The Law Commission of England and Wales has proposed potentially far-reaching reforms of product liability law to bring it up to date for the digital age.
Product liability law gives consumers compensatory remedies for personal injury or certain property damage caused by defective products. In England and Wales, Part 1 of the Consumer Protection Act 1987 (CPA) imposes strict liability, so claimants need not prove fault. However, it is nearly 50 years old and was designed for tangible goods, so it has not kept pace with technological change and may no longer be fit for the digital age.
Has the product liability regime been outpaced?
Digital technology has transformed both products and how consumers buy them. Software, apps, AI systems and social media platforms may cause real harm, yet the CPA's definition of "product" as "any goods or electricity" remains focused on tangible items and excludes many modern systems. Claimants may also face significant evidential hurdles in proving defect and causation, particularly in technically complex cases.
The Law Commission consultation
The Law Commission is now consulting on how the CPA currently operates and how it can adapt the regime to emerging technologies. It aims to support access to redress, enable businesses to manage risk without unduly inhibiting innovation, and promote responsible business practices and consumer confidence. The review also takes place against the backdrop of the EU's own reform, which adopted a new Product Liability Directive in 2024, which is in force as of December this year. After reviewing responses, the Law Commission expects to publish its final report and recommendations in late 2027, when the UK government will decide whether to take them forward.
Proposals for reform
The Law Commission says that its proposals seek to strike an appropriate balance between the interests of consumers and businesses, offering consumers a straightforward route to compensation while giving businesses the legal certainty they need to manage liability risk. Nonetheless, taken together, they would represent a considerable change to the way the CPA currently operates.
Among the key questions are whether the definition of "product" should be expanded to include software and AI systems, however supplied (that is, whether embedded in a physical medium or supplied digitally, for example by download from the cloud or provided as a SaaS), and whether the definition of "producer" should correspondingly extend to the person who developed them.
The potential inclusion of not only software and AI systems but also the design components of social media and other online platforms means that features such as the 'infinite scroll', tailored algorithms, and autoplay would fall into its scope.
Other, more practical changes have also been explored, including adopting a minimum threshold of material harm which must be met before a personal injury claim can be brought. It also proposes removing the £275 lower threshold for property damage altogether.
The key provisional proposals are:
- A broader, future-proof definition of "product" that includes software, AI systems (whether delivered on or embedded in a physical medium or supplied digitally), 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 a "defect".
- A rebuttable presumption of defect and a risk-sharing mechanism in cases involving exceptional evidential difficulties.
- A new framework for the compensation of psychiatric harm.
- Compensation for damage to property used for mixed private and professional purposes.
- 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.
What does this mean?
If enacted, the proposals would have significant consequences for consumers and businesses alike.
A wider definition of "product", combined with new categories of liable individuals and organisations, means greater exposure for software and AI developers, platform operators, online marketplaces and fulfilment providers. For example, a producer could cause a product to become (or remain) defective under the CPA by issuing a faulty software upgrade or failing to provide a necessary update.
Consumers are likely to benefit from a clearer and more accessible route to compensation, including for harm caused by digital products, psychiatric injury, destruction or corruption of data, and low-value property damage below the current £275 threshold.
Either way, the reforms are intended to deliver greater legal certainty for businesses developing the products and technologies of the future, and a fairer allocation of risk to those who create, control or benefit from it. The consultation ends on 14 January 2027.
