Published: 23 October 2026
Authors: Claire Kershaw, Paul Eccles, Luke Coleborn, Nick Sheerin

The Law Commission has published a consultation on significant proposed reforms to the UK’s product liability regime under the Consumer Protection Act 1987 (the CPA) .

Introduction

Acknowledging that the law has “not kept pace” with how modern technologies have “transformed everyday life”, the Commission’s central proposal is to expand the definition of “product” to bring software, AI systems and aspects of social media/other online platforms within scope. Amongst other things, the definition of “supply” and categories of potentially liable persons will also be expanded to reflect digital delivery methods and the increasing complexity of modern supply chains.

The consultation follows in the footsteps of the EU’s new Product Liability Directive and wider consideration of liability for AI-related harm by the UK Jurisdiction Taskforce, both of which were previous explored in Product liability redefined: EU Directive reshapes digital risk and New tech, old law: UKJT confirms its position on liability for AI harm. This sits alongside rising public sentiment around the risks of certain technologies, partly reflected in the enactment of the Online Security Act 2023 and the subject of developing case law particularly in the US.

The Commission describes the proposals as seeking to strike an appropriate balance between the interests of consumers and businesses, by providing consumers with a straightforward route to compensation while giving businesses legal certainty to manage the risk of liability for harm.

Interested stakeholders should consider responding to the consultation, which closes on 14 January 2027, as soon as possible.

Summary of key proposals

Definition of “product” to include software, AI and social media/online platforms

• the Commission proposes to expand the definition of “product” to include software and AI systems, identifying some core features of each to help clarify boundaries (for example, in relation to AI, the possibility of self-learning after deployment). The case for this is described as particularly strong given the evidential difficulties claimants face in establishing how and why these technologies may have caused harm – the type of complexity the CPA’s strict liability regime is intended to address
• design components and features of social media and other online platforms would also be brought within scope, giving individuals the right to seek compensation for harm suffered (which the Online Safety Act 2023 does not provide). Features identified by the Commission include recommender algorithms, ‘infinite scroll’, personal notifications, age verification processes and illegal/harmful content reporting mechanisms
• in order to “future-proof” the definition of “product”, the Commission proposes that it should extend to 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.

Meaning of “supply” to capture digital delivery

• the Commission proposes this also be expanded to include (i) any means of delivery (such as digital download) and (ii) circumstances where products are made available for no consideration at the point of use, but in the course of business and/or with a view to profit - for example a freely available social media platform which generates revenue from advertising and/or users’ personal data.

Potentially liable persons to include tech developers, online marketplaces and fulfilment service providers

• the definition of “producer” would be expanded to include developers of software, AI systems and design components/features of online platforms (which themselves would fall within the expanded definition of “product” as noted above)
• greater clarity would be provided around the allocation of liability (i) as between producers of component parts and producers of finished products, to reflect the range of circumstances in which a component may be integrated, and (ii) as between original producers and persons carrying out “substantial modifications”
• the categories of other person who may be liable would also be expanded to include fulfilment service providers (such as warehousing, packaging and dispatching), “core participants” including online marketplaces, and UK authorised representatives. The existing approach to supplier liability would be retained, with suppliers able to avoid liability by reference to the expanded list of ‘primarily’ liable persons.

Greater clarity on what constitutes a “defect”

• the Commission aims to retain the breadth and flexibility of the current approach (based on an ‘entitled level of safety’), while providing greater clarity on its application through:

  • a new non-exhaustive list of principles for assessing the entitled level of safety, such as presentation of risk, and the relationship between risks and benefits
  • supplementing the existing list of relevant circumstances to which a court must have regard, for example to include the product’s ability to learn/acquire new features after supply, and the reasonably foreseeable effects of interaction with other products
  • clarifying and elaborating the stated purpose of the CPA (currently only expressed in terms of compliance with the EU’s original product liability directive of 1985)

Easing evidential challenges for claimants in proving defect and causation

• noting difficulties around the evidential burden on claimants – likely to be compounded by the increasingly digital/AI-driven range of in-scope products – the Commission is considering introducing:

  • certain rebuttable presumptions of fact relevant to defect and/or causation, where there is an asymmetry of information and it would be fair for the defendant to bear the burden of rebutting
  • a rebuttable presumption of defect, subject to strict thresholds: namely that it is arguable the product is defective, the facts relied on are not fanciful, the claimants faces exceptional evidential difficulties, and the risk of harm is not so widely known as to be socially accepted. The defendant could then either accept the alleged defect or try to rebut the presumption, with consequential guidance for the court on assessing any damages as may be awarded thereafter.

Wide-ranging framework for assessing compensable psychiatric harm

• the Commission proposes a new framework to clarify the (highly topical and emotive) issue of the circumstances in which psychiatric harm may be compensable as a form of personal injury, distinguishing between direct and indirect victims of such harm

• for direct victims:

  • where the psychiatric harm results from physical injury/impairment, it would be compensable where it amounts to a medically ”recognisable” psychiatric illness
  • where psychiatric harm is the sole injury, as well as being medically recognisable, the harm must also “fall within the natural range of reactions of a person of ordinary fortitude”.

• for indirect victims:

  • the psychiatric harm must be medically recognisable and result from the physical and/or psychiatric injury, physical imperilment or death of a direct victim
  • the harm suffered must fall within the natural range of reactions of a person of ordinary fortitude, having regard to all the relevant circumstances
  • the indirect victim must have a “close tie of love and affection” with the direct victim.

• in principle therefore this new framework would extend, for example, not only to a child who (as a direct victim) develops a psychiatric condition as a result of a defective social media platform, but also to a parent who (as an indirect victim) also suffers psychiatric harm as a result of the psychiatric injury to their child

Compensable property damage extended to mixed private/professional use property

• the circumstances in which damage to property may be compensable would be expanded to include damage to property used for both private and professional purposes (reflecting flexible/home-working arrangements), and destruction or corruption of data (including data used for mixed private and professional purposes)

Extended 25-year ‘long-stop’ for latent harm claims and modifications to other defences

• currently a claimant must bring a claim within three years of either (i) the date on which the damage arose or (ii) the date on which the claimant acquired the relevant knowledge of the damage – whichever is the later. This is subject to a “long-stop” of 10 years from the “relevant time”, usually the time of supply

• the Commission makes two proposals in relation to the long-stop period:

  • substantial modifications: Where a product has been substantially modified after supply (for example through software upgrades), the 10-year long-stop would reset. If the modification occurs within the original producer’s control, time would restart from when the modified product is made available. If it is modified outside the original producer’s control, time for the original producer would not restart, but time for the modifier would (re)start from the point of supply
  • latent injuries: The long-stop period would be extended to 25 years for latent personal injury claims, where it was not possible for the claimant to initiate proceedings within the 10-year period due to the latent nature of the injury – to be assessed by reference to criteria “inspired” by s.14A of the Limitation Act 1980, which provides a special time limit for negligence claims where facts relevant to the cause of action were not known when the cause of action accrued.

• the Commission also proposes modifications to other existing defences, in particular:

  • the ‘no supply to another’ defence would not be available where a defective product is used in the provision of commercial or publicly funded services
  • the ‘defect arose after supply’ defence would not be available to a defendant who caused the defect post-supply, for example by introducing a faulty software update
  • the ‘development risks’ defence should involve an objective assessment of the state of the art and, where applicable, should operate to reflect a producer’s ongoing role in a product’s safety after supply, again for example through software updates.

Shoosmiths comment

If enacted, the Law Commission’s proposed reforms would represent a ‘once-in-a-generation’ shift in the UK’s product liability landscape.

The core proposals around the definitions of product, supply, and potentially liable persons, would vastly expand the scope of the regime to a huge range of products and businesses, across multiple sectors, which were previously unaffected. The potential consequences of being in scope have an equally ‘long tail’, not least given the concept of indirect victims of psychiatric harm, and the extended 25-year long-stop for latent harm.

While they are of course subject to consultation, given the EU’s recent action in this area, other relevant domestic legislative developments (such as the Online Safety Act 2023), and the acknowledgement by the Commission that the law has been out of date for some time, it seems relatively likely that substantial reforms will indeed be pursued, albeit there will doubtless be a process of evolution before any resulting legislation is brought in.

It is worth noting in particular that some aspects of the Law Commission’s proposals arguably go further than the new EU Directive. For example, the Directive makes no express reference to social media platforms or indirect victims of psychiatric harm, although its application in those respects may be a matter of interpretation and/or implementation by Member States. The treatment of fulfilment service provider and online marketplaces also differs as between the Directive and the Commission’s proposals. While the Commission seeks to explain its reasons for these areas of divergence, they could prove obvious ‘sticking points’ in consultation responses.

Stakeholders may also be aware that earlier this year the Law Commission issued an initial scoping questionnaire as part of its new consumer class actions project, looking at whether the way consumer laws are enforced could be strengthened through the introduction of a ‘purpose-built’ consumer class actions regime. It would be advisable for businesses to monitor developments on this front and consider how they may interact with the present proposals for product liability.

The consultation closes on 14 January 2027. If you would like to discuss how the proposals could impact you or your business, don’t hesitate to reach out to your usual Shoosmiths contact(s).