Product Recalls in Germany

When product recalls are required in Germany

Product recalls in Germany are driven by two sources of law that work in parallel. Public product safety law, now led by the General Product Safety Regulation (EU) 2023/988 (GPSR), the Product Safety Act (ProdSG) and sector rules for vehicles, food, medical devices and other harmonised products, requires businesses to take corrective action when a product they have placed on the market is dangerous and lets authorities order a recall. Private law, in particular the manufacturer's liability in tort under § 823 of the German Civil Code (BGB), imposes duties to monitor products after sale and to prevent harm once a risk becomes known.

In practice the question in most product recalls is rarely whether to act, but how far corrective action must go: a warning, a software update, a retrofit, a withdrawal from the distribution chain or a full recall from consumers.

Under Article 9(8) GPSR, a manufacturer that considers or has reason to believe that a product it has placed on the market is dangerous must immediately take the corrective measures needed to bring the product into conformity, including a withdrawal or recall as appropriate, inform consumers, and notify the market surveillance authorities of the Member States concerned through the Safety Business Gateway. Importers and distributors have corresponding duties to inform the manufacturer and authorities. For harmonised products, sector regulations and the Market Surveillance Regulation (EU) 2019/1020 impose similar duties. Authorities may order recalls themselves if businesses do not act voluntarily or act inadequately.

Notification duties and authorities

Notification is the first legal milestone in most product recalls. For consumer products, the Safety Business Gateway is the central channel: one notification reaches the authorities of all Member States where the product was sold, and information intended for consumers can be published on the EU Safety Gate portal. Separate rules apply to motor vehicles, where the Federal Motor Transport Authority (Kraftfahrt-Bundesamt) supervises recalls, to food and feed, where the food business operator must inform the competent authority under Article 19 of the General Food Law Regulation (EC) No 178/2002, and to medical devices, where vigilance reporting and field safety corrective actions are governed by the MDR.

Timing matters. The GPSR requires action "immediately" once a manufacturer has reason to believe a product is dangerous, and accident notifications must be made without undue delay. Waiting for complete test results before informing authorities is risky; the better approach is to notify with the information available and update the notification as the investigation proceeds. Section 28 ProdSG makes breaches of GPSR notification and corrective-action duties administrative offences, with fines of up to EUR 100,000 in the most serious listed cases.

Post-sale duties under German tort law

Independently of public law, German courts derive a duty to monitor products after they have been placed on the market (Produktbeobachtungspflicht) from § 823(1) BGB. Manufacturers must watch for safety-relevant information, including complaints, field reports, competitor products and scientific developments, and must react appropriately when a risk emerges. The Federal Court of Justice has held that this duty is directed at preventing harm to protected legal interests such as life, health and property.

This duty does not automatically entail a duty to repair or replace products free of charge: in many cases, an effective warning, or a measure that stops further use, can be enough to avert danger, while claims for cost-free repair are primarily a matter of contract and warranty law.

The GPSR has changed this picture for consumer products. Article 37 GPSR now requires the economic operator responsible for a product safety recall to offer consumers an effective, cost-free and timely remedy, as a rule a choice between repair, replacement and a refund at least equal to the price paid. Product recalls of consumer goods therefore carry remedy costs by law, whereas for business-to-business products the scope of a recall is still determined largely by the danger to be averted and by contract.

Management liability and criminal risk

Decisions about product recalls are management decisions. Managing directors of a GmbH and board members of an AG must ensure that the company has an organisation capable of detecting product risks and reacting to them, and they can be personally liable to the company under § 43 of the Limited Liability Companies Act (GmbHG) or § 93 of the Stock Corporation Act (AktG) if they breach that duty. The business judgment rule protects decisions taken on an adequate information basis and in the company's interest, but it does not protect a failure to comply with mandatory product safety law.

There is also a criminal dimension. German criminal courts have long recognised that managers who know of a dangerous product and fail to stop its distribution or to recall it can be liable for negligent or even intentional bodily harm if consumers are injured. Collective board decisions not to recall can expose each member who voted against action.

In addition, the company may face a corporate fine under § 30 of the Administrative Offences Act (OWiG) where a manager's offence relates to the company's duties, and supervisory failures can be sanctioned under § 130 OWiG. These risks are a further reason to document the decision-making process carefully and to involve legal advisers early, including in communications with authorities that may later be used in investigations.

Managing product recalls in practice

Effective product recalls follow a structured process. Companies that prepare a recall plan in advance can move from first signal to decision in days rather than weeks. A typical plan covers:

• Crisis team: quality, engineering, legal, communications, customer service and, for listed companies, investor relations, with a clear decision-maker.
• Risk assessment: using a recognised method, such as the EU risk assessment guidelines for consumer products, to classify severity and probability.
• Traceability: batch and serial data that allow the affected population to be narrowed, reducing cost and disruption.
• Communication: direct contact with registered customers, a recall notice that meets Article 36 GPSR, information for retailers and a hotline or website.
• Logistics: collection, repair or replacement capacity, return shipping at no cost to consumers, and secure disposal.
• Effectiveness checks: monitoring of response rates and follow-up communication where uptake is low.

Listed companies must also consider whether a significant recall is inside information under Article 17 of the Market Abuse Regulation requiring an ad hoc disclosure. Data protection law applies to customer data used to contact affected consumers, although the GPSR expressly supports the use of registration data for safety purposes.

Cost recovery from suppliers

Product recalls are expensive, and the cause often lies with a component or raw material supplier. German sales law offers several routes to recover costs. Where the defect existed when risk passed, the buyer has warranty claims under §§ 437 and 439 BGB, including the costs of removing the defective item and installing a replacement where the buyer had installed it in another item in line with its intended use (§ 439(3) BGB). A seller of newly manufactured goods can take recourse against its supplier for these costs under § 445a BGB, a provision that has applied to all sales of new goods, not only consumer sales, since 2018.

Damages claims against a supplier require fault, which is presumed under § 280(1) BGB, and can cover further losses such as recall logistics, communication costs and lost profit, subject to limits on causation and contributory fault.

Two practical obstacles stand in the way. First, in commercial transactions the buyer must inspect deliveries and give notice of defects without delay under § 377 of the Commercial Code (HGB); failure to do so can forfeit claims for patent defects. Second, suppliers' standard terms often limit liability. Clauses in standard terms are reviewed under §§ 305 to 310 BGB, and in business-to-business relationships German courts strike down many broad exclusions. Quality assurance agreements that allocate recall costs, set out cooperation duties and regulate the handling of incoming inspections reduce disputes. Where a recall is caused by several suppliers, joint and several liability and internal apportionment become relevant.

Insurance for product recalls

General commercial liability insurance in Germany typically covers third-party claims for personal injury and property damage, but not the company's own costs of carrying out a recall. Recall costs are covered, if at all, by separate product recall or product contamination policies, or by extensions to liability cover for specific cost items such as removal and installation costs. Policy wording varies considerably, and coverage often depends on whether the recall was required by law or ordered by an authority, on notification deadlines and on the insurer's consent before costs are incurred.

Companies should therefore check their cover before a crisis, align the recall plan with policy conditions and notify insurers early. In disputes with insurers, the documented risk assessment and the authority's involvement are often decisive. Where the cause lies with a supplier, the insurer may take over recourse claims after payment, so preserving evidence and contractual rights against the supplier matters for both sides. Retained samples, test reports, delivery records and correspondence with the supplier should be secured from the start of the investigation, ideally under a litigation hold.

How TRW & Co helps

We advise manufacturers, importers, retailers and suppliers on product recalls in Germany, from the first risk signal to the final cost recovery. We assess notification duties under the General Product Safety Regulation and sector rules, communicate with market surveillance authorities, review recall notices and remedies, and coordinate with insurers. Afterwards we pursue or defend recourse claims along the supply chain, in court or in arbitration, and help clients redesign quality and supply agreements.

Our product liability team works with colleagues in commercial contracts and commercial litigation; see also our note on the new Product Liability Directive. Please contact us if you are facing a potential recall. This briefing is general information, not legal advice.