German Disputes Bites - The New EU Product Liability Regime: New Rules Demand a New Playbook

If your company sells products into the European Union – whether you are headquartered in Munich, Michigan, or Mumbai – the ground beneath your liability exposure has shifted. The EU’s revised Product Liability Directive (PLD), which Member States must transpose into national law by late 2026, rewrites the rules on who proves what when a product is supposed to be defective. For manufacturers accustomed to the old regime, the message is clear: the strategies that protected you yesterday will not be enough tomorrow.

Modernised product definition

The revised PLD also modernises what counts as a “product”. Its scope now expressly extends to software, including AI systems, as well as certain digital manufacturing files and products incorporating or relying on related digital services. This means that businesses traditionally outside the core product-liability space may now need to reassess their exposure.

The paradigm shift: rebuttable presumptions replace proof

Under the outgoing framework, claimants bore a strict burden of proving that a product was defective and that the defect caused their loss. The new PLD introduces statutory presumptions of defectiveness and causation that courts must apply when certain conditions are met — significantly alleviating the claimant’s burden of proof in those circumstances. For business leaders, this means that a product liability claim is now significantly easier to bring and harder to defeat at the outset. Passive defense postures now carry heightened risks and may no longer suffice.

Disclose or lose: information as strategy

The new presumption rules contain a crucial lever: The new regime also introduces court-ordered disclosure of relevant evidence. Failure to comply with such a disclosure order may trigger a presumption of defectiveness. At the same time, the Directive requires courts to consider necessity and proportionality and provides safeguards for confidential information and trade secrets. Information management, including voluntary, carefully managed disclosure of product safety data is therefore no longer merely good practice – it is a frontline defense tool. However, since disclosed information is generally not privileged in most EU jurisdictions, what you share can be used against you elsewhere. The takeaway: build an information-disclosure protocol that is deliberate, legally informed, and monitored at board level.

Your distribution chain is now your (first) line of defense 

The revised Directive significantly expands the circle of potentially liable parties. It pulls importers, distributors, authorised representatives, fulfillment service providers, and – under certain conditions – suppliers and online platforms into the focus of a liability net as (new) “addressees.” If one of your channel partners faces a claim and mounts a weak defense, findings or evidence generated in those proceedings may have significant relevance or subsequent claims involving your product. Manufacturers should proactively equip their downstream partners – through contractual obligations, shared safety documentation, and co-ordinated legal strategies – to defend effectively. Control over distribution is no longer just a commercial priority; it is a litigation-risk issue.

Forum-shopping for evidence and rising costs

The new disclosure regime also increases incentives for claimants to consider jurisdictions in which evidentiary mechanisms are particularly advantageous, creating a new species of “evidence forum-shopping.” Information obtained in one set of proceedings can be leveraged in claims elsewhere.

Insurance cover review and adoption

Litigation costs across Europe are expected to rise substantially. Manufacturers should reassess their insurance programs now to ensure cover keeps pace with a more aggressive, more expensive claims environment.

What should you do now?

This is not a “wait and see” reform. Manufacturers selling into the EU should be taking concrete steps today:

• Audit your product portfolio for litigation-readiness under the new presumption rules.
• Design a controlled disclosure protocol for safety and technical data.
• Map your distribution chain and ensure channel partners can mount a credible defense.
• Review and adapt your European litigation budget and insurance cover.
• Monitor forum-shopping trends and plan evidence-management strategies accordingly.

The new PLD is a once-in-a-generation reset of product liability risk in Europe. Manufacturers who treat it as a strategic priority – not a compliance footnote – will be the ones best positioned to defend claims, protect their brands, and maintain market access.

Further resources

At Reed Smith, we have been and continue to be deeply engaged in product liability scenarios, advising clients on the evolving legal frameworks across jurisdictions. We are closely following the developments in Europe as Member States transpose the new PLD into national law, and the many associated topics that will shape this new landscape. 

The themes discussed above – from rebuttable presumptions and disclosure strategies to distribution chain liability, forum-shopping, and insurance considerations – are key topics illustrating the relevance and paradigm shift, though they do not comprehensively cover all aspects of this transformative reform. For further resources and various in-depth analysis, please visit our Product Liability Resource webpage and our PLD implementation tracker.