On 11 September 2025, the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) published a draft bill to modernise German product liability law and transpose the new EU Product Liability Directive. Its key amendments focus on digitalisation, the circular economy and global value chains. The draft bill also includes civil procedure rules to streamline the enforcement of product liability claims, and will significantly increase liability risks for manufacturers and other liable parties. Below is a concise summary of the proposed changes:
Broader definitions of product, defect, damage and liable parties
The Product Liability Act governs who must assume liability for personal injury or property damage caused by a defective product, and under what conditions. The new Product Liability Act broadens some key definitions, and expands their scope. For instance, the revised wording explicitly also covers software (although the prevailing view is that the previous definitions already covered software), redefines what constitutes a defect, broadens the scope of compensable damage and expands the list of parties that can be held liable:
- Product: Under the current Product Liability Act, a product is defined as any all movables, as well as electricity. In future, all types of software (including AI and cloud solutions) will also explicitly be considered products. This does not apply to open-source software created or provided in a non-commercial context. In addition, digital manufacturing files (such as CAD files or templates for drills, lathes, and mills), will also be considered products.
- Defect: Under the current Product Liability Act, a product is considered defective if it has a safety defect. This is assessed according to the reasonable safety expectations of the foreseeable user group. In future, this assessment of defectiveness will also have to take into account the product’s self-learning capabilities, foreseeable effects on other products and cybersecurity requirements. Defects can also be caused by updates, upgrades, the failure to provide them, or associated digital services. The relevant point in time for determining defectiveness will also be extended: If the manufacturer retains control over the product, e.g. through software updates and upgrades, the relevant point in time is pushed back accordingly.
- Damage: Liability covers damage caused by a defective product that leads to death, personal injury, damage to health, or damage to other property intended for private use or consumption. Under the proposed amendments, damage to (even non-personal) data will also be compensable, provided that such data are not used for professional purposes. The current deductible for the injured party in cases of property damage, and the overall liability cap for a manufacturer in cases of personal injury will be removed.
- Liable parties: Currently, primary liability rests with the actual manufacturer, the “quasi-manufacturer” (which brands the product as its own, for example by affixing its label) and the EEA importer; if neither the manufacturer nor the importer can be identified, the supplier is held liable. Under certain conditions, agents, fulfilment service providers (apart from pure freight/postal services) and online platforms will be able to be held liable in addition to importers and suppliers when a product is manufactured outside the EU. For composite products, the component manufacturer or the provider of a related service will also be liable alongside the product manufacturer provided the integration was carried out with their consent. Anyone who substantially modifies a product (e.g. through upcycling) will be considered the manufacturer of the modified product.
Relief for injured parties, transparency of decisions
The new Product Liability Act also aims to make it easier for injured parties to furnish proof and introduces an obligation to disclose evidence. Certain final adjudications will also need to be published in future.
- Legal presumptions: As a general rule, parties asserting a claim for damages in court proceedings must meet all the requirements for the claim. In future, certain legal presumptions to the benefit of the injured party will apply regarding the product’s defectiveness and the causality between the defect and the infringement of the legally protected interest. A special standard of proof will apply to complex technical or scientific matters to make it easier for injured parties to furnish proof. This will make things even harder for manufacturers when responding to product liability claims, as the burden of proof on the injured party will be even weaker than it is under the current already manufacturer-unfriendly regime.
- Discovery-style evidence disclosure: If a claim for damages is asserted, courts will in future be able to order a manufacturer to disclose relevant evidence in its possession. Frequently, injured parties lack information as to how the product was manufactured or how it functions technically, while manufacturers usually have this information. The new statute will address this issue. In future, manufacturers may have to provide internal documents in court proceedings and should be prepared to do so. The only exceptions to this rule will be where the information comprises trade secrets or the scope of the court order is disproportionate.
- Publication of decisions: Currently, not all court decisions are published. The new Product Liability Act will oblige second and third-instance courts to publish final adjudications on product liability cases in an easily accessible electronic form. The Act does not stipulate the specific medium of publication. Even if published decisions are anonymised, it can be assumed that, in the future, more decisions will become public.
Conclusion
Companies in Germany face a significantly tougher liability regime under the new Product Liability Act. The German legislature has until 9 December 2026 to transpose the EU Product Liability Directive. Companies are advised to begin preparing for the planned changes now.
Forward
