Law Commission looks to bring AI within UK product liability regime

The proposals (258 pages/1.73 KB PDF) include a broader definition of a product that would explicitly cover software, AI systems and certain design components and features of social media and other online platforms. The proposals would apply whether those technologies are embedded in physical products, supplied digitally, downloaded from the internet or accessed remotely.

The consultation proposes a residual catch-all category, which would capture any digital or non-digital thing designed to perform a specific function for users, regardless of how it is supplied or made available, with the aim of capturing new and emerging technologies from the point of innovation.

To succeed in a claim, a claimant would still need to establish that the product was defective, meaning that it fell below the level of safety persons were generally entitled to expect; that the defect caused the harm suffered; and that the damage is recoverable under the regime, namely death, personal injury or damage to private property.

The review comes amid growing concern that the existing framework under the Consumer Protection Act 1987 (CPA) was developed for a very different technological era and does not adequately address the risks and complexities associated with modern digital products, such as software, and AI-enabled systems. The consultation proposes that AI systems should be treated as products in their own right. The consultation explicitly considers bringing the design components of social media within the scope of product liability.

While the Online Safety Act 2023 addresses online harms through duties relating to risk assessment, risk management and governance, it does not provide a private right of action or route to redress. The consultation notes that “design choices, and the platform behaviour they produce, have the potential to cause harm and should therefore attract liability under the CPA in the same manner as any other product”.

The consultation proposes that design components and features underpinning the architecture, functionality and operation of social media platforms should fall within the scope of the CPA. These could include algorithms and recommender systems, infinite scroll, ‘likes’ and ‘streaks’, ephemeral features, personalised notifications, content filters, age verification and other access controls, parental controls, screen-time limits, account deactivation processes and reporting mechanisms.

Toby Coughlin, technology disputes expert at Pinsent Masons, said: “There are some important considerations that the Law Commission will need to grapple with if these proposals are to be taken forward. These include where the line should be drawn between products, services and pure information, how defective design might be assessed in the context of digital products and AI, and whether it is appropriate to impose strict liability for harm caused in less tangible contexts.”

"This consultation could mark a decisive shift in technology liability. By treating digitally supplied software and AI systems as 'products,' it would bring developers and platform operators far closer to strict liability for harm caused by defective design or functionality. Proposed rules extending liability to free, ad-funded services would capture SaaS and AI models well beyond traditional product sales. Commercially, providers should expect higher insurance premiums, testing burdens and disclosure obligations, with liability reallocated across supply chains. Yet clearer rules could ultimately improve risk pricing and consumer confidence – provided liability remains proportionate and technologically neutral."

Gemma Erskine, technology disputes expert at Pinsent Masons, said: “Bringing the design components of online platforms within product liability law needs to be considered against an increasingly complex regulatory landscape. Enforcement under the Online Safety Act 2023 is only now getting underway, proposals for social media bans remain live, and we are now seeing proposals for strict liability and litigation added to that landscape. The question is whether extending product liability in this way provides a proportionate route to redress, or risks adding further complexity and fragmentation to an already crowded landscape.”

The proposals also seek to reflect the increasingly complex nature of modern supply chains. The Commission has proposed expanding the categories of potentially liable parties to include fulfilment service providers, online marketplaces and UK authorised representatives, alongside more traditional manufacturers and producers.

The reforms are intended to address situations where products are marketed, distributed and supplied through digital platforms and international networks.

A further proposed reform would broaden the concept of ‘supply’ to ensure products are treated as supplied regardless of how they are delivered, including by download or other digital means. The consultation also seeks views on clarifying how liability should operate where products have undergone substantial modification after they have been supplied.

The Commission has additionally proposed a clearer and more structured framework for determining when a product is defective. Recognising the evidential challenges that can arise in cases involving complex software and AI systems, it has also provisionally proposed a rebuttable presumption of defect together with a risk-sharing mechanism in cases involving exceptional evidential difficulties.

The consultation proposes a new framework for compensation for psychiatric harm, as well as extending compensation rights to cover damage to property used for both private and professional purposes. It also proposes introducing compensation for the destruction or corruption of data, reflecting the importance of digital assets in modern life and commerce.

The Commission has proposed retaining the existing defences available under the product liability regime, including the development risks defence, while updating them to ensure they continue to operate effectively in cases involving digital products and AI systems. The development risks defence allows producers to avoid liability where a defect could not have been identified using the scientific and technical knowledge available at the relevant time.

Additionally, the Commission is consulting on resetting the long-stop period where a producer substantially modifies a product and extending the long-stop period to 25 years in cases involving latent harm that may only emerge many years after a product is supplied.

Katie Hancock, product liability expert at Pinsent Masons, said: “At first glance it looks very similar to the new EU product liability directive so in due course it would be good to understand how aligned these proposals are and if there are any learnings yet from Europe which are relevant to this consultation.”

The consultation is open until 14 January 2027, after which the Commission will consider responses before formulating final recommendations for reform