The Law Commission has launched a consultation on proposals for a major overhaul of the product liability regime in England and Wales.
The consultation follows the Law Commission publishing its terms of reference for a review of the regime (discussed here) in which it stated that the Consumer Protection Act 1987 (CPA) is “no longer fit for purpose”. Most notably, the Commission observed that the Act was primarily designed with tangible goods in mind, leaving considerable uncertainty about its application to digital technologies such as software and AI.
The consultation develops these concerns, warning that the existing regime “may leave injured consumers without adequate protection, create uncertainty for manufacturers and other liable parties as to their potential liability, and expose insurers to unforeseen risks”.
Against that background, the consultation is consulting on a range of significant reforms, including:
- A wider definition of ‘product’ to include software and AI systems, as well as the design components and features of social media and other online platforms, such as recommender algorithms;
- Expanding the definition of ‘supply’ so that a product is treated as being supplied regardless of the means of delivery, and therefore including digital downloads;
- Introducing new categories of potentially liable persons to reflect increasingly complex supply chains;
- Creating a structured framework for determining what constitutes a ‘defect’, and introducing rebuttable presumptions of fact to reduce the burden on claimants in establishing defect and causation;
- A new framework for the compensation of psychiatric harm; and
- Recognising the destruction and corruption of data as compensable damage.
The consultation closes on 14 January 2027 and can be found here. A summary paper can also be found here.