New terms of reference for UK product liability reform project

On 8 December 2025, the UK Law Commission published its Terms of Reference (ToR) for its product liability law review, providing some further insight into the project. As we anticipated earlier in the year (see our earlier blog here), the scope of the project is broad and the trend may well be towards a more claimant-friendly regime, as in the EU. 

The case for reform: The ToR open by stating that the current regime, governed by the Consumer Protection Act (1987) (the CPA), “…is no longer fit for purpose…”. This is put more forcefully than in previous communications from the Law Commission.  Its view at this early stage appears to be that reform is not a question of “if” but “how”.

Clear echoes to the EU reforms: The ToR contain unmistakeable echoes throughout of the recent EU overhaul embodied in the new Product Liability Directive (EU) 2024/2853 (currently in its implementation phase in EU Member States - read more here):

Of particular interest, the Law Commission says it will consider whether: 

• the “burden of proof for claimants to bring a successful claim is too onerous” – could the Law Commission also be considering introducing so-called “rebuttable presumptions” as to defect and/or causation?
• the 10-year longstop should be extended for latent harms (no alternative time period is mentioned); and
• the definition of “producer” and the range of economic operators who can be liable need to be reformed.

However, there is no reference to the possibility of introducing psychological harm as a standalone category of compensable harm (as the EU has done). 

Strong emphasis on tech and AI: emerging technologies, including AI, are an explicit and prominent driver for the Law Commission’s proposition that the CPA is no longer fit for purpose. In particular, the Law Commission will consider whether:

• the definition of “product” requires reform to “accommodate the intangibility of digital technologies” and should be widened to include software;
• the definition of “defect” requires reform “to account for the nature of emerging technologies including AI”;
• products that are iteratively updated, such as some forms of software “pose any difficulties with the long-stop date”;
• “[g]iven that much software is capable of being updated over time” the state of the art defence may need amending “to account for the fact that some products can be updated iteratively”;
• the burden for claimants to bring a successful claim is “too onerous”, including whether the nature of emerging technologies, particularly AI “is such that it may be very difficult to show that some products are, or software is, defective”. Examples given include that “AI is opaque even to experts or AI developers”, and that “latent” defects may arise in emerging technologies; and
• the definition of “damage” needs to be reformed “to account for the types of harm caused by emerging technologies, such as AI”, including data destruction or corruption.

More positively, the ToR also state that, given the significance of emerging technologies, including AI, to the review, “promoting innovation and adoption of emerging technologies will be a consideration” within the review. 

Looking ahead

The Law Commission’s scoping questionnaire (available here) remains open until 31 December 2025. A formal consultation is expected during the second half of 2026, likely followed by a report with recommendations to the Government in late 2026 or early 2027. We responded to that questionnaire last month, outlining our concerns that overly dramatic, pro-claimant reforms would impose significant burdens on businesses and make the UK a less attractive place for investment and innovation.