1. New product definition (sections 2 and 4 of the New Product Liability Act)

According to its section 2, the New Product Liability Act will apply to all products placed on the market and will explicitly include software, regardless of how it is provided or used. The New Product Liability Act does not define the term “software”, as the BMJV has intentionally refrained from defining it in order to remain “open to future technological developments”. The PLD mentions computer software, firmware, operating systems, and AI systems as respective examples. Content-based digital files and open-source software are excluded.

Another significant change is the introduction of “related services” as a product component and, consequently, as a potential source of liability. “Related services” are defined in section 4 (2)(ii) of the New Product Liability Act as “a digital service that is integrated into or interconnected with a product such that its absence would prevent the product from performing one or more of its functions”. As an example, the recitals of the New Product Liability Act refer to a navigation system in a self-driving car. This also means that software that is integrated into or connected with a physical product is considered a component of that product. If a software defect causes damage, both the product manufacturer and the software provider can be held liable. Therefore, the expanded product definition under sections 2 and 4 of the New Product Liability Act results in an expansion of potential defendants.

2. Additional criteria for defectiveness (sections 7 and 8 of the New Product Liability Act)

Under the New Product Liability Act, liability for defectiveness in digital products extends beyond placing the product on the market. The test for defectiveness is still based on the product’s safety rather than its fitness for purpose. However, section 7 of the New Product Liability Act introduces new aspects to be considered when assessing defectiveness. The point of assessment has also changed. According to section 8 of the New Product Liability Act, it is now not only relevant when the product was placed on the market, but also to the extent to which the manufacturer retained control over the product after it was placed on the market. Section 8 now includes the product’s self-learning capabilities, interaction with other products, and cybersecurity requirements.

Although the New Product Liability Act does not impose any new obligations, the manufacturer should monitor developments in science and technology after a product has been placed on the market, and if necessary, remedy security vulnerabilities that later become apparent, provided they still have control over the product. Failure to do so may give rise to liability for damage. Accordingly, manufacturers can be held liable for damage caused by defective software updates or upgrades, as well as for failing to perform necessary updates. This reflects the fact that manufacturers are often able to exercise control over a product and to prevent damage even after it has been placed on the market.

3. Liability expands to new actors (sections 5, 10, 11, and 13 of the New Product Liability Act

The New Product Liability Act includes an expanded range of potential defendants. Liability expands to new actors (outside the EU) in global supply chains, such as importers, fulfilment service providers (those who handle storage, packaging, addressing, and shipping without being postal services), and online marketplaces under defined conditions. As a result of this expansion, nearly all stakeholders operating within a supply chain are potentially exposed to strict liability.

Liability now also applies to products that have been significantly changed after market release (e.g., upcycled goods), with liability shifting to the party that substantially modified and placed the product on the market (section 5 of the New Product Liability Act).

4. Claimant-friendly procedural rules

The New Product Liability Act, in line with the underlying PLD, considers the burden of proof to be significantly more difficult in the case of complex modern products, such as software and connected devices. It therefore introduces two claimant-friendly procedural mechanisms:

a. Disclosure obligations (section 19 of the New Product Liability Act)

The defendant may, upon the claimant’s request, be obliged to disclose relevant evidence if the claimant has made their claim sufficiently plausible. Courts can therefore order manufacturers to disclose technical and safety information to support claims, balancing, in particular, the protection of trade secrets (section 19 (3) New Product Liability Act). If the defendant fails to comply with the court’s order to disclose certain evidence, a statutory presumption of defectiveness may be triggered (section 20 (1) No. 1 of the New Product Liability Act). All the foregoing depends on the plausibility threshold that claimants must meet before the court will consider ordering disclosure from the defendant.

b. Presumptions of defectiveness and causation (section 20 of the New Product Liability Act)

The New Product Liability Act provides further presumptions regarding the existence of defectiveness and causation. Causation may be presumed if the damage is typical of the product’s defectiveness (section 20 (2) of the New Product Liability Act). If, despite the disclosure of evidence, it remains excessively difficult for the claimant to prove defectiveness or causation due to technical or scientific complexity, the courts may presume the existence of these elements (section 20 (3) of the New Product Liability Act).

5. Unlimited financial liability and alternative liability

Manufacturers have unlimited financial liability. The previous liability cap of €85 million for personal injury has been removed, as has the €500 deductible for property damage.

As before, liability under other German legal provisions remains unaffected by the New Product Liability Act. This is particularly relevant for contractual liability or the so-called producer liability pursuant to section 823 German Civil Code (“BGB”). Such claims under section 823 BGB may have practical relevance in cases involving the damage or destruction of property used exclusively for professional purposes, violations of personal rights, or pure economic loss, for which the draft Product Liability Act does not provide compensation.

6. Outlook

The New Product Liability Act is expected to be passed in summer 2026. BMJV had granted relevant professional bodies, associations, and academic organisations the opportunity to submit comments by 10 October 2025. These comments will be considered in the ongoing legislative procedures.

The New Product Liability Act significantly modernises and expands product liability protection for consumers in Germany to reflect technological and economic development. By broadening the range of potential defendants, introducing claimant-friendly procedural rules, and expanding the definition of the product itself, the New Product Liability Act will potentially increase the number and complexity of product liability claims in Germany. The impact will largely depend on how German courts interpret and apply the new terms and rules.

7. Action points

The New Product Liability Act is designed to fully implement the PLD by 9 December, 2026. Although this seems far away, we recommend taking early and proactive measures to mitigate potential risk. In our view, the following measures and considerations are particularly important:

• Review product portfolio and supplier relationships: Conduct a thorough inventory of your products and assess supplier relationships, focusing on the availability and completeness of documentation regarding product conformity, product monitoring, research and development, safety, user manuals and instructions, and product warnings.
• Strengthen product documentation: Given the easing of the burden of proof for claimants, comprehensive and complete product documentation – especially regarding product origin and product safety and traceability – will be crucial for providing exonerating evidence at an early stage.
• Update contracts with manufacturers and suppliers: Review and update contractual agreements to ensure that your suppliers are obligated to provide all necessary information and documentation to support your defences in the event of a claim.
• Consider privilege and disclosure implications: In light of new disclosure requirements, review and revise corporate policies regarding legal communications, as attorney-client communications may be subject to disclosure. Consider including cooperation, liability, and withdrawal clauses in contracts to address situations where claims are asserted directly against your company.
• Assess insurance coverage: Review your product and public liability insurance policies to confirm that defence costs and damage claims under the new regime are adequately covered.
• Prepare for increased litigation: The expansion and tightening of EU product liability law is accompanied by broader efforts in EU member states to strengthen consumer rights, such as enabling class actions and association actions. As a result, a significant increase in legal disputes – including collective actions and claims brought by consumer associations – should be anticipated.

In-depth 2025-256