Product Liability Reform: Proposed Expansion of England and Wales Regime

Law Commission Consultation on Product Liability: What this could mean for business

On 8 October 2026, the Law Commission of England and Wales published its consultation paper proposing wide-ranging reforms to the product liability regime. If enacted, the proposals would expand the products, range of defendants and forms of damage within scope, ease some evidential barriers for claimants and increase product liability exposure and risk-management requirements.

The Law Commission product liability review project began in September 2025, following a remit from the Department for Business and Trade to consider Part 1 of the Consumer Protection Act 1987, which sets out the civil product liability regime in England and Wales. Stakeholders submitted initial scoping questionnaires by 31 December 2025, and the Law Commission team also conducted a series of in person engagements. 

For businesses, the most significant proposals include extending strict liability to software, AI and certain online-platform features; widening the range of potential defendants; and lengthening or restarting long-stop periods in certain cases.

1. Context and timetable

The 246-page consultation paper contains a comprehensive analysis of current product liability statute and case law, including references to the position in the EU, USA and Australia, and citation of extensive academic articles.  The reporting format is ‘key provisional proposals for reform’, with ideas summarised in the 62 consultation questions (many of which contain multiple sub-elements) upon which stakeholder views are sought. Further details of the project and a summary of the proposals are available from the Law Commission. The consultation closes on 14 January 2027.

The Law Commission says its proposals rest on three principles:

• updating the law for emerging technologies;
• delivering a "fair apportionment of risk";
• making the law fair, modern, simple and cost-effective. 

The Commission also proposes a new statutory purpose for what will be the amended CPA, articulated through three propositions:

• A fair apportionment of the risks inherent in products.
• Allocation of those risks, so far as appropriate, to those who create, control, or benefit from them, and by ensuring that persons who suffer damage can obtain effective compensation without needing to prove fault.
• Seeking, where consistent with that fair allocation of risk, to mitigate evidential difficulties that might otherwise undermine its operation.

The business community may question whether these proposals would indeed result in a ‘fair allocation’ of risk if they are enacted.  

2. The influence of the EU Product Liability Directive

Many of the consultation's suggested reforms broadly align with the new EU Product Liability Directive 2024/2853 (PLD). Commentators have observed that as this EU legislation introduces untested and uncertain concepts and widens the conditions for liability, it risks imposing significant new administrative, insurance and litigation costs on businesses.

With further details below, the Law Commission’s similar proposals include a broader definition of ‘product’ and bring design features of social media and other online platforms (that may include gaming) within scope. It adds a new category of "Core Participants" as potential defendants and sets out seven principles for assessing defect together with a novel presumption of defect under a risk-sharing mechanism where the claimant faces exceptional evidential difficulties. Unlike the PLD, the proposals do not adopt a concept of "related services" liability. To assist with comparison of the two regimes, the consultation contains a detailed convergence/divergence chart of the proposals versus the PLD.

Under the Windsor Framework, the PLD must be implemented in Northern Ireland by 9 December 2026, potentially leaving businesses supplying across the UK to navigate two regimes. 

3. Key proposals

3.1 Definition of "product" and "supply" (Chapter 2)

Listed below are the main categories of the extension of what is a "product" beyond physical goods.  Their inclusion would substantially enlarge the range of activities capable of attracting strict liability. The proposal creates entirely new classes of potential claims and defendants by bringing within scope categories of technology that historically have sat outside the traditional product liability framework.

Software and AI

Software should be covered however it is supplied, including cloud-downloaded, standalone, and software-as-a-service. There is no express exclusion for open-source software, though it will be exempt if it is not made available commercially. The term "software" itself is not defined. Instead, the Law Commission seeks views on whether the core features should be code plus the resulting functionality, or code alone.

It is proposed that AI should be treated as a product, though the Consultation does not propose a fixed statutory definition. It instead it puts forward a set of four core features that could define an “AI system”. Summarising, these include that it operates on a machine, it generates outputs or is general purpose AI, it is developed using techniques such as machine learning and logic- and knowledge-based techniques, and it may or may not keep learning after deployment.

The Law Commission accepts that developers may face more exposure and higher costs passed on to consumers but says this does not justify excluding software or AI. 

Social media and online platforms

Going further than the terms of the PLD and rejecting the notion that such platforms are better categorised as ‘services’, the consultation proposes that the design components and features of social media and other online platforms should be treated as "products". It adopts a broad definition of "online platform" in which context gaming platforms are referenced. Examples of features include algorithms, infinite scroll, autoplay, “likes”, follower counts, personalised notifications, parental controls and age verification tools. In this context the paper draws on US social media cases, particularly the well-publicised California “addiction” cases. 

Residual "catch-all" provision

In the context of ‘future proofing’ the law, there is a proposal for a residual provision within the definition of “product” to incorporate any other thing (digital or otherwise) that is designed or developed to perform a specific function for users, irrespective of how it is supplied or made available.

“Related services” 

The Law Commission proposes not to adopt the PLD’s "related service" concept (covering e.g. a smart fridge that relies on a temperature-control service) and to exclude services that are interconnected with, or needed for, a product to function. 

Supply

A product would be treated as "supplied" however it is delivered, including intangibly. It also proposes that a product counts as supplied even where the user has paid nothing. 

3.2  Persons liable (Chapter 3)

The Law Commission considers retaining the categories of persons currently liable under the CPA but proposes several extensions to widen the ambit of prospective defendants. A similar hierarchy of defendants is proposed, with certain entities only in line where other more proximate defendants cannot be identified (we use the term ‘fallback’):

• Developers: extending the definition of "producer" to the person who developed the product.
• Component producers: making both the finished-product producer and the component producer potentially liable where the component was integrated within the finished-product producer's control.
• Modifiers: imposing liability for substantial modification and treating outside modifiers as producers. This category considers the concept of ‘producer control’
• Fulfilment service providers: would be included as a fallback defendant where no UK producer, own-brander, importer or authorised representative can be identified.
• "Core Participants": this new category, designed to capture online marketplaces, would be liable as a fallback defendant. The criteria include playing a "significant role" in making the product available, financial benefit, and "direct or indirect control over, or a decisive ability to influence" manufacturing or distribution.
• Suppliers: a fallback defendant with an expanded identification duty.
• Authorised Representatives: a proposal to impose liability on the UK authorised representative of a non-UK based producer, own-brander, importer, fulfilment service provider or Core Participant.

3.3 Defect and causation (Chapter 4)

The Law Commission says that its proposals seek to preserve the flexibility of the definition of defect, thereby allowing it to adapt to a wide and evolving range of products, while providing clearer and more structured guidance on its application. 

Alternative principles for defect 

Without providing specific definition for what constitutes a ‘defect’, the Consultation proposes a non-exhaustive list of seven principles for judging the entitled level of safety a product must meet. These relate to expected use, information, warnings, presentation of risk, avoidability of risk, a risk/benefit analysis and a comparison with available alternatives. A product would be defective "if any one of the principles is satisfied". It asks whether where one of the proposed principles is satisfied, should it nevertheless be open to a defendant to show that the product met the entitled level of safety.

New circumstances relevant to defect 

The Law Commission also proposes adding “relevant circumstances” to the defect test, in summary: 

• Marketing and warnings
• Intended users
• Performance of safety function
• Learning and adaptation
• Product interoperability
• Cybersecurity compliance
• Timing of supply/control
• Ongoing producer control and updates.

Rebuttable presumption of fact based on information asymmetry

The Law Commission seeks views on whether a presumption in relation to factual issues relevant to defect or causation should arise where there is an "asymmetry of information" in the defendant's favour.

A rebuttable presumption of defect and sharing of the burden of risk 

In a novel departure, the Law Commission proposes a rebuttable presumption of defect for exceptional cases where it is impossible to determine whether a product is defective because the necessary evidence does not exist or cannot be obtained. The presumption would apply only where the claimant can satisfy a number of threshold requirements, including showing an arguable case, non-fanciful evidence, exceptional evidential difficulties and a risk that is not socially accepted.

Where those requirements are met, the defendant must either rebut the presumption or accept the alleged defect. If the defect is accepted, the court could share the loss between the parties, starting from an award of 50% of the damages that would have been recoverable had defect been proven. If the defendant seeks to rebut the presumption but fails, damages would be awarded as though defect had been fully established, without any reduction through the risk-sharing mechanism.

3.4 Damage (Chapter 5)

In a further expansionist approach, the Law Commission proposes:

• Personal injury threshold: a minimum threshold of material harm before a personal injury claim can be brought.
• Preventive costs: losses incurred in measures needed to avert a risk of personal injury would be recoverable.
• Psychiatric harm: recognised psychiatric illness would be recoverable where it follows physical injury or physical imperilment, and in certain circumstances on a narrower basis where it occurs other than in such contexts. Psychiatric harm suffered by indirect victims may also be compensated. For both “the harm must fall within the natural range of reactions of a person of ordinary fortitude”.
• Property: any loss of or damage to property, including land, would be recoverable. Only property used exclusively for professional purposes would be excluded, and awards for mixed-use property would be reduced.
• Data: destruction and corruption of data would be recoverable, with the same exclusion for exclusively professional data. The Law Commission also asks whether loss of access to data should count.
• £275 threshold: the minimum value for property damage claims would be removed. 

3.5 Defences, limitation and the long-stop (Chapter 6)

Development risks defence: retained and clarified

The paper proposes keeping the defence and applying it to all products and industries. It accepts that the defence helps keep insurance costs down and that the courts already interpret it narrowly. It recognises the defence as necessary given that "other aspects of our consultation paper extend the scope of liability for businesses". 

"Defect did not exist at the relevant time" defence 

The Law Commission proposes that a producer cannot rely on this defence where it made the product defective after supply by modifying it, by authorising modifications, or by "failing to supply software updates or upgrades". 

Long-stop resets on substantial modification

Under the Law Commission's proposal, the 10-year long-stop would restart whenever a product is substantially modified (depending on who did the modification). The Law Commission acknowledges concerns that this could significantly extend potential liability for products that are repeatedly updated.

25-year long-stop for latent personal injury 

The consultation paper proposes extending the long-stop to 25 years where latency prevented proceedings within 10 years, matching the PLD. The paper acknowledges concerns that longer limitation periods, particularly when combined with the proposed long-stop reset mechanism, could create evidential difficulties, increase insurance uncertainty and extend the period during which businesses may face liability.

No-supply defence

The Law Commission proposes removing the "no supply to another" defence where a service provider makes a product for its own use that then causes harm while it provides a commercial or publicly funded service. The use of medical products by a healthcare provider as part of its service is given as an example. 

3.6 Practical issues (Chapter 7)

The Law Commission proposes that courts should be able to substitute a defendant after the long-stop has expired, including where the claimant sued the wrong company in a group. In the group case substitution would be permitted "unless it would be inequitable". This departs from the New Directive and from the CJEU's approach in Aventis Pasteur, which barred substitution after expiry except in limited circumstances. 

3.7 Cumulative impact and economic evidence (Chapter 8)

The Law Commission acknowledges that reform may increase compliance costs, insurance premiums and liability exposure, and seeks evidence on the impact of reform on businesses, insurers and SMEs.

4. Next steps for businesses

Consultation responses are due by 14 January 2027. Responses are to be filed via an online form. Those who respond will be listed in the consultation report that will be published, and what they say may be referenced. There are however various provisions for confidentiality of response content and for anonymous responses. 

 After considering the responses the Law Commission will publish a final report setting out its recommendations for reform. Publication is expected in late 2027, after which it will be for the Government to decide whether to take the recommendations forward.

While the consultation seeks to preserve safeguards for innovation, the practical effect of many proposals (if implemented) would be to increase the likelihood, number and potential value of product liability claims compared with the current CPA framework. 

While what has been presented remains at the proposal and feedback stage, given the breadth of the reforms it is important for businesses to respond to the consultation and set out concerns they may have with the proposal.

Article co-authored by Jordan O'Driscoll, Trainee Solicitor at CMS London.