Product Liability and Product Compliance

Product liability in Germany in brief

Product liability in Germany rests on two pillars that apply side by side. Under the Product Liability Act (Produkthaftungsgesetz, ProdHaftG), a manufacturer is liable without fault if a defect in its product kills or injures someone or damages privately used property other than the product itself (§ 1 ProdHaftG).

Under tort law, § 823(1) of the Civil Code (BGB), manufacturers are liable for culpable breaches of their duties of care in design, manufacture, instruction and product monitoring, with the burden of proof largely reversed in favour of the injured person. On top of liability, manufacturers, importers, distributors and online marketplaces must comply with EU product safety and product-specific legislation, which is enforced by market surveillance authorities and can require recalls.

Both areas are changing fundamentally in 2026 and 2027. A new EU directive on liability for defective products applies to products placed on the market after 9 December 2026, and Germany has re-enacted its Product Liability Act accordingly. The General Product Safety Regulation (GPSR) has applied since December 2024, the Packaging and Packaging Waste Regulation since August 2026, and the Machinery Regulation applies from 20 January 2027. This page explains the liability regime old and new, product safety and CE marking, market surveillance and recalls, and the main product-specific regimes. It belongs to our commercial law practice.

Product liability under the current ProdHaftG

The ProdHaftG implements the 1985 EU directive. Liable as manufacturer is whoever produced the end product, a raw material or a component, anyone who presents itself as manufacturer by putting its name or trademark on the product, and the importer who brings the product into the European Economic Area for distribution (§ 4 ProdHaftG).

If the manufacturer cannot be identified, each supplier is treated as manufacturer unless it names its own supplier within one month of a request. A product is defective if it does not provide the safety that can legitimately be expected, taking into account its presentation, the use that can reasonably be expected and the time it was placed on the market.

Liability is strict, but limited in several ways. Property damage is covered only for privately used items other than the defective product, and the injured person bears the first EUR 500 of property damage (§ 11 ProdHaftG). For personal injury caused by a product or identical products with the same defect, total liability is capped at EUR 85 million (§ 10 ProdHaftG).

Claims become time-barred three years after the injured person knew or should have known of the damage, the defect and the liable person (§ 12), and expire ten years after the product was placed on the market (§ 13). Liability cannot be excluded or limited in advance (§ 14). The manufacturer can escape liability by proving, among other things, that the defect could not be discovered under the state of science and technology when the product was put into circulation.

Tort liability under § 823 BGB

Tort-based producer liability (Produzentenhaftung) developed by the Federal Court of Justice remains highly relevant because it is not capped, covers commercial property damage and includes post-sale product monitoring. Manufacturers must observe their products in the market, evaluate complaints and accident reports, and warn or recall where necessary. Because the burden of proof for organisational fault is largely reversed, manufacturers need a documented quality and product monitoring system to defend claims. Records of design reviews, test results, field observations and decisions on corrective measures are the evidence that decides such cases years later.

The new product liability regime from December 2026

Directive (EU) 2024/2853 (PLD) applies to products placed on the market or put into service after 9 December 2026 and replaces the 1985 directive. It treats software, including AI systems and software delivered as a service, as a product, while excluding free and open-source software developed or supplied outside a commercial activity. It extends compensable damage to the destruction or corruption of data not used for professional purposes and to medically recognised psychological harm. Defects may arise from software updates or the failure to supply security updates, and from a lack of cybersecurity, so long as the manufacturer retains control over the product.

The circle of liable economic operators widens: besides manufacturers and importers, authorised representatives and fulfilment service providers can be liable where no EU-based manufacturer, importer or representative is available, and online platforms in certain cases. Whoever substantially modifies a product outside the original manufacturer's control is treated as a manufacturer. The directive provides that national law may not set financial ceilings on liability, so the EUR 85 million cap and the EUR 500 deductible will not apply to products placed on the market after the cut-off date.

Claimants obtain a right to disclosure of relevant evidence held by the defendant, and courts must presume defectiveness or causation in defined situations, including where the defendant fails to disclose evidence or where technical or scientific complexity makes proof excessively difficult. For latent personal injuries, the long-stop period is extended to 25 years.

Germany's modernisation act, which re-enacts the ProdHaftG to transpose the directive, was adopted by the Bundestag on 8 October 2026 (government bill, printed paper 21/4297), and the Bundesrat decided on 16 October 2026 not to call the mediation committee. Our insight on the 2024 directive explains the changes in more detail.

Product safety, the GPSR and CE marking

Product compliance determines whether a product may be placed on the EU market at all. Products covered by EU harmonisation legislation, such as machinery, electrical equipment, radio equipment, toys, medical devices and construction products, must meet the essential requirements of the applicable legislation, undergo conformity assessment, carry the CE marking where required and be accompanied by an EU declaration of conformity and technical documentation. For consumer products, the General Product Safety Regulation (Regulation (EU) 2023/988) has applied since 13 December 2024 and fills the gaps left by sector legislation.

The GPSR requires manufacturers to carry out an internal risk analysis, prepare technical documentation and keep it for ten years, ensure traceability and provide contact details. Products may only be placed on the market if an economic operator established in the EU is responsible for them. Online offers must show the manufacturer, the responsible person in the EU, product identification and safety information, and online marketplaces have specific duties to cooperate with authorities and remove dangerous product listings. The Product Safety Act (ProdSG) supplements the GPSR in Germany and provides for fines. See our insight on the General Product Safety Regulation.

Machinery, AI and cybersecurity

From 20 January 2027, the Machinery Regulation replaces the Machinery Directive. It requires third-party conformity assessment for safety components with fully or partially self-evolving behaviour using machine learning, addresses protection against corruption and the reliability of control systems, and allows digital instructions, with a paper copy on request. Substantial modifications of machinery can turn operators and integrators into manufacturers. Products with digital elements must additionally meet the Cyber Resilience Act, whose reporting duties for actively exploited vulnerabilities have applied since 11 September 2026. See our insight on the Machinery Regulation 2027.

Market surveillance and product recalls

Market surveillance authorities of the federal states, and for some sectors federal authorities, check products on the market and at the border together with customs. They can require corrective action, prohibit a product from being made available, order its withdrawal or recall, and publish warnings. Under the GPSR, manufacturers must act immediately when they have reason to believe that a product is dangerous, notify authorities through the EU Safety Business Gateway, and inform consumers. In a recall of consumer products, consumers must be offered an effective, cost-free and timely remedy, normally a choice between repair, replacement and refund.

A recall is also a liability and contract event. Under German tort law, the duty to monitor products after sale can require a warning or recall, and manufacturers that fail to act face claims for subsequent damage. Recall costs can often be passed up the supply chain if supply contracts and quality assurance agreements are well drafted, but standard liability insurance often does not cover a company's own recall costs, so separate recall cover may be needed. See our insight on product recalls in Germany.

Ecodesign, packaging and batteries

Product compliance increasingly covers sustainability. The Ecodesign for Sustainable Products Regulation (ESPR) allows the Commission to set requirements on durability, repairability, recycled content and information for almost all physical products, including a digital product passport introduced product group by product group, and prohibits large companies from destroying unsold apparel and footwear.

The Packaging and Packaging Waste Regulation (PPWR, Regulation (EU) 2025/40) has applied since 12 August 2026; its requirements on labelling, recyclability, recycled content and empty space are phased in from 2028 and 2030, while Germany keeps registration and producer responsibility under its own packaging legislation. The Battery Regulation adds due diligence, labelling and removability requirements and a battery passport for certain batteries. See our insights on the digital product passport and the PPWR.

Extended producer responsibility schemes for packaging, electrical equipment and batteries require registration in Germany before products are made available, and foreign distance sellers often need an authorised representative. Marketplaces must check that sellers are registered, so non-compliance quickly leads to delisting. Foreign manufacturers selling directly to German customers should therefore set up their registrations, authorised representatives and take-back arrangements before launch rather than reacting to a marketplace notice, and should check whether their labelling and instructions are available in German.

Product liability risk management and claims

Effective product liability risk management combines design, documentation, contracts and insurance. Manufacturers should maintain risk assessments and technical documentation for each product version, track field data and complaints, define criteria and responsibilities for corrective actions, and practise recall scenarios. Supply contracts should allocate responsibility for defects, recall costs and regulatory cooperation, and require suppliers to maintain adequate insurance. For products with software, update policies, end-of-support dates and vulnerability handling must now be designed with liability in mind.

When claims arise, early evidence preservation is critical: retaining the product, documenting the chain of custody and coordinating with insurers and suppliers. The new disclosure rules and presumptions will make defending such claims harder where documentation is incomplete. Mass claims can be pursued through redress actions by qualified consumer associations under the Consumer Rights Enforcement Act (VDuG); see our page on collective actions and mass litigation.

Interaction with contract and warranty law

Strict liability protects third parties and consumers; business customers who suffer damage to the product itself or to commercially used property rely on contractual warranty claims and on tort law. In supply chains, the allocation of defect, recall and regulatory costs is therefore a matter for the supply contract. Manufacturers should align warranty periods, inspection duties, recourse provisions and caps with the risks they cannot exclude towards end users. Liability towards injured persons under the ProdHaftG cannot be excluded, but the internal allocation between manufacturer and supplier can be agreed, and indemnities should be backed by insurance and, where the supplier is small or foreign, by security.

Insurance

Liability insurance for manufacturers typically covers personal injury and property damage, with optional extensions for recall costs, removal and installation costs and financial loss. Policies should be reviewed for the inclusion of software, data loss and cyber-related defects, which the new regime brings within scope, and for territorial limits where products are exported.

How TRW & Co helps

We advise manufacturers, importers, brand owners, distributors and online sellers on product liability and product compliance in Germany and the EU. We assess the impact of the new product liability regime, review conformity assessment, CE marking and GPSR compliance, prepare product safety and recall procedures, and support clients in communications with market surveillance authorities. We draft supply, quality and recall cost provisions, advise on ecodesign, packaging and battery obligations, and defend liability claims and recall-related disputes, including recourse claims against suppliers. To discuss a product or a claim, please contact us. This page provides general information, not legal advice.