The Law Commission of England and Wales opened a consultation on reform of the product liability regime on 8 October 2026. The consultation paper sets out provisional proposals and runs until 14 January 2027. The project is sponsored by the Department for Business, Innovation, Science and Trade, and its terms of reference were published on 8 December 2025. No legislation has been introduced at this stage.
The regime under review is Part 1 of the Consumer Protection Act 1987. The Commission provisionally proposes to widen the definition of a product beyond tangible items, so that software and AI systems count as products in their own right, whether they are embedded in a device, downloaded, or accessed remotely. Design components and features of social media and other online platforms, including recommendation algorithms, would come within scope, and liability would extend to online marketplaces.
The proposals would reach AI developers and model providers whose systems are supplied into England and Wales, vendors of software delivered on a subscription or remote-access basis, operators of social media and other platforms whose recommender systems shape what users see, and online marketplaces that list third-party goods. Product liability insurers would be pricing exposure to a class of defendants that the 1987 Act does not currently capture.
The consultation paper keeps the development risks defence and adapts it to digital products. Where a claimant faces exceptional difficulty obtaining evidence, a rebuttable presumption of defectiveness would apply, and a defendant that accepts the presumption would pay partial compensation under a risk-sharing mechanism. The paper also proposes clearer rules on compensation for psychiatric illness, including for a person who witnesses harm to or the death of a loved one. Responses are due by 14 January 2027.
Licentium advises technology and digital asset businesses on regulatory exposure in the United Kingdom and the European Union. Work we undertake includes consultation responses, product liability risk mapping for software and AI systems, and contractual allocation of liability across supply chains.
Source: Law Commission, Product liability project, England and Wales