Modernization of Product Liability Law: New Businesses Affected and a Significant Expansion of Liability Risks
Expanded Scope of Application
The draft law provides for a significant expansion of the scope of application. In the future, liability will no longer be limited to the traditional manufacturer, the quasi-manufacturer, and the importer. Liability will be extended to other actors along the supply chain. If the manufacturer is not based in the EU, agents, fulfillment service providers, or online platforms may also be held liable instead.
The circle of liable parties is also expanding for complex products: In the future, component manufacturers or providers of “related services” (e.g., product-related software) will be liable. Until now, this applied only to manufacturers of distinct product parts.
This expansion goes hand in hand with a new definition of “product.” In the future, software in all forms will also explicitly be considered a product. The specifics of this have been controversial up to now. The only exception is free and open-source software, provided it is “developed or made available outside of a business activity.” However, the scope of this exception remains unclear and is likely to be a source of dispute. In addition, digital design documents (e.g., CAD files) will also be classified as products in the future.
The definition of “damage” is also being expanded. In addition to personal injury and property damage, it will now also include the destruction or damage of data not used for professional purposes. At the same time, the definition of “defect” is being adjusted to specifically cover risks arising from the increasing integration of software and traditional products.
Simplifications in enforcement for claimants
The legislature aims to further facilitate the enforcement of claims. Product liability law already provides for strict liability: the manufacturer is liable as soon as a defective product causes damage—even if no additional culpable conduct on the manufacturer’s part can be proven.
Until now, however, injured parties had to prove the facts supporting their claims in court, which often posed a significant hurdle. This is where the draft bill comes in: In the future, rules easing the burden of proof and presumption rules will apply in favor of claimants, particularly where otherwise costly expert opinions would be required or where there are violations of product safety regulations.
For manufacturers, this means a further deterioration of their already difficult procedural starting position.
Manufacturer’s Duty to Disclose Evidence
The draft also contains a significant innovation in procedural law: Claimants will in future be able to demand that the manufacturer disclose relevant evidence during court proceedings. This evidence must be provided in a comprehensible and accessible form, which entails additional effort, particularly in the case of extensive data sets.
Such a mechanism has previously been known primarily from U.S. law. Manufacturers face the risk of having to disclose internal documents and sensitive information. In addition to disadvantages in the specific proceedings, this can also result in significant economic consequences, as further disclosure to third parties cannot be ruled out.
Although the law provides for safeguards for trade secrets, this is contingent upon the relevant protective measures having already been implemented within the company. Companies should therefore ensure in advance that their trade secrets actually meet the requirements for legal protection—otherwise, they face the risk of extensive disclosure during liability proceedings.
Unlimited Liability, Elimination of the Materiality Threshold
The draft bill also removes the previous liability cap of 85 million euros for personal injury. In the future, unlimited liability is possible in this regard.
At the same time, the previous deductible of 500 euros for property damage is eliminated. Manufacturers are thus liable from the very first euro of damage, unlike previously. In this regard, an increase in claims for damages is to be expected.
Transitional Provision and Timeline
The new law is scheduled to take effect on December 9, 2026. For products placed on the market before this effective date, the previous law will continue to apply.
This date is of considerable importance for companies because the potentially more favorable old legal situation applies to existing products. At the same time, it is advisable to already take the new legal situation into account for products whose market launch is planned only after the effective date.
Conclusion and Summary
The draft law introduces significant new liability risks for companies. At the same time, the scope of potentially liable parties is significantly expanded. In particular, companies that have had little to do with product liability to date—such as software providers and operators of online marketplaces—are also affected.
Companies should pay particular attention to the transitional provisions and adapt to the new requirements at an early stage. This includes, above all, consistent compliance with product safety regulations and ensuring effective protection of trade secrets.
VOELKER supports you both in the proactive implementation of the new requirements and in specific liability cases.