The Law Commission has 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.
The Law Commission has now published the terms of reference of its current review of the law relating to liability for defective products. With the NHS and private healthcare providers, including individual practitioners and dentists, increasingly employing new technologies to improve patient care, the Law Commission’s recommendations on changes to the law, once published, will potentially significantly impact product liability claims by patients.
The Law Commission last reported in this area of law nearly 50 years ago, following which the Consumer Protection Act 1987 (‘CPA 1987’) was introduced in the UK which implements the EU product liability directive (85/374/EEC).
The CPA 1987 introduced no-fault liability for defective products i.e., 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 1987.
Since the implementation of the CPA 1987, the range of available products, particularly digital products and emerging technologies, has developed significantly and the Law Commission says, “there are concerns that the product liability regime has not kept pace with such developments.”
Domestic legislation has been slow to catch up. The EU is ahead of the UK with its new Product Liability Directive 2024/2853 (the ‘new EU PLD’) having come into force on 9 December 2024. Member states will have to implement changes set out in the new EU PLD by December 2026, although it will only apply to products placed on the market after that date.
The new EU PLD extends the definition of ‘product’ to encompass software, including updates, AI, digital manufacturing and digital services. Under the new EU PLD, a product will be deemed presumptively defective if the manufacturer fails to comply with the obligation to disclose information relevant to a claim, the product does not comply with mandatory safety requirements or damage is caused by an obvious product malfunction. The new EU PLD also extends the limitation period (currently 10 years) up to 25 years for personal injury claims where there is latent development of symptoms.
The Law Commission says the current review will “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.”
The review will also help determine whether the law on product liability is successfully balancing the interests of consumers in respect of compensation claims and producers and suppliers, who need to be able to innovate. Healthcare Insurers and indemnifiers will need to keep a close eye on any developments.
The terms of reference state the issues to be considered by the review will include the following:
- Does the CPA's definition of "product" need to be reformed to include digital technologies, such as software and digital downloads, and are reforms are required to reflect when a product has been modified by either its producer or a third-party?
- Whether the CPA’s definition of “defect” needs to be reformed to take into account the nature of emerging technologies, including AI.
- Is reform required of the CPA’s definition of “producer” and the range of economic operators who may be held liable?
- Should the 10-year imitation period under the CPA be extended for latent harms and products that are periodically updated (such as software)?
- 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?
- 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?
- Whether the definition of “damage” in the CPA needs to be extended to account for the harm that can be caused by emerging technologies, include data destruction or data corruption.
It is essential that the NHS and other healthcare providers are able to continue to use new technologies to improve patient care. It is therefore hoped that any changes to the current law on product liability will accommodate the need for the NHS and private healthcare providers to continue to innovate as safely as possible, whilst ensuring that patients can bring claims for compensation when indicated.
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