1. I. Foundations of Product Liability and Warranty Litigation
    1. 1. What are the primary legal grounds for product liability claims in your jurisdiction (e.g., contract, tort, statutory regimes)? Is liability fault-based, strict, or both? 
    2. 2. How is a "product" defined under the applicable laws? Does this include intangible products, e.g. software? Are there distinctions between consumer and business products?
    3. 3. Who may bring product liability and warranty claims? Can claims be pursued on behalf of deceased individuals? 
    4. 4. What types of damages are recoverable? Does it include non-material losses? 
  2. II. Establishing Product Defects and Liability
    1. 5. How is a "defective" product defined? What must claimants demonstrate to prove a defect?
    2. 6. Which party bears the burden of proof in product liability cases? Is it possible to shift or reverse this burden?
    3. 7. What criteria will courts use to assess if a product is defective, and how relevant are breaches of regulatory requirements or safety standards?
    4. 8. Which entities within the product supply chain can be held liable for defects?
    5. 9. If multiple parties are responsible, how is liability apportioned among them?
  3. III. Defenses and Limitation of Liability
    1. 10. What defenses may a defendant invoke in product liability actions?
    2. 11. Can liability be limited or excluded, either contractually or by statute? Under what conditions?
    3. 12. What are the statutory limitation periods applicable to product liability claims? Do different limitation periods apply in cases involving death?
  4. IV. Contractual Claims and Warranty
    1. 13. Do product liability claims commonly involve implied contractual warranties? If so, how are these warranties typically defined?
    2. 14. What remedies are available for breach of contract or warranty regarding defective products?
    3. 15. Are punitive damages recoverable in breach of warranty cases?
  5. V. Proceedings and Evidence
    1. 16. Are there rules governing document disclosure in product liability litigation? If so, which types of documents are commonly disclosed?
    2. 17. Is group or class action litigation permitted for product liability claims? Please describe the available mechanisms, including opt-in or opt-out procedures, and indicate the most common method.
    3. 18. How are product liability lawsuits typically funded in your jurisdiction? Is third-party litigation funding allowed and regulated?
    4. 19. Can successful claimants recover litigation costs from losing parties? Are contingency fee arrangements or cost uplifts permitted?
  6. VI. Recent Case Law and Outlook
    1. 20. Highlight significant recent product liability cases from your jurisdiction and summarise their key implications.
    2. 21. Are there current policy or legislative proposals likely to affect product liability laws, particularly with respect to emerging technologies?

I. Foundations of Product Liability and Warranty Litigation

In Germany, there are three primary legal grounds for bringing product liability claims:

Firstly, under the German Product Liability Act (Produkthaftungsgesetz, ProdHaftG), producers within the meaning of the ProdHaftG or importers bear strict liability, meaning they are liable for damage caused by a defective product regardless of fault or negligence. To establish liability under the Product Liability Act, the claimant must prove that the product was defective, that a damage occurred, and that a causal link exists between the defect and the damage. This law specifically covers personal injury, death, and damage to private property exceeding EUR 500.

Secondly, claimants may rely on the general tort liability provisions under the German Civil Code (Bürgerliches Gesetzbuch, BGB). Unlike the Product Liability Act, tort liability under § 823 BGB requires proof of fault, typically negligence or intent by the defendant. However, case law by the German Federal Court (Bundesgerichtshof, BGH) provides for a generous reversal of the burden of proof. Liability under tort may encompass personal injury, property damage, and economic loss directly resulting from a defective product.

Lastly, product liability claims can also be based on contractual warranty provisions under the BGB (§§ 433 ff., 437 ff.). Contractual liability typically involves strict liability, meaning that the seller is liable if the product does not conform to the agreed-upon specifications at the time of delivery, irrespective of fault. This strict liability applies in particular to claims for cure (repair or replacement), rescission, and price reduction, which do not require the buyer to prove any negligence or intent on the part of the seller. In contrast, claims for damages are fault-based. However, under § 280 (1) 2 BGB it is presumed that the seller acted negligently with regard to the defect, placing the burden on the seller to demonstrate the absence of fault in order to avoid liability. This can in most cases be achieved if the seller is not the manufacturer as any negligence by the manufacturer is not attributed to the seller. 

2. How is a "product" defined under the applicable laws? Does this include intangible products, e.g. software? Are there distinctions between consumer and business products?

Under the current Product Liability Act (Produkthaftungsgesetz, ProdHaftG), a "product" is broadly defined in § 2 ProdHaftG as “any movable, even if incorporated into another movable or into an immovable, as well as electricity”. Thus, the term product refers to any movable item, regardless of whether it is a finished product, a component, or raw material and explicitly includes electricity as well. Intangible items, such as standalone software, typically fall outside the traditional scope of the ProdHaftG unless they are embedded in or integral to a physical product.

However, recent developments at the EU level, particularly the new EU Product Liability Directive, will bring significant changes regarding software. Under the new directive, standalone software – including digital services and AI-based products – will be included in product liability frameworks, thereby expanding the potential liability risks for software producers.

Under warranty provisions within the German Civil Code (Bürgerliches Gesetzbuch, BGB), the concept of a "product" similarly refers predominantly to physical, movable goods. However, software (digital products) is now increasingly recognized under certain consumer protection regulations as subject to specific warranty rules, reflecting recent legislative reforms addressing digital content.

German law generally does not establish a fundamental distinction between consumer and business products in terms of the definition of a product itself. Nevertheless, significant differences arise in the application of consumer protection and warranty provisions. Consumers are granted broader statutory protections and mandatory rights, such as restrictions on limiting or excluding liability, whereas in B2B-transactions, parties generally enjoy greater contractual freedom, including the option to deviate from statutory warranty rules through individual agreements.

3. Who may bring product liability and warranty claims? Can claims be pursued on behalf of deceased individuals? 

Under German law, claims under the Product Liability Act (Produkthaftungsgesetz, ProdHaftG) can be pursued by any individual who has suffered damage as a result of a defective product. This includes direct victims who experienced personal injury or property damage, as well as indirect victims who suffered losses due to such incidents.

Claims may also be pursued on behalf of deceased individuals. Specifically, the heirs of a deceased victim can bring a product liability claim to recover damages for losses incurred by the deceased prior to death, such as medical expenses or pain and suffering. Additionally, individuals financially dependent on the deceased (e.g. family members or dependents) may claim compensation for economic loss due to the victim's death.

Similarly, under tort provisions of the German Civil Code (Bürgerliches Gesetzbuch, BGB), claims can be initiated by those directly affected by the defective product, and heirs or dependents can also seek recovery for losses resulting from the victim’s death, provided they can establish the required prerequisites of liability.

Contractual claims under warranty provisions may typically be pursued by the original contracting party or their legal successors, including heirs. 

4. What types of damages are recoverable? Does it include non-material losses? 

The Product Liability Act (Produkthaftungsgesetz, ProdHaftG) provides for compensation in cases of personal injury or death caused by defective products. This includes reimbursement for medical expenses, loss of earnings, and compensation for non-material damages such as pain and suffering (Schmerzensgeld). In the event of death, the law also allows for claims covering funeral costs and support for dependents. For property damage, compensation is available only if the damaged item was intended for private use and is not the defective product itself; a deductible of EUR 500 applies.

Under § 823 of the German Civil Code, claimants can seek compensation for both material and non-material damages resulting from a defective product. This encompasses medical costs, loss of income, property damage, and pain and suffering.

Contractual claims focus on the seller's liability for delivering a defective product. Remedies include repair, replacement, price reduction, or contract rescission. Compensation for consequential damages is also possible, including claims for non-material damages like pain and suffering.

In all cases, German law follows the principle of full compensation (Grundsatz der Naturalrestitution), but it does not permit punitive or exemplary damages, regardless of the legal basis invoked.

II. Establishing Product Defects and Liability

5. How is a "defective" product defined? What must claimants demonstrate to prove a defect?

Under German law, the definition of a “defective” product and the evidentiary requirements to prove a defect vary depending on whether the claim is based on strict liability under the Product Liability Act (Produkthaftungsgesetz, ProdHaftG), fault-based tort law, or contractual warranty under the German Civil Code.

Within the meaning of the ProdHaftG, a product is considered defective under § 3(1) if it does not offer the safety that a person is entitled to expect, taking all circumstances into account. This includes the product’s presentation, its reasonably foreseeable use, and the time at which it was put into circulation. The standard is objective and based on the legitimate safety expectations of the average user. Design defects, manufacturing errors, and inadequate instructions or warnings ("instruction defects") can all render a product defective. Importantly, a product is not defective merely because a better or newer version exists; the safety assessment is based on the state of scientific and technical knowledge at the time of marketing, § 1 (2) no. 5 ProdHaftG.

To succeed with a claim under the ProdHaftG, the claimant must prove that (1) the product was defective as defined above, (2) the defect caused damage, and (3) there is a causal link between the defect and the specific injury or property loss. Fault is not required.

In tort law under § 823 BGB, the concept of defect is tied to a breach of a legal duty, and often follows similar substantive standards to those under the ProdHaftG. Courts have developed the so-called "producer’s liability" (Produzentenhaftung), where liability arises if the producer breached a duty of care in design, production, quality control, product monitoring, or providing adequate warnings. Here, claimants must prove not only the defect and damage, but also the producer’s fault (intent or negligence). However, the German Federal Court has held that there is a reversal of the burden of proof if the claimant can demonstrate that a defect of the product caused the damage, shifting the burden to the producer to prove absence of fault.

Under contractual warranty law, a product is defective if it lacks the agreed-upon characteristics or fails to meet objective requirements for conformity as set out in § 434 BGB. This includes the product's suitability for its intended use, compliance with public statements, and adherence to expected quality and durability. In B2C sales, the law presumes that any defect appearing within 12 months of delivery existed at the time of delivery (§ 477 BGB), shifting the evidentiary burden to the seller.

In summary, while the definition of defect varies across legal regimes, it consistently centers on deviations from expected safety or agreed qualities.

6. Which party bears the burden of proof in product liability cases? Is it possible to shift or reverse this burden?

In German product liability cases, the claimant generally bears the burden of proof for the existence of a defect, the damage suffered, and the causal link between the two. Under the Product Liability Act, although liability is strict and fault does not need to be proven, the injured party must still demonstrate defect, damage and causation. Courts may, however, allow reliance on circumstantial evidence or apply prima facie presumptions where a product fails unexpectedly under normal use.

In tort claims under § 823 BGB, the burden is heavier: the claimant must prove the defect, fault (negligence or intent), damage, and causation. Still, courts may shift the burden of explanation to the producer, especially if the defect arose within the producer’s sphere of control, or where regulatory standards were violated.

In the context of contractual warranty claims, buyers must prove that a defect existed at delivery. However, in consumer sales, § 477 BGB shifts the burden: if the defect appears within 12 months, it is presumed to have existed at delivery unless the seller proves otherwise. No such presumption exists in B2B sales.

It is to be noted that the burden of proof can be contractually modified within certain limits and depending on the type of contractual relationship.

In B2B contracts, the principle of contractual freedom generally allows the parties to agree on clauses that alter the statutory burden of proof. For example, they may include clauses that create presumptions in favor of one party or place the evidentiary risk on the other. These agreements are permitted as long as they do not violate mandatory legal provisions, public policy, or are deemed unfair under the rules on general terms and conditions, §§ 305 ff. BGB.

In B2C contracts the scope for modifying the burden of proof is restricted. In particular, § 477 BGB, which provides for a reversal of the burden of proof in favor of the consumer for defects that appear within 12 months after delivery, is mandatory law. Any attempt to contractually exclude or restrict this rule to the consumer’s detriment would typically be invalid.

In the context of product liability under the ProdHaftG, liability is largely mandatory and governed by strict public policy. According to § 14 ProdHaftG, producers cannot exclude or limit their statutory liability towards injured persons by contract. Consequently, contractual clauses that seek to shift or increase the claimant’s burden of proof under the ProdHaftG would not be enforceable.

7. What criteria will courts use to assess if a product is defective, and how relevant are breaches of regulatory requirements or safety standards?

German courts assess whether a product is “defective” primarily by applying an objective safety expectation standard, particularly under the Product Liability Act (ProdHaftG) and tort law. The key question is whether the product fails to offer the level of safety that the general public is entitled to expect, taking all circumstances into account.

Under § 3(1) ProdHaftG, relevant factors include the presentation of the product (e.g., packaging, instructions, marketing), the reasonably foreseeable use of the product, and the time when the product was put into circulation. These criteria are applied from the perspective of an average user. The courts will examine whether the risk posed by the product exceeds what a user could reasonably expect, considering normal handling and foreseeable misuse. A product is not defective simply because a safer or newer version was later developed.

Breaches of regulatory requirements or safety standards, e.g. EU directives, technical norms (DIN), or CE marking obligations, are highly relevant in this assessment. A violation of applicable safety standards can indicate that the product is defective. While not all technical standards are legally binding, non-compliance may be seen as evidence of a failure to meet the expected level of safety. Conversely, compliance with current standards does not automatically rule out a defect but may support the producer’s position.

In tort claims under § 823 BGB, the same safety criteria apply, but courts additionally assess whether the producer breached specific duties of care—in particular in design, manufacturing, quality control, instructions, and post-sale monitoring. These duties are judged based on the current state of science and technology, which are often reflected in technical standards.

8. Which entities within the product supply chain can be held liable for defects?

Under German law, multiple entities within the product supply chain can be held liable for defects, depending on the legal basis of the claim. Liability may arise under the Product Liability Act (ProdHaftG), tort law (§ 823 BGB), or contractual provisions under the German Civil Code (BGB).

Under the Product Liability Act primary liability falls on the producer of the defective product. This includes not only the actual producer of the final product but also:

  • Component producers, if a defective component causes the harm;
  • Quasi-producers, who present themselves as the producer by branding or labeling the product as their own;
  • Importers into the EU, even if they are not the original producer;
  • In certain cases, suppliers or distributors, if the actual producer cannot be identified. Under § 4 (3) ProdHaftG, a supplier must name the producer or previous supplier; if they fail to do so in a timely manner, they may be held liable as if they were the producer.

In tort law, any party in the supply chain that breaches a duty of care and thereby causes damage may be liable. This could include producers, suppliers, wholesalers, or retailers; the latter, however, only if they negligently handled or failed to inspect the product. Liability depends on whether the defendant exercised adequate care in their role.

In contractual relationships, liability only attaches to the seller or contractual partner. This includes retailers and distributors who deliver defective products. The buyer may assert warranty claims directly against the party with whom the contract was concluded, even if the defect originated further up the supply chain.

9. If multiple parties are responsible, how is liability apportioned among them?

If multiple parties are responsible for damage caused by a defective product liability is apportioned according to each party’s contribution to the harm, based on the principles of joint and several liability (gesamtschuldnerische Haftung).

Under the Product Liability Act (ProdHaftG), if more than one party is liable (e.g. a producer and an importer), they are jointly and severally liable to the injured party under § 5(1) ProdHaftG. This means the claimant may recover the full amount of damages from any one of the liable parties. The party that pays more than its share may then seek contribution from the others in internal recourse proceedings, depending on their respective degrees of fault or responsibility.

In tort law, the same principle applies: if multiple tortfeasors jointly cause harm, each is fully liable to the claimant, but the courts may apportion internal liability among them based on causation and fault. If it cannot be determined who caused which part of the damage, courts may divide liability equally or based on estimated responsibility.

In contractual warranty cases, the seller is primarily liable to the buyer, even if the defect stems from a third party (e.g., the producer). However, the seller may pursue recourse claims against upstream suppliers or producers under §§ 445a, 478 BGB (especially in consumer sales), assuming statutory or contractual conditions are met.

III. Defenses and Limitation of Liability

10. What defenses may a defendant invoke in product liability actions?

Under the Product Liability Act, the producer may avoid liability by proving one of the statutory defenses under § 1 (2) and (3) ProdHaftG:

  • the producer did not put the product into circulation,
  • under the circumstances it can be assumed that the defect which caused the damage did not exist at the time when the producer put the product into circulation,
  •  the product was neither manufactured by the producer for sale or any other form of distribution for economic purpose nor manufactured or distributed by the producer in the course of his or her professional activity,
  • the defect is due to compliance of the product with mandatory regulations at the time when the producer put the product into circulation or
  • the state of scientific and technical knowledge at the time when the producer put the product into circulation was not such as to enable the defect to be discovered.
  • In the case of component producers: that the defect was caused by the design of the finished product or instructions issued by the producer of the final product.

In tort claims under § 823 BGB, a defendant may defend themselves by proving the absence of fault (i.e., that all due care was taken in product design, production, instructions, and post-market surveillance). If the damage was caused by misuse or third-party interference, or if the claimant contributed significantly to the damage, this may either exclude liability or lead to a reduction under the principle of contributory negligence (Mitverschulden, § 254 BGB).

In contractual warranty cases, the seller may avoid liability by proving that the defect did not exist at the time of delivery. The seller may further avoid liability for damages if they can demonstrate that they are not responsible for the breach, i.e., that the defect occurred without fault. In practice, this means the burden shifts to the seller to prove they exercised proper care or that the defect was unavoidable. In B2B transactions, warranty claims may be precluded if the buyer failed to properly inspect the goods and notify defects in time, pursuant to § 377 of the German Commercial Code (Handelsgesetzbuch, HGB).

11. Can liability be limited or excluded, either contractually or by statute? Under what conditions?

Under German law, the ability to limit or exclude liability for product defects depends on the legal basis of the claim and the parties involved. While contractual limitation clauses are generally permitted in B2B transactions, there are statutory restrictions in consumer protection and strict liability contexts. Further, there are limits on limiting or excluding liability in general terms and conditions, both in B2C and B2B transactions. 

In cases brought under the Product Liability Act, liability cannot be contractually excluded or limited. § 14 ProdHaftG expressly prohibits any contractual clause that seeks to waive or limit a producer’s liability towards the injured party before the damage occurs. This prohibition applies regardless of whether the injured party is a consumer or a business. Even indemnification agreements between commercial parties (e.g., between a producer and distributor) cannot affect the injured party’s right to compensation.

In tort law under § 823 BGB, general exclusions of liability for personal injury or death are not permitted. Under § 276 (3) BGB liability for intentional conduct generally cannot be excluded. With regard to gross negligence, exclusion is not permitted in general terms and conditions. Furthermore, the Federal Court of Justice (BGH) has repeatedly held that any general exclusion of liability for negligence in standard terms (AGB) is typically unenforceable, when it affects so-called cardinal obligations (Kardinalpflichten)i.e. duties essential to the performance of the contract. 

In contractual warranty claims, liability can be limited or excluded by agreement in B2B contracts in individually agreed contracts. Parties may shorten limitation periods, reduce available remedies, or exclude warranty rights entirely. For general terms and conditions various restrictions have to be considered. However, in B2C contracts, many of these limitations are restricted or invalid under mandatory consumer protection law also in individually agreed contracts.

12. What are the statutory limitation periods applicable to product liability claims? Do different limitation periods apply in cases involving death?

Under German law, different rules regarding limitation periods apply for claims under the Product Liability Act, tort law, and contractual warranty provisions. While the occurrence of death may impact the type of damages recoverable, it does not generally alter the limitation periods themselves.

For claims under the Product Liability Act, the standard limitation period is three years from the date the claimant becomes aware, or should reasonably have become aware, of the damage, the defect, and the identity of the liable party, § 12 (1) ProdHaftG. This period is subject to a long-stop limitation of ten years from the date the product was first put into circulation, regardless of knowledge, § 13 ProdHaftG. Once this ten-year period has expired, claims are time-barred even if the claimant was unaware of the defect.

In tort law, the same three-year subjective limitation period applies. It begins at the end of the year in which the claim arose and the claimant became aware of the relevant facts and the responsible party. As with product liability, there is also a maximum limitation period of 10 or 30 years, depending on the circumstances. In particular, claims for intentional harm are subject to a 30-year period, § 199 (2) BGB, while other tort-based claims usually fall under the 10-year cut-off.

In contractual warranty claims, the standard limitation period is two years for movable goods, § 438 (1) No. 3 BGB, starting from the date of delivery. In cases involving fraudulent concealment of a defect, the period extends to three years from the date of discovery, with a maximum of 10 years from the initial breach, § 438 (3) BGB.

IV. Contractual Claims and Warranty

13. Do product liability claims commonly involve implied contractual warranties? If so, how are these warranties typically defined?

Yes, product liability claims in Germany often involve implied contractual warranties, particularly in the context of sales contracts governed by the German Civil Code. These implied warranties form a key part of the buyer’s protection when a product turns out to be defective and supplement or overlap with claims under tort law or the ProdHaftG.

Under § 433 (1) 2 BGB, the seller is obligated to deliver a product free of material defects and legal defects. A material defect exists if the product does not comply with the subjective requirements (agreed characteristics), objective requirements (fitness for ordinary use and usual quality), and integration requirements (installation or compatibility issues, including for digital products) at the time of delivery.

In consumer contracts, these implied warranties are mandatory, and contractual exclusions or limitations are heavily restricted by consumer protection law. In B2B transactions, implied warranties still apply, but the parties have more flexibility to modify or exclude them by contract.

14. What remedies are available for breach of contract or warranty regarding defective products?

If a product is defective within the meaning of § 434 BGB, the buyer is entitled to several remedies under § 437 BGB:

  • Cure (Nacherfüllung): The buyer can demand repair or replacement (§ 439 BGB), with the seller bearing all related costs.
  • Price Reduction or Rescission: If cure fails or is refused, the buyer may either reduce the purchase price (§ 441 BGB) or withdraw from the contract (§ 323 BGB).
  • Damages: Compensation for consequential losses is possible (§§ 280, 281 BGB), provided the seller was at fault—though fault is presumed and must be disproven by the seller.
  • Reimbursement of expenses: Under § 284 BGB, expenses incurred in reliance on receiving a proper product may be refunded.

In consumer contracts, statutory protections like the 12-month burden of proof reversal (§ 477 BGB) apply, and warranty exclusions are largely ineffective.

15. Are punitive damages recoverable in breach of warranty cases?

No, punitive damages are not recoverable in breach of warranty cases under German law.

Germany follows the principle of full compensation (Grundsatz der Naturalrestitution) as codified in § 249 BGB, which aims to restore the injured party to the position they would have been in had the contract been properly fulfilled. Damages are limited to actual, measurable losses—either material (e.g., repair costs, lost profits) or, in limited cases, non-material (e.g., pain and suffering in personal injury cases).

V. Proceedings and Evidence

16. Are there rules governing document disclosure in product liability litigation? If so, which types of documents are commonly disclosed?

German law provides for rather limited and specific rules on document disclosure in litigation, including product liability cases. However, unlike common law jurisdictions, Germany does not recognize broad pre-trial disclosure or discovery elements. Instead, disclosure is tightly regulated and based on party initiative and judicial discretion.

§ 142 of the German Code of Civil Procedure (Zivilprozessordnung, ZPO) allows the court to order either party or even a third party to produce documents, but only if the requesting party specifically identifies the document and explains its relevance to the dispute. Fishing expeditions or blanket disclosure requests are not permitted.

In product liability cases, commonly requested or submitted documents include:

  • Technical specifications and design documentation;
  • Test and safety reports, including internal quality control records;
  • User manuals, packaging, and warnings (relevant for presentation defects);
  • Compliance documents, such as CE certifications or declarations of conformity;
  • Internal communications or reports on prior incidents, recalls, or known risks (if known to exist).

If the product was manufactured abroad, access to such documents may be complicated by cross-border evidence rules, including the Hague Evidence Convention, if applicable.

17. Is group or class action litigation permitted for product liability claims? Please describe the available mechanisms, including opt-in or opt-out procedures, and indicate the most common method.

Yes, Germany provides for forms of collective redress, but it does not have a class action system in the traditional sense. Instead, collective claims are addressed primarily through opt-in mechanisms led by qualified associations.

Germany's Consumer Rights Enforcement Act (VDuG), effective since late 2023, establishes two primary forms of collective legal action to facilitate the enforcement of consumer rights, including in product liability cases.: Model Declaratory Actions and Redress Actions.

Model Declaratory Actions, initially introduced in 2018 in light of the diesel emissions cases, are designed to determine common factual or legal issues in disputes between a variety of consumers and businesses. Initiated by qualified consumer associations, these actions aim to establish whether certain factual or legal conditions for claims exist. Consumers must actively register their claims (opt-in) to be part of the action. While the court's decision is binding regarding the declared findings, individual consumers must pursue separate proceedings to obtain specific remedies, such as damages or refunds.

In contrast, Redress Actions allow qualified associations to directly seek specific performance on behalf of consumers, including compensation or product replacement. This mechanism also follows an opt-in model, requiring consumers to register their claims. A key feature of Redress Actions is the possibility for the court to order a collective total amount to be paid into a fund, which is then distributed to eligible consumers by a court-appointed administrator. This process eliminates the need for individual follow-up lawsuits.

Both actions are subject to strict admissibility criteria. For instance, a Redress Action requires that the claims are of the same kind, meaning they are based on the same or similar facts and legal issues. Additionally, the action must concern the claims of at least 50 consumers.

Beyond these statutory mechanisms, Germany also recognizes the assignment model, where consumers assign their claims to a legal service provider, who then enforces the aggregated claims in its own name. This model has been upheld by German courts under certain conditions and offers a practical alternative for collective redress, especially in mass harm scenarios.

18. How are product liability lawsuits typically funded in your jurisdiction? Is third-party litigation funding allowed and regulated?

In Germany, product liability lawsuits are typically funded by the claimants themselves or through their legal expenses insurance (Rechtsschutzversicherung), which is a common means of covering litigation costs in consumer and commercial disputes. Such insurance may include coverage for legal fees, court costs, and expert witness expenses, provided the claim is considered to have reasonable prospects of success. without a specific legislative framework but must comply with general principles of civil, contract, and legal services law. The Federal Court of Justice (BGH) has upheld 

The recently enacted Consumer Rights Enforcement Act (VDuG) also acknowledges the role of third-party funding in collective redress procedures. Under § 4 (2) VDuG, qualified entities (e.g., consumer associations) may use third-party litigation funding to finance representative actions, but only under specific conditions. Most importantly, the funder must not exert any influence over the procedural decisions of the qualified entity, particularly regarding the choice of legal strategy or settlement decisions. This safeguard ensures the independence and objectivity of the association and protects consumers from conflicts of interest.

In addition, qualified entities must disclose any third-party funding arrangements to the court and demonstrate that they possess sufficient financial resources to conduct the proceedings independently. These requirements aim to balance access to justice with procedural fairness and transparency.

19. Can successful claimants recover litigation costs from losing parties? Are contingency fee arrangements or cost uplifts permitted?

Yes, under German civil procedure law, the losing party generally bears the costs of the proceedings, including court fees and the statutory legal fees of the prevailing party. This principle also applies fully to product liability litigation and provides a strong incentive for parties to carefully assess their litigation risks before proceeding.

Specifically, recoverable costs include:

  • Court fees based on the value of the claim;
  • Statutory attorneys’ fees under the Rechtsanwaltsvergütungsgesetz (RVG);
  • Costs of expert opinions, witness expenses, and translation if necessary.

However, only the statutory legal fees are recoverable, not any higher fees based on hourly billing or premium arrangements with one's own counsel.

As for contingency fees or success-based remuneration, these are generally prohibited in Germany, as per § 49 b (2) of the Federal Lawyers’ Act (BRAO) and § 4a of the Legal Services Act (RDG). Exceptions are permitted only in narrowly defined situations, e.g. when the client would otherwise be deterred from enforcing their rights due to financial hardship. 

VI. Recent Case Law and Outlook

20. Highlight significant recent product liability cases from your jurisdiction and summarise their key implications.

In its decision of 8 April 2025 (VI ZR 43/22), the German Federal Court of Justice (Bundesgerichtshof, BGH) referred several questions to the Court of Justice of the European Union (CJEU) concerning the interpretation of Article 5 of the Rome II Regulation (EC) No 864/2007, which governs the law applicable to product liability claims. The case arose from a claim by an Italian company against a German manufacturer of poultry farming equipment, seeking damages under Italian product liability law. The referral focuses on the interpretation of the concept of “placing the product on the market” within the meaning of Article 5 (1) Rome II. In particular, the BGH asked whether a product must itself have been marketed in the state where the damage occurred, or whether it is sufficient that identical or comparable products of the same type were placed on the market there. The BGH further seeks clarification as to whether “placing on the market” may occur through third parties such as distributors, how the concept applies where a product forms part of a larger technical system supplied or leased to the end user, and which law governs the claim if none of the options listed in Article 5 (1) Rome II applies.

Furthermore, in a recent decision of 9 March 2026 (VI ZR 335/24), the BGH ruled on pharmaceutical manufacturer liability for alleged COVID-19 vaccination related injuries. The claimant sought information as well as damages after losing hearing in one ear three days following vaccination with the defendant’s vaccine in March 2021. Her claims were based on Sections 84 and 84a of the German Medicinal Products Act (AMG), alleging both an unfavorable risk-benefit ratio and insufficient product labelling at the time of vaccination. The lower courts had dismissed the claims. The BGH held that the lower courts had applied overly strict standards when rejecting the claimant’s request for information under Section 84a AMG. According to the court, a claimant may be entitled to obtain information from the manufacturer if a causal link between the medicinal product and the alleged injury appears plausible. The disclosure obligation may extend to information on known effects and side effects of the vaccine that could be relevant for assessing potential liability. The BGH did not decide whether the vaccination caused the claimant’s injury or whether the manufacturer is liable for damages. However, the judgment strengthens the procedural position of claimants by clarifying the prerequisites for disclosure claims under Section 84a AMG.

21. Are there current policy or legislative proposals likely to affect product liability laws, particularly with respect to emerging technologies?

Yes, significant legislative reforms are underway in the European Union that will substantially impact product liability laws, particularly concerning emerging technologies such as software, artificial intelligence (AI), and connected devices. The most notable development is the adoption of the new EU Product Liability Directive (Directive (EU) 2024/2853), which aims to modernize the existing framework to address the complexities introduced by digitalization and AI. 

Key Changes introduced by the new EU Product Liability Directive include:

  • Expanded Definition of "Product": The directive explicitly includes software (both standalone and integrated), digital files (e.g., for 3D printing), and AI systems within the scope of product liability. This inclusion ensures that defects in digital products can lead to liability claims. 
  • Inclusion of Additional Economic Operators: Liability is extended beyond traditional producers to include authorized representatives, importers, fulfilment service providers, and, under certain conditions, online marketplaces. This change reflects the evolving nature of supply chains and the role of various intermediaries in product distribution. 
  • Recognition of Software Updates and Cybersecurity: Companies can be held liable for damages resulting from missing or inadequate software updates and insufficient cybersecurity measures. This provision underscores the importance of maintaining digital products post-sale.
  • Extended Scope of Responsibility: While under the current law, the state of scientific and technical knowledge at the time when the producer put the product into circulation is decisive the producer has to consider later changes if the products remain within its control which for example is the case if he provides regular software updates for the product. 
  • Extended Scope of Recoverable Damages: The directive broadens the types of compensable damages to include data loss or corruption, reflecting the value and importance of digital assets.
  • Facilitated Evidence Disclosure: Courts may order defendants to disclose relevant evidence under their control when a claimant has presented a plausible case. This measure aims to address information asymmetries between consumers and producers.
  • Adjusted Burden of Proof: In cases involving complex technologies, the directive allows for a presumption of defectiveness and causality if proving these elements is excessively difficult for the claimant, provided that the defect and the causal link are likely.
  • Extended Limitation Periods: The long-stop period for bringing claims is extended from 10 to 25 years in cases involving latent personal injuries, acknowledging that some harm may manifest long after product use

These reforms are particularly pertinent to sectors involving AI and digital products. Producers and developers of AI systems must now consider the potential for liability arising from algorithmic decisions, lack of transparency, and the need for ongoing updates and monitoring.

EU Member States are required to transpose the new Product Liability Directive into national law by 9 December 2026. Businesses should proactively assess their product liability exposure, particularly concerning digital and AI-enabled products, and implement necessary compliance measures.