Navigating The Evolving Product Liability Landscape: Part 2 - Consequences For Irish Businesses

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The Product Liability Directive EU 2024/2853 (New Directive) is due to be transposed into national law by 9 December 2026.

This article is the second instalment of a three-part series on Irish product liability law. In our first briefing, we analysed the key features of the New Directive, which aim to strengthen legal protections and certainty for claimants, while modernising the product liability framework to ensure it operates effectively in an increasingly digitalised environment.

In this briefing, we will consider some of the consequences of these changes for Irish businesses. Our final article in this series will focus on the New Directive’s interaction with other legislative instruments such as the General Product Safety Regulation (GPSR) and the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023.

Expansion of Definition of “Product”: Software

The New Directive expressly provides that software constitutes a “product” in the context of product liability law, including applications, operating systems and AI systems, in turn bringing software manufacturers and related economic operators within its scope.

Further, the New Directive recognises that, unlike traditional products, software continues to evolve after its release to the market. As such, software manufacturers may remain liable for defects arising after supply where the software or related services remain within their control, including through updates, upgrades and machine‑learning functionality. This extended liability captures defects emerging over time, including those resulting from updates, inadequate cybersecurity, or failures to provide necessary patches.

These changes materially increase exposure for Irish technology businesses. In practice, companies will need to ensure ongoing oversight of software performance, robust update and patch management, and strong cybersecurity controls throughout the product lifecycle.

Addition of New Categories of “Damage”

The New Directive clarifies that “personal injury” now expressly includes “medically recognised and medically certified psychological harm”. This is a notable development. While psychiatric injury is recognised under Irish law, recovery for standalone psychological harm has traditionally been limited.

In addition, the New Directive confirms that damage comprising the “destruction or corruption of data” falls within the scope of compensable loss. This reflects the New Directive’s expansion to software and other digital products, ensuring that damage to digital products is expressly recognised and bringing software manufacturers and related economic operators more clearly within scope.

These additional categories further broaden potential liability exposure for Irish businesses. In light of this, companies may need to allocate greater resources to risk assessment, product safety testing and data protection measures to mitigate an increased risk of claims.

Introduction of “Economic Operators”: Online Platforms

As detailed in our first article, the New Directive introduces the concept of the “economic operator” to ensure that claimants have an EU-based entity against whom they can pursue a claim for damage caused by a defective product. The new rules provide a fallback sequence of potentially liable actors starting with the manufacturer and moving, if necessary, to the importer, authorised representative, fulfilment service provider and finally, the distributor.

The New Directive also clarifies that online platforms may attract liability where they act as, or present themselves in a manner that leads consumers to believe they are, one of the relevant economic operators in relation to a defective product. However, where the platform simply connects buyers and sellers and qualifies as a “mere intermediary” under the Digital Services Act, it may benefit from the conditional liability exemption thereunder.

These changes broaden the range of potentially liable parties and extend liability exposure across the supply chain. For Irish businesses, particularly those importing, distributing, or facilitating online sales, this may result in heightened compliance obligations, increased litigation risk, and a need for more robust contractual and due diligence measures.

Introduction of Rebuttable Presumptions

As detailed in our first article, the test under the New Directive remains one of strict liability. This means that a consumer need only show that the product was defective, that damage occurred and that there was a causal link between the two.

However, the New Directive goes further by easing the burden of proof for claimants through the introduction of rebuttable presumptions of defectiveness and causation. In certain circumstances, it will be presumed that a product is defective, or that the defect caused the damage, unless the relevant economic operator can demonstrate otherwise.

These presumptions may arise, for example, where the manufacturer fails to disclose relevant technical information, where a product does not comply with applicable safety standards, or where an obvious malfunction occurs during normal use. Causation may also be presumed where a defect is established and the damage is of a kind typically associated with that defect.

A further presumption may apply in cases involving complex products (such as software, connected devices and AI), where claimants face excessive difficulty in proving defectiveness or causation. In such cases, defectiveness, causation, or both may be presumed where it is sufficiently likely that the product is defective and/or that the defect caused the damage.

It remains to be seen how this presumption, combined with the expanded definition of “product” to include software, will interact with the “development risk defence”, which Ireland may choose to retain. Under this defence, an economic operator may avoid liability by showing that, at the time the product was placed on the market, the state of scientific and technical knowledge was insufficient to detect the defect.

Overall, these presumptions are likely to ease the evidential burden on claimants in certain circumstances. The impact of this on Irish businesses, and consequently on innovation, remains uncertain. While enhanced protections may encourage consumer uptake of cutting‑edge products, they may also lead businesses to proceed more cautiously in bringing new technologies to market, given the increased risk of liability for unforeseen or latent defects.

Introduction of the Concept of “Latency”

The New Directive also introduces the concept of “latency” in certain health‑related and environmental cases, recognising that damage may take significantly longer to manifest in such cases. Where applicable, the long-stop period for bringing claims is extended to 25 years. While this provides enhanced protection for consumers, it also exposes Irish businesses, particularly those operating in the medical innovation sector, to a substantially extended period of potential liability.

Conclusion

For Irish businesses, the New Directive brings a more modern and consumer‑focused approach to product liability and raises the bar for compliance. The broader definition of “product”, the additional categories of compensable damage, the expansion of exposure across the supply chain, the extended long-stop periods in certain circumstances, and the introduction of rebuttable presumptions mean that companies may face increased litigation risk and liability exposure.

The practical takeaway is clear: businesses, particularly those in technology, medical devices, and digital services sectors, need to ensure that their risk management processes, contractual arrangements, and product safety procedures are fit for purpose. Early preparation will help organisations remain compliant, protected, and well‑positioned to continue innovating confidently as the regulatory landscape evolves.