The Law Commission has proposed a major overhaul of product liability law to bring the legal framework into line with the realities of digital products, artificial intelligence and modern online commerce.
Why is product liability law being reviewed?
The existing product liability regime dates back to the Consumer Protection Act 1987. The framework was designed to give consumers a straightforward route to compensation where defective products cause harm, while also supporting businesses and allowing innovation and economic growth.
However, the technology and commercial environment has changed significantly since the legislation was introduced. Consumers now routinely purchase and use products containing software, connected technology and digital functionality, while artificial intelligence is increasingly incorporated into products and services.
The Law Commission’s review considers whether the existing regime remains fit for purpose in that environment. Its project examines product liability law particularly in relation to digital products and emerging technologies such as AI, with the aim of determining whether reform is required.
The Law Commission has also identified concerns that the current framework can sometimes make it difficult for consumers to bring successful claims for compensation. At the same time, reform needs to provide businesses with sufficient legal certainty to manage liability risks and continue developing new products.
What is the Law Commission proposing?
The consultation considers changes intended to make product liability law clearer, fairer and more effective in the digital age. The proposals examine how responsibility should operate where products are increasingly dependent on software, digital services and complex supply chains.
| Issue | Proposed approach |
|---|---|
| Digital products | Consider how product liability rules should apply to products whose functionality depends on software or digital components. |
| Artificial intelligence | Examine how existing liability concepts should operate where AI forms part of a product or affects how a product performs. |
| Evidence | Consider whether consumers face unreasonable difficulties proving that a product was defective and caused the relevant harm. |
| Online marketplaces | Assess how the growth of online purchasing affects the allocation of responsibility within modern supply chains. |
| Business certainty | Seek a clearer framework that allows businesses to understand and manage their potential exposure to liability. |
The Law Commission’s wider objective is to determine whether the balance between consumer protection and support for business remains appropriate. Where the existing regime creates gaps or uncertainty, the consultation considers whether targeted reform is needed.
How do digital products change liability?
Traditional product liability law was developed around physical products. Modern products can be considerably more complex. A physical device may depend on software, receive updates after it has been sold, communicate with other systems or rely on digital functionality that changes over time.
That creates questions about when a product should be regarded as defective and which part of a supply chain should bear responsibility where a defect involves digital technology.
The Law Commission’s review therefore considers whether the existing legal concepts can deal adequately with products that combine physical and digital elements. The aim is not simply to extend old concepts mechanically, but to consider whether the framework provides consumers with an effective route to compensation while remaining workable for businesses.
Product liability law must operate in a market where the meaning of a “product” increasingly extends beyond a physical object.
The issue is particularly significant because digital components can continue to change after a product reaches the consumer. Software updates, connected services and other forms of post-sale functionality can affect the way a product operates throughout its life.
What role does AI play?
Artificial intelligence presents additional challenges because AI systems can behave in ways that are substantially influenced by data, software and system design. The Law Commission’s review specifically considers emerging technologies such as AI as part of its assessment of whether the current product liability regime remains fit for purpose.
The legal questions can become particularly difficult where an AI-enabled product causes harm and the consumer needs to establish why the product was defective. Understanding the relationship between the product, its software, the AI system and the decisions or outputs generated by that system may require access to technical evidence that is not readily available to an ordinary consumer.
The consultation therefore considers whether changes are required to ensure that the law continues to provide an effective means of obtaining compensation as products become more technologically sophisticated.
What about online marketplaces?
The way consumers purchase products has also changed substantially since the current product liability regime was introduced. Online marketplaces now form an important part of the modern supply chain, connecting consumers with sellers and manufacturers across different jurisdictions.
This development raises questions about how responsibility should be allocated when a defective product is purchased through an online platform. The Law Commission’s project therefore considers the impact of online platforms and the changing nature of consumer purchasing on the operation of product liability law.
For consumers, the central issue is whether the legal framework continues to provide a practical route to compensation when something goes wrong. For businesses and platforms, the issue is how liability should be allocated fairly without creating unnecessary barriers to innovation or trade.
What do the proposals mean for businesses?
The review is not focused solely on expanding consumer rights. The Law Commission has said that the existing regime was intended to balance the interests of consumers seeking compensation with the interests of businesses in supporting innovation and growth.
That balance remains central to the reform project. Businesses need to understand when they may be liable for harm caused by products, particularly where responsibility is divided among manufacturers, software developers, suppliers, distributors and other participants in a digital supply chain.
A clearer legal framework could provide businesses with greater certainty when assessing product risks, designing products and managing insurance and compliance arrangements. At the same time, the consumer protection objective requires the law to remain effective where defective products cause genuine harm.
The Law Commission’s review therefore seeks to establish whether reform can improve the operation of the regime without undermining innovation or imposing disproportionate burdens on businesses.
What happens next?
The Law Commission published its product liability consultation material on 8 October 2026. The consultation provides an opportunity for stakeholders, including businesses, legal professionals, consumer representatives and other interested parties, to respond to the proposals.
- The Consumer Protection Act 1987 establishes the existing statutory product liability framework.
- Substantive work on the Law Commission’s product liability review begins.
- The Law Commission publishes its consultation material examining reform of product liability law for the digital age.
- Stakeholder responses and evidence will help inform the Law Commission’s consideration of possible reforms.
The proposals are not legislation at this stage. They form part of the Law Commission’s consultation and review process. Any eventual changes to the law would require the appropriate legislative process before becoming legally binding.
The review is therefore likely to be closely watched by solicitors advising manufacturers, technology companies, online platforms, insurers, retailers and consumers, particularly as the boundaries between physical products and digital services continue to develop.
Frequently asked questions
Why is the Law Commission reviewing product liability law?
The review examines whether the existing product liability regime remains suitable for modern products and technologies, particularly digital products and emerging technologies such as artificial intelligence.
Does the review concern only physical products?
No. A significant part of the review concerns the way digital technology, software and emerging technologies affect product liability. The Law Commission is considering whether the existing framework is sufficiently adaptable to these developments.
Are the proposed reforms already law?
No. The proposals form part of a Law Commission consultation. They are not, by themselves, changes to the law.
Why are online marketplaces relevant to product liability?
Online marketplaces have changed how consumers buy products and have introduced new relationships between consumers, sellers, manufacturers and platforms. The review considers whether the product liability framework adequately reflects those changes.
Could the reforms affect technology companies?
Potentially. The review specifically considers digital products and emerging technologies, including AI. Technology companies involved in designing, developing, supplying or operating products may therefore have an interest in the consultation.
What is the wider aim of the review?
The Law Commission is examining whether the law can provide consumers with an effective route to compensation for harm caused by defective products while also providing businesses with appropriate legal certainty and supporting innovation and growth.