product is contrary to mandatory safety requirements, or where the claimant proves that the damage was caused by an obvious malfunction during reasonably foreseeable use; and

• where it is excessively difficult to prove a defect or causation, it is sufficient to show that it is ‘likely’ that the product is defective or contributed to the damage.

6. ‘State of the art’ defence: this defence currently allows producers to escape liability if the defect was undiscoverable in view of the scientific and technical knowledge available at the relevant time. The review will consider whether this defence needs to be modified to account for products that evolve via continuous updates.

Although this review is currently at an early stage, future reform will have significant implications for businesses involved in the development, manufacture, production and distribution of products, not least in terms of facing greater exposure to liability claims. 

What are the next steps?

The Law Commission is currently determining the scope of its work, including agreeing terms of reference with the UK Government. As part of that, it has invited stakeholders to provide their views on what the review should focus on. Following that, it is expect that it will publish a consultation paper (most likely in 2026) containing its initial proposals for reform.

We will continue to monitor the review’s progress and will provide a detailed update once a consultation paper is published. 

If you have any questions or queries concerning this topic or product liability more generally, please do not hesitate to contact us.

To be added to the Law Commission’s mailing list for updates about the project, email productliability@lawcommission.gov.uk

(With thanks to Sonny Slinger (Trainee, Dispute Resolution) for assisting in preparing this article).