Software developers, artificial intelligence providers, and connected device manufacturers face expanded liability risks across the European Union following updates to the product liability framework, according to litigation experts Sibylle Schumacher and Lara Bruchhausen at Pinsent Masons. Businesses must adapt to stricter evidentiary rules and broader categories of compensable damage before national implementation deadlines take effect.
EU Product Liability Directive Expands to Software and AI Systems
The revised EU product liability directive updates decades-old regulations to cover modern digital products, including software and artificial intelligence systems. According to Pinsent Masons litigation experts Sibylle Schumacher and Lara Bruchhausen, connected devices that were previously outside the scope of older liability frameworks now fall directly under EU rules. The updated directive also expands the range of economic operators who can be held liable, explicitly including online platforms and importers alongside traditional manufacturers.
Pro Tip: Companies manufacturing, importing, or distributing software, AI-enabled products, or connected devices into the EU market should immediately audit their product portfolios to assess potential exposure under the expanded rules.
Germany Advances National Implementation via Draft Legislation
Member states face a December implementation deadline to transpose the directive into national law. In Germany, the Federal Ministry of Justice (BMJ) has already initiated the legislative process by publishing a draft bill known as the ‘Gesetz zur Modernisierung des Produkthaftungsrechts’ (Act on the Modernisation of Product Liability Law). According to Sibylle Schumacher, businesses operating in or exporting to Germany should monitor the progress of this draft bill closely to determine what adjustments are needed for existing compliance frameworks.
New Evidentiary Rules and Court-Ordered Disclosure Standards
The German draft legislation details how a claimant-friendly evidentiary regime will operate in practice. Once a claimant establishes the plausibility of a claim, courts may order businesses to disclose relevant evidence in their possession. According to Lara Bruchhausen, failing to comply with a court-ordered disclosure can trigger a statutory presumption of product defectiveness without the claimant needing to prove it. Furthermore, where technical or scientific complexity makes proof excessively difficult, courts may presume both defect and causation.
Did You Know? Under the expanded definition of compensable damage in the new framework, injured parties can seek compensation for data loss and psychological harm alongside physical injuries and property damage.
Compliance Strategies for Software and AI Manufacturers
To mitigate rising litigation risks across the product lifecycle, businesses must review their supply chain contracts, distribution agreements, and insurance arrangements. According to Sibylle Schumacher, firms may require new internal processes to identify, organize, and preserve relevant product documentation—including development records, safety testing reports, and risk assessments—that could become subject to court-ordered disclosure. Companies are also advised to review product recall and incident response procedures alongside internal quality assurance and training.
Frequently Asked Questions
When is the deadline to implement the revised EU product liability directive?
Member states have until December 9 to transpose the directive into national law.
Which new products are covered under the updated directive?
The updated directive extends liability to software, artificial intelligence systems, digital products, and connected devices that were largely excluded from previous regulations.
What happens if a company fails to comply with a court-ordered disclosure?
According to Lara Bruchhausen, failing to comply with a court-ordered disclosure risks having defectiveness presumed against the defendant without the claimant needing to prove it.
What new categories of damage are now compensable?
The definition of damage has been expanded to include data loss and psychological harm.
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