Earlier this month the Law Commission published its consultation paper on product liability reform. The paper proposes to modernise the Consumer Protection Act 1987 (CPA) for the digital age, bringing digital technologies such as artificial intelligence, social media and video games into scope among a raft of other proposals. The European Union recently conducted its own product liability review, which resulted in the Product Liability Directive 2024/2853. While the consultation paper has clearly taken inspiration from Europe, there are some important differences.
A common thread behind the introduction of the EU’s PLD and the consultation paper is the argument that the existing frameworks are no longer fit for purpose. The Law Commission expressly acknowledges that concern is driven in part by the introduction of new digital technologies since the introduction of the PLD and CPA in the 1980s. However, not all of the proposed changes are responsive to these technologies. Some of the most impactful proposals will make it easier for consumers to bring claims and reflect concerns that the current regime favors defendants over claimants.
The key proposals include expanding the definition of 'product' to include software such as social media, video games and AI systems, regardless of how they are supplied. Unlike under the directive, there is a much clearer focus on social media with detailed consideration of the design components and features of social media and other online platforms. This is particularly noteworthy and reflects an attempt to address harms associated with digital platform design which the Law Commission says are not currently covered by online safety regulation (such as the Online Safety Act 2023, which doesn’t confer private rights of action and a route to compensation) and is supported by recent social media US litigation.
The proposals also include introducing rebuttable presumptions of fact for defectiveness and causation where claimants face exceptional evidentiary difficulties. A key difference with the PLD is a proposed scheme whereby the defendant can either rebut the presumption of defect (risking full liability) or accept the alleged defect (at which point recoverable damages would start at 50% of what would otherwise be recoverable), with views sought on the extent of the presumption.
Clarifying when compensation may be available for psychiatric illness caused by defective products (this includes explicit consideration of 'indirect victims', who are not addressed under the PLD), and expanding potential defendants to include online marketplaces, fulfillment service providers and authorised representatives of non-UK businesses (this has potential to go further than the PLD, where online marketplaces are not in scope), are also featured in the proposals.
Further proposals include:
- Simplifying and clarifying the law on what makes a product defective, using seven non-exhaustive principles including cyber security, AI self-learning, inadequate warnings, avoidable risk, disproportionate risk, and post-supply updates.
- Requiring a minimum threshold of material harm for personal injury claims, allowing compensation for loss or damage to data (with a reduction for data or property used partially for work), and removing the £275 threshold for property damage.
- Retaining the key defenses for businesses, including the development risks defense, while adapting them to the digital age.
Given the broad scope of these changes, it is important to ask whether they are necessary. We consider two of the core proposals to make the case that reform is not needed.
A common thread between the PLD and consultation paper is the argument that the current regimes are 'no longer fit for purpose'. Part of the rationale is that new digital technologies do not come within the original definition of 'product', so are out of scope of statutory claims. However, the consultation paper acknowledges there has been a lack of case law on this issue. This is not an argument for reform. A lack of case law merely indicates a lack of underlying claims. To the extent there are claims, parties should explore whether they can be brought under the current law before pushing for a new law to be introduced.
The EU now has rebuttable presumptions for both defect and causation, and the UK is consulting on the approach. A key justification for shifting the evidential burden is equality of arms. The Law Commission refers to reports of the challenges that consumers face making out their claims in technically complex cases. They allegedly do not have the relevant expertise, or the resources to recruit appropriate experts. If that is indeed the case, it is an argument to improve access to justice, not to change evidential rules. If these changes are introduced, they will encourage unmeritorious claims as well as driving new claims relating to social media harms. That would increase the cost of doing business in the UK and could clog up the courts.
The consultation runs until 14 January 2027. We encourage all readers to submit their views on these important changes.
Katie Chandler and Jamie Humphreys are partners at Winston Taylor
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