On 8 October 2026, the German Parliament Bundestag adopted Germanys implementation law of the revised EU Product Liability Directive ("PLD"), significantly expanding liability exposure. While the legislative process continues, businesses should prepare now for a more claimant-friendly regime.

Why a new Directive?

The reform on the EU level responds to three developments:

• Digitalisation: Software and hardware have evolved in tandem, with software increasingly becoming a standalone product, embedded in everything from vehicle control systems to smart home devices.
• Circular economy: Products are more frequently repaired, refurbished or substantially modified after being placed on the market, potentially altering their risk profile.
• Global value chains: More products sold in the EU are manufactured outside the EU, which can make it more difficult for injured consumers to pursue claims effectively.

What is changing in Germany?

The new German Act on the Modernisation of Product Liability Law ("PLA") introduces several important changes:

• Software is a product. The definition of a product now covers software, including AI systems and certain related digital services (Section 2 PLA).
• Liability no longer ends at a fixed point in time. Where a manufacturer retains control over a product, for example through software updates or connected services, liability for defects can continue indefinitely (Section 8(2) PLA).
• More types of damage are covered and no cap on liability exists. Recoverable damage now includes large-scale loss or corruption of personal data, and a deductible is no longer available (Recital 56 PLD on the prohibition of national liability caps; legislative proposal for the PLD, p. 1).
• More parties can be sued. The range of potential defendants expands to include software manufacturers, importers, suppliers, fulfilment service providers and online platform operators (Sections 10 to 13 PLA).
• Evidence rules become more claimant-friendly: Courts may order defendants to disclose relevant evidence (Section 19(1) PLA) and apply presumptions concerning defectiveness or causation where proof is excessively difficult due to technical or scientific complexity, and the claimant establishes sufficient likelihood (Section 20(3) PLA).

What has changed since the German government's first draft?

The Bundestag's Committee on Legal Affairs and Consumer Protection added two important amendments to the Federal Ministry of Justice and Consumer Protection's original draft from 25 February 2026:

• Disclosure by third parties. Courts may require not only defendants, but also third parties to disclose evidence, (Section 19(1) PLA). This goes beyond the requirements of the PLD, which only requires disclosure by defendants.
• A new confidentiality safeguard. Courts may conduct separate evidentiary proceedings (selbstständiges Beweisverfahren) to determine whether certain information requires confidentiality protection. Access may be restricted to the parties’ lawyer (Section 19(4) PLA).

What does this mean for businesses?

The new regime is likely to make product liability claims easier to bring and more attractive to pursue collectively. Businesses should expect increased exposure, in particular, where products incorporate software, generate or store personal data, or remain connected to the manufacturer after sale:

• Mass claims become more attractive. Broader liability and evidentiary relief can make similar claims easier to pursue at scale.
• Software businesses face new exposure. Defective software causing widespread harm, including loss of personal data, can generate repeat claims across a customer base.
• Smaller claims may become commercially viable where they can be standardised and pursued in volume.
• Disclosure and evidentiary presumptions raise litigation risk. Businesses should expect greater focus on document preservation, technical evidence and confidentiality from the outset.

A key issue will be the tension between disclosure obligations and the protection of trade secrets. Courts will have to balance these competing interests based on "necessity" and "proportionality" (Section 19(3) PLA), but how that balance will be struck in practice remains uncertain. Together with the new evidentiary presumptions, disclosure obligations may place defendants under considerable pressure at an early stage of litigation.

Against that backdrop, the new option of separate evidentiary proceedings on confidentiality (Section 19(4) PLA) is a welcome safeguard. Even litigating whether information merits protection may itself create commercial risk. Allowing courts to restrict access during those proceedings to the parties’ lawyers can therefore provide an important additional layer of protection.

What is happening elsewhere in Europe?

In Belgium, the Council of Ministers approved a first draft implementing the PLD on 18 July 2026 and referred it to the Council of State for its opinion. The draft has not been published nor been tabled in Parliament, making timely implementation unlikely.

France has not yet adopted implementing legislation. The Ministry of Justice launched the transposition process shortly after the PLD entered into force, including by (i) establishing an interministerial working group, (ii) participating in the European Commission’s expert group on transposition, and (iii) consulting stakeholders on a draft implementation text. On 12 May 2026, it stated timely transposition remains a priority, but there has since been no significant public development.

The Netherlands have not yet adopted implementing legislation. Bill 36 906, submitted on 2 March 2026, remains pending before the House of Representatives (Tweede Kamer) under parliamentary consideration. A legislative consultation is scheduled for 8 February 2027, therefore implementation by the 9 December 2026 deadline is unlikely.

In Italy a draft legislative decree (A.G. 434) has been submitted to both Houses of Parliament for their opinions. Committees of the Chamber of Deputies (Camera dei Deputati) have completed their review and issued favourable opinions, while the Senate’s review (Senato della Repubblica) remains pending. The Government has until 9 November 2026 to finalise the decree, and the progress made suggests that implementation could be completed in time.

Spain has not published or introduced any draft legislation. Following the dissolution of Parliament ahead of the 29 November general election, implementation before 9 December 2026 appears highly unlikely.