[Home](/)/[Resources](/resources)/UK Product Liability Reform UKLegal guide # UK Product Liability Reform: What Connected Hardware and AI Product Makers Need to Know The UK's Consumer Protection Act 1987 was written for physical goods. The Law Commission has identified that software, AI systems, and connected devices with OTA updates sit uneasily within the current framework — creating liability gaps and uncertainty. Proposed reform would extend strict product liability explicitly to software-integrated and AI products, with significant implications for any hardware maker whose product relies on firmware, ML models, or cloud-connected features. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Fuk-product-liability-reform) At a glance Current law Consumer Protection Act 1987 Reform basis Law Commission 2022 report EU comparison EU PL Directive 2024 Status Pre-legislation (reform in progress) ## The current and reformed framework ### Current framework: Consumer Protection Act 1987 UK product liability is currently governed by Part I of the Consumer Protection Act 1987 (CPA 1987), which implements the 1985 EU Product Liability Directive. It imposes strict liability on producers for damage caused by defective products — meaning claimants do not need to prove negligence, only that the product was defective and caused the damage. The 'development risks' defence allows producers to escape liability if the state of scientific and technical knowledge at the time of supply made the defect undiscoverable. ### The problem with software and AI under the current rules CPA 1987 was designed for physical goods and does not straightforwardly apply to software, AI systems, or digital services. Courts and practitioners have long debated whether software is a 'product' under the Act, and whether an AI system that causes harm — for example, through a flawed output acted on by the user — creates product liability. The Law Commission's 2022 report on the topic identified significant uncertainty and argued the current framework leaves a liability gap for AI-integrated and software-defined products. ### Law Commission reform proposals The Law Commission recommended extending UK product liability to cover software and AI products, removing ambiguity about whether they are 'products' under the Act. Key proposals include: including software updates and AI model updates within product liability scope; clarifying that a digital product integrated into a physical product (e.g., a firmware-controlled medical device) makes the entire product subject to liability; and reconsidering the development risks defence in light of AI's ability to self-modify after deployment in ways the original developer could not anticipate. ### Implications for connected hardware makers For hardware makers, the practical implication of reform is that software and firmware defects that cause harm through a physical device will more clearly create product liability exposure — not just contract or negligence claims. OTA software updates that introduce defects after the device is placed on the market could be treated as a new product-liable event. Companies selling AI-assisted medical devices, safety-critical industrial controllers, or consumer products with machine learning components should review their product liability insurance and quality management processes in light of the reform direction. ## What to do now 01 Review your existing product liability insurance policy to understand whether software-related defects, firmware updates, and AI-generated outputs are covered — many existing policies were written with traditional physical product defects in mind. 02 Map which of your products contain software, AI components, or receive OTA firmware updates that could affect safety-related functions, as these are the highest-exposure categories under the proposed reformed framework. 03 Assess your quality management system for software-specific controls: how are software updates validated and tested before release? Do you have documented processes for identifying and containing software defects that reach deployed products? 04 Review your post-market surveillance programme to confirm you have mechanisms to detect software-caused incidents in the field and procedures to escalate them — the proposed reform increases the importance of active post-market monitoring. 05 Check your contractual position with component suppliers and software licensors: if a third-party software component causes a defect in your product, your indemnification and liability allocation with that supplier becomes critical under the reformed framework. 06 Monitor Government and Law Commission updates: reform requires primary legislation and is subject to parliamentary timetable; track the progress of any Product Safety and Liability Bill or amendment to CPA 1987 through Parliament. 07 For products sold in both GB and the EU, note that the EU has already enacted the new Product Liability Directive (2024) which explicitly covers AI and software — assess your EU and GB exposure under both frameworks simultaneously. ## Frequently asked questions ### Has the UK already changed its product liability law? As of mid-2026, the Law Commission's recommendations have not yet been enacted into legislation. The Government has acknowledged the reform need and it intersects with the broader product safety reform in the Product Safety and Metrology Bill. Hardware makers should treat reform as a 'when not if' direction of travel and prepare their quality and insurance positions accordingly, while operating under CPA 1987 in the interim. ### Does the EU's new Product Liability Directive affect UK companies? EU Directive 2024/2853 on product liability (which explicitly covers software and AI) applies to products placed on the EU market. UK companies selling into the EU are subject to EU product liability law for those sales — and the EU Directive's treatment of software and AI is more advanced than the current CPA 1987. UK companies with dual-market products should understand both frameworks and design their quality systems to satisfy the higher bar. ### What is the 'development risks' defence and how does it apply to AI? The development risks defence under CPA 1987 allows a producer to avoid liability if they can prove that the state of scientific and technical knowledge at the time of supply was not such that the defect could have been discovered. For AI systems that continue learning after deployment, this defence becomes complex — if the AI model's behaviour changes post-deployment due to its own learning, was the defect discoverable at the time of supply? The Law Commission identified this as a key gap the reform needs to address. ### Are importers liable under UK product liability law? Yes — under CPA 1987, importers who bring products into the UK (or EU, for EU law) from outside are treated as producers for liability purposes. This means a UK importer of connected hardware made outside the UK is strictly liable for defects in that hardware on the same basis as the original manufacturer, making product liability a significant consideration in UK import and distribution agreements. **Disclaimer:** Educational resource only. This is not legal advice. Consult a qualified UK product liability solicitor for advice on your specific product exposure and insurance needs. 🇬🇧 UK roadmap for your product Every standard, document, and test that applies — free, no account required. See your free roadmap[ Want an expert to take your product through 🇬🇧 UK compliance for you? One consultant from Krono's compliance team takes your product from requirements to legal sale, with a fixed quote before any work starts. See compliance services](/services) Learn this properly In-depth course that teaches the full process, not just this one answer. [Start the course — $149](/courses/09-ukca-marking-for-electronics-products)[Prefer to read? Get the book — $24.99](/books/09-ukca-marking-for-electronics-products) Related guides * [UK Border Target Operating ModelUK Border Target Operating Model for electronics importers: phased SPS and customs controls, Safety and Security declarations, GB import health certificates, and what electronics supply chains need at the UK border post-Brexit.](/guides/uk-border-target-operating-model) * [UK Critical Minerals StrategyUK Critical Minerals Strategy for electronics hardware: 18 priority minerals, British Geological Survey risk ratings, JETCO partnerships, and how the strategy shapes UK government procurement preferences for electronics supply chains.](/guides/uk-critical-minerals-strategy) * [UK Product Regulation & Metrology Bill](/guides/uk-product-regulation-metrology-bill) * [UKCA Marking Guide](/guides/ukca-marking-guide) * [UK Consumer Protection Act 1987Part I of the Consumer Protection Act 1987: strict liability for defective products, who counts as a producer, the available defences including development risks, and how it interacts with the Product Regulation and Metrology Act.](/guides/uk-consumer-protection-act-1987)