Product liability shake up on the horizon - part 2

We previously advised that the UK Law Commission had launched its first review of product liability in almost 50 years: Product liability shake up on the horizon | Weightmans

By way of recap, in August 2025, the UK Law Commission launched its first review of product liability law in almost 50 years, with a particular focus on digital products and emerging technologies such as AI. Following an initial scoping exercise towards the end of 2025, the Law Commission then published its terms of reference for the review of the law relating to liability for defective products.

The Law Commission commented that the review would “consider the operation of the existing product liability regime, particularly in relation to digital products and emerging technologies such as AI to determine what law reform might be required to ensure that the product liability regime is fit for purpose.”

That existing regime is based on The Consumer Protection Act PA 1987 (the “CPA”), which introduced no-fault liability for defective products so, a consumer does not have to prove that a producer acted unreasonably as would be required in negligence. Although a consumer need not prove fault on the part of a producer, they must prove that the product is defective within the meaning of the CPA. The CPA was introduced into UK law after implementing the EU product liability directive (85/374/EEC).

The review would help determine whether the law on product liability is successfully balancing the interests of consumers and producers and suppliers.

The terms of reference stated the issues to be considered by the review would include the following:

I. Does the CPA’s definition of “product” need to be reformed to include digital technologies, such as software and digital downloads, and are reforms required to reflect when a product has been modified by either its producer or a third-party?

II. Whether the CPA’s definition of “defect” needs to be reformed to take into account emerging technologies, including AI.

III. Is reform required of the CPA’s definition of “producer” and the range of economic operators who may be held liable?

IV. Should the 10-year limitation period under the CPA be extended for latent harms and products that are periodically updated (such as software)?

V. Is it appropriate to amend the “state of the art” defence in the CPA 1987 to account for the fact that some products can be updated over time?

VI. Under the existing laws, is it too difficult for claimants and their experts to show that some products are defective, for example, software and generative AI, which are often opaque?

VII. Whether the definition of “damage” in the CPA needs to be extended to account for harm that can be caused by emerging technologies, including data destruction or corruption.

The implication of some of the areas to be reviewed, and comments made by the Law Commission, suggested that the reforms under consideration could potentially make it easier for claimants to pursue product liability claims in the future.

A summary of the key proposals is as follows:

• A broader, future-proof definition of “product” that includes software, AI systems, and the design components and features of social media and other online platforms.

• An expanded definition of “supply”, under which products are treated as supplied irrespective of how they are delivered, including by download or other digital means, together with clarification of liability where products have been substantially modified after supply.

• New categories of potentially liable persons to reflect the increasing complexity of modern supply chains, including fulfilment service providers, online marketplaces and UK authorised representatives.

• A clearer and more structured framework for determining what constitutes “defect”.

• In limited cases involving exceptional evidential difficulties, a rebuttable presumption of defect and a risk-sharing mechanism.

• A new framework for the compensation of psychiatric harm, as well as compensation for damage to property used for mixed private and professional purposes and compensation for destruction and corruption of data.

• The retention of the existing defences, subject to updates to ensure they continue to work effectively in cases concerning digital products.

• The reset of the long-stop period following a substantial modification to a product by a producer and the extension of the long-stop to 25 years in cases of latent harm.

For those of you who have been following the EU product liability law developments, these provisional proposals will look familiar. The Consultation contains an Appendix which shows a comparison with the new Directive and highlights where its proposals either diverge or converge. It remains to be seen how closely aligned ( or not) the UK and the EU will ultimately become in terms of product liability law.

Insurers, manufacturers and suppliers of products will want to keep a close eye on this Consultation, and possibly want to respond to it themselves, as the outcome may alter their risk profile in respect of liability for defective products.