The future of UK Product Liability: More Products. More Defendants. More Risk?

The Consultation comes at a time of wider change in the product liability sphere, following three UK government consultations launched earlier this year (see UK Product Safety Reform: New Rules, New Risks) and the impending deadline across the EU for transposition of the new EU Product Liability Directive (the “New PLD”) (see Same Rules; Different Routes - How Europe is rewriting Product Liability).

The proposals in the Consultation will feel very familiar to any businesses already preparing for the impact of changes to the PLD in EU markets, as they seek to extend the scope of the product liability regime beyond physical products, but the Consultation is not a simple rewriting of the New PLD.

In this briefing we will look at what the proposals in the Consultation would mean for UK businesses, if adopted.

Why now?

The UK’s product liability regime is currently governed by the CPA, which came into force in 1988 to implement the 1985 EU Product Liability Directive (the “Old Regime”). It imposes strict liability, so claimants do not need to prove negligence or fault on the part of the producer, and is balanced by a set of defences and a ten-year long-stop. It is widely accepted that the Old Regime was designed for physical goods and has not kept pace with changes over the past 40 years with respect to software, AI, connected products or online marketplaces.

As the EU seeks to update its rules and regulations around product liability, so the Law Commission appears to want to keep pace. Since the UK is no longer a member of the EU, it is not required to adopt the New PLD. However, the Law Commission uses the New PLD as a reference point, perhaps logically since many UK businesses will need to comply with the New PLD anyway if they operate in the EU marketplace.

The proposed extension of liability to fulfilment providers, inclusion of software and AI and wider categories of recoverable damage in the Consultation are similar to the New PLD. However, the Consultation diverges from the New PLD in several important respects, including consideration of extending strict liability to social media and other online platforms and proposing a new mechanism to ease evidential burdens. Existing defences would be retained and updated, and, as with the New PLD, the 10-year long-stop period would reset following substantial modification and would be extended to 25 years for latent personal injury claims.

The Consultation will not change the law in the UK – so why should UK businesses be concerned?

Whilst the New PLD will apply to products put on the EU market after 9 December 2026, the UK will keep its current law until any reform becomes legally binding. The outcome of the government consultation on the UK’s proposed reform to the General Product Safety Regulation 2005, which closed in June, is still awaited. The final recommendations from this consultation are not expected until late 2027.

So for at least a year and potentially far longer, producers of the same product may face claims based on different rules in the UK compared to across the EU. But this Consultation also provides a valuable opportunity for UK businesses to engage with policy makers and legislators and have their say in shaping the future UK law governing product liability claims.

The key proposals in the Consultation

1. A broader definition of ‘Product’

• Software and AI systems would be products in their own right, however they are supplied: embedded, downloaded or accessed remotely.
• Going a step further than the New PLD, the Consultation proposes that the design components and features of social media and other online platforms, for example recommender algorithms, infinite scroll, autoplay and notifications, would also be products under the proposals, which focus on the design and operation of platforms, rather than liability arising from user-generated content itself.
• A residual category would cover anything else designed or developed to perform a specific function for users. Digital manufacturing files would be included, while pure information and services would stay outside the regime.
• Products made available free of charge but monetised through other means, such as advertising or user data, would count as being “supplied”.

2. More defendants

The Consultation widens the categories of parties that would be able to be sued:

• The definition of “producer” would extend to developers.
• Three new categories of defendant are proposed: fulfilment service providers, “Core Participants”, designed to capture online marketplaces and similar operators, and UK authorised representatives of overseas businesses.
• Fulfilment service providers and Core Participants would be “fall-back” defendants. In other words, where a consumer is not able to identify a UK producer, own-brander, importer or UK authorised representative of any of those parties, a claim could be brought against one of these categories of defendant.
• Suppliers, such as retailers and distributors, would continue to be able to escape liability by naming their own supplier. Alternatively, they could name another liable party, but that party would have to be established in the UK and identified in a prescribed order of priority:
  • A UK producer, own-brander or importer;
  • An authorised representative of the producer, own-brander or importer;
  • The fulfilment service provider or its UK authorised representative; or
  • A Core Participant or its UK authorised representative.

3. Defect and proof

• The core test, whether a product is safe, would remain.
• The Consultation asks whether defendants should still be required to show that a product met the expected level of safety. It is worth noting that the New PLD has already shifted the burden of proof, so that where a claimant establishes that it is plausible that the product was defective, the defendant may be required to prove otherwise.
• Seven non-exhaustive principles are proposed, which could establish defect. These include principles on warnings and risk presentation, avoidability of risk, a risk-benefit test and a comparison with available alternatives. New “relevant circumstances” would include self-learning, interconnection, cybersecurity and the producer’s ability to update a product after supply.
• A novel proposal is put forward for complicated tech cases where it can be very hard for an injured person to prove what went wrong. Here, the Law Commission suggests “rebuttable presumptions” alongside a risk-sharing mechanism for exceptional evidential difficulties.

This means the court would start by assuming the claimant’s case is true, with the burden upon the defendant to prove the contrary. Where the evidence simply does not exist, the business could choose one of two options:

1. Try to prove the product was safe; or
2. Accept liability, in which case the risk is shared. The starting point would be an award of 50% of the damages that would have been recoverable if the defect had been established, which the court could adjust to reflect how far an ordinary consumer could reasonably have understood and accepted the risk.

This mechanism recognises that even where adequate warnings are given on a product, this may not be sufficient to show genuine understanding, and allows for recognition of the contribution of the consumer’s own conduct to the harm. In either case, the consumer would still need to prove damage and causation.

4. Damage, defences and time limits

• Damage: There would be a minimum threshold of material harm for personal injury claims and the introduction of liability for mental harm, such as a recognised psychiatric illness, including claims by close family members. There would also be recovery for destruction or corruption of data, but not data leaks, and a reduced payout for mixed use, for example work and home-use items such as laptops, to reflect the mixed use. The existing £275 minimum threshold for property claims would disappear.
• Development risks defence: The development risks defence would be retained, with the introduction of an objective test to determine what scientific and technical knowledge was accessible at the time. Where a producer makes a product defective after supply, for example through an update or a failure to update, knowledge would be judged at the point of the update or the failure to update. The Law Commission expects the development risks defence to be available rarely, if ever, in failure-to-update cases.
• Post-supply defects: Producers would not be able to argue that a defect did not exist at the time of supply if they caused it afterwards, including by failing to provide software updates. There would, however, be no freestanding obligation to provide updates.
• Long-stop: Mirroring the PLD, the ten-year period would reset where a product is substantially modified, but not on an AI system’s ordinary self-learning, and would be extended to 25 years for latent personal injury.
• Group structures: Courts would ordinarily allow a claimant who sued the wrong company in a group to substitute the right one, unless it would be inequitable, even after the long-stop has expired.

What does this mean for business?

The Law Commission presents its package as a rebalancing of risk between consumers and producers and other economic operators. In practice, most proposals point in the same direction: more products, more defendants and more heads of loss within scope, with fewer evidential and procedural obstacles for claimants.

There are counterweights, including retention of the development risks defence, fall-back status for new defendants as outlined above, no general presumption of causation and controls on new heads of loss. The Law Commission recognises that the costs of reform may include higher insurance premiums and compliance costs.

For litigation risk, three points stand out:

• Design-defect arguments become easier to frame. The risk-benefit and “safer alternative” principles give claimants a clearer basis for challenging how a product was designed, an approach already familiar in US product liability litigation. However, the same principles also give defendants a clearer and more predictable framework for defending their design choices. A business that can show it properly weighed the risks and benefits of its design and considered the available alternatives will be well placed to resist a design-defect claim. This makes good contemporaneous records of design decisions all the more valuable.
• Exposure for software-driven products would become ongoing. Liability would no longer crystallise at the point of sale. Update decisions, and decisions not to update, would bear on defect, defences and the long-stop period.
• Group claims become more viable. Uniform digital features, the new psychiatric harm framework, longer tails for latent injury and easier substitution within corporate groups all benefit group actions. The Law Commission notes that complex claims already typically depend on litigation funding, and that it will shortly begin separate work on a possible consumer class actions regime.

What should businesses do now?

Whilst the proposals remain subject to consultation and may change materially before any legislation is introduced, the overall direction of travel indicates a broader, pro-consumer regime.

Right now, businesses should be thinking about the following steps:

• Have your say: The Consultation closes on 14 January 2027, with final recommendations expected in late 2027. As with the consultation on proposed reforms to the General Product Safety Regulation 2005, we will be compiling a response. The Law Commission is specifically seeking evidence on costs, insurance and impact on SMEs, and so this is an important opportunity to help shape the future of the UK product liability landscape.
• Figure out if you will be newly caught by the proposals: This matters most if you work with software, AI, apps or platforms which would be covered by the proposals for the first time.
• Map your supply chain: Now is the time to map your role in the supply chain against the new categories of defendant, alongside the “responsible person” proposals on the product safety side. Include fulfilment companies, marketplaces and UK representatives in your analysis.
• Review how you handle updates: For software and connected products in particular, review and update your governance and record-keeping. Your records would be central both to proving the absence of a safety defect and to defending claims. Keep a particular eye on AI after it has gone on sale and ensure all record-keeping, including around the design and testing of products, is rigorous.
• Review insurance arrangements: Revisit contracts and insurance, including indemnities, recourse rights and cover for a longer-tail liability profile and new heads of loss such as data loss and mental harm.
• Plan for different rules in different locations for a short time: Businesses should factor UK and EU divergence into their planning. Even though UK law is unlikely to change for some time, businesses trading across borders cannot afford to ignore the PLD. Northern Ireland must implement the PLD by 9 December 2026, so far as it is within scope of the Windsor Framework, and UK businesses placing products into the EU marketplace on or after 9 December 2026 will still need to fully comply with that regime.

Our Product Liability and Product Recall team is advising clients on both the product safety and the product liability consultations. If you would like to discuss what these proposals mean for your business or supply chain, or if you are considering responding to the consultation, please get in touch to see how we can help.

This article was written by Hannah Nichols, Marshall Hagemeyer,