A quiet revolution in European liability law
Many companies are currently focusing on artificial intelligence, new software architectures and digital business models.
However, another development may have an even greater impact on companies: the revised EU Product Liability Directive (EU PLD).
The updated directive will apply across all EU member states starting in 2027 and significantly changes how product liability is interpreted.
Software will be explicitly treated as a product.
This change has major implications for manufacturers, software companies and corporate leadership.
Software is formally recognized as a product
The original Product Liability Directive dates back to 1985 – a time when software played only a minor role in physical products.
Today the situation is completely different. Modern products are often largely defined by software.
The new directive explicitly includes digital elements such as:
- embedded software
- cloud-based software services
- AI systems
- software updates
- digital product functionalities
This means that software defects can now clearly trigger product liability claims.
Liability claims will become easier for claimants
One of the most significant changes concerns the burden of proof.
The revised directive makes it easier for injured parties to pursue liability claims.
This includes:
- simplified evidentiary rules
- improved access to technical evidence
- greater recognition of complex digital systems
For companies developing complex software-based products, this can significantly increase exposure to liability risks.
Software failures may increasingly lead to liability cases
A common argument in the past has been that software systems are inherently complex and cannot be entirely free of defects.
Under the new directive this argument becomes less convincing.
The directive increasingly evaluates whether a product meets the legitimate safety expectations of users.
If software failures lead to damage, liability cases may become more frequent.
This is particularly relevant for industries such as:
- automotive
- medical devices
- industrial automation
- smart home and IoT systems
Executive leadership faces new responsibilities
For company executives this creates a new dimension of responsibility.
Software development is no longer purely a technical topic.
It increasingly becomes a matter of risk management and corporate liability.
Executives must address questions such as:
- How robust are our development processes?
- How do we demonstrate software quality?
- How are safety risks assessed?
- How are software updates controlled?
- How are engineering decisions documented?
These questions directly affect corporate governance.
Technical expertise becomes crucial in liability disputes
When liability disputes arise, complex technical questions must often be answered.
For example:
- Did a software defect cause the damage?
- Were development processes sufficient?
- Were risks foreseeable during system design?
- Were known issues handled appropriately?
This is where technical expert witnesses play a key role.
They analyze software systems, development processes and technical evidence to determine the actual cause of failures.
Companies should prepare early
Even though the directive will fully apply from 2027, companies should not underestimate the impact.
New liability frameworks often reshape legal interpretation and expectations.
Organizations that prepare early will be in a better position to manage future risks.
This preparation may include:
- reviewing development processes
- assessing software quality practices
- analyzing potential liability risks
- strengthening technical documentation
Conclusion
The revised EU Product Liability Directive marks a new phase of product liability.
Software is now clearly treated as a product – with all associated legal implications.
For companies this means one thing above all:
software quality increasingly becomes a strategic management and risk topic.
Note:
For executives and technical leaders I offer a compact 30-minute executive briefing explaining the new EU Product Liability Directive and its implications for software-driven products.
This session provides a clear overview of the risks, changes and practical actions companies should consider.