Germany’s Draft Product Liability Reform

On 11 September 2025, the German Federal Ministry of Justice has published its draft bill to modernize the Product Liability Act (Produkthaftungsgesetz, ProdHaftG)) implementing the Directive (EU) 2024/2853 of the European Parliament and of the Council of 23 October 2024 on liability for defective products and repealing Council Directive 85/374/EEC EU Product Liability Directive (Referentenentwurf eines Gesetzes zur Modernisierung des Produkthaftungsrechts (PLD Implementation Act and (EU PLD)). The EU PLD will apply with regard to products placed on the market or put into service from 9 December 2026 onwards. Member States have time until that time to implement the EU PLD.

The German medical technology association (Bundesverband Medizintechnologie e.V., BVMed), raises substantial concerns for the MedTech and broader life sciences sector in its position paper of 10 October 2025.

This alert summarizes the key reforms, outlines BVMed’s principal objections, and assesses the practical implications for manufacturers, software and digital health developers as well as distributors in the life sciences sector operating in Germany.

 

Scope Expansion: From Tangible Products to Software and Digital Ecosystems

In general, the ProdHaftG provides for the strict liability of manufacturers for damage caused by their defective products. In this respect, at the heart of the EU PLD and the PLD Implementation Act is a significant expansion of what qualifies as a “product”. Beyond tangible movables, the EU PLD captures software, digital design documents, and, through the component concept, digitally connected services that may be delivered by third parties.

For life sciences sector, this means that medical devices with embedded software, standalone medical apps, AI-enabled modules, and cloud-delivered functionalities could all fall within product liability exposure.

Particularly in technology-heavy therapeutic areas and connected medical devices this expansion of the scope, combined with the adapted evidentiary rules including presumptions of the defectiveness of the product and causality between the defectiveness and the damage claimed, a kind of discovery mechanism as well as the extension of the recoverable damage, is expected to increase both the frequency and complexity of product liability disputes.

 

Presumptions and the risk of a de facto shift of the burden of proof

The PLD Implementation Act is about to introduce presumptions as to the presence of “product defects” and the causality between a product defect and the infringement (causation) or both in situations that are defined using broad and imprecise terms. These presumptions could arise, for example, from an “obvious malfunction during reasonably foreseeable use” or where the “nature of the injury” is typically attributable to the alleged defect. In technically or scientifically complex cases, courts could presume defect and/or causation if plaintiffs demonstrate that providing proof would be “excessively difficult” and that a defect or causation is “more likely.”

BVMed warns that, although this was not the intention of the EU PLD, the combined effect of these rules could result in an indirect reversal of the burden of proof. This would increase the risk of litigation exposure even where no actual product defect exists. This is particularly true for new technologies like in the MedTech sector, which by their nature, involve complex clinical and engineering evidence. BVMed emphasizes that the use of such undefined legal terms is associated with legal uncertainty and limited predictability, as their interpretation is at the discretion of the courts. Furthermore, BVMed believes that the discussion about the correct interpretation of such formulations could significantly prolong product liability proceedings.

 

Disclosure of evidence: A paradigm shift in the exposure of trade secrets

The PLD Implementation Act introduces a disclosure mechanism triggered after a “plausibility” threshold is met, allowing both claimants and defendants to request access to relevant evidence held by the other party in legal proceedings.

Although disclosure is nominally limited to what is necessary and proportionate, BVMed highlights the absence of precise safeguards and clear standards regarding this disclosure mechanism. Without tight controls, disclosure could be used offensively to compel production of confidential technical files, design documentation, source code, clinical and post-market data, and supplier information.

 

Mass and Class Actions: Amplified litigation dynamics

The PLD Implementation Act is part of a wider European trend towards collective redress like the German Consumer Rights Enforcement Act (Gesetz zur gebündelten Durchsetzung von Verbraucherrechten (VDuG)) and Directive (EU) 2020/1828 of the European Parliament and of the council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC (Representative Actions Directive, EU RAD).

BVMed expects the new product liability law to become an important forum for mass and class actions, partly driven by the growing role of litigation financing in Germany. The resulting dual system of ex-ante regulatory compliance and ex-post class actions would entail considerable costs and organizational burdens. While large manufacturers are likely to be the target of such lawsuits, small and medium-sized enterprises could come under pressure to settle early due to limited resources, which could lead to distorted outcomes regardless of the merits of the case.

 

BVMed’s proposed guardrails

While acknowledging that the PLD Implementation Act would transpose the EU PLD in a coherent manner, in line with the guidelines, BVMed is calling for the following safeguards in Germany to minimize the above-mentioned risks:

• First, BVMed calls for a narrow interpretation of all undefined legal terms that trigger presumptions by German courts, reaffirming that the burden of proof for defect, causation, and damage remains with the claimant except in strictly defined, exceptional circumstances.

• Second, on disclosure, BVMed urges German courts to adopt a strict plausibility threshold and rigorous necessity and proportionality tests, with trade secrets protection prioritized at every stage. For example, BVMed proposes sequence disclosure in stages (from metadata to excerpts to full documents), as well as closed hearings and restricted access regimes where necessary.

• Third, BVMed is seeking alignment with the VDuG and the EU RAD. This includes ensuring transparency regarding litigation funding and granting German courts the power to prevent abusive collective claims and conflicts of interest.

 

Practical Implications for companies operating in the life sciences sector

While regarding medicinal products the EU PLD as well as the PLD Implementation Act acknowledge the German Medicinal Products Act (Arzneimittelgesetz, AMG) as lex specialis, in particular for medical device manufacturers, diagnostics firms, digital health and software developers, and/or suppliers, the reform initiated by the EU PLD will recalibrate litigation risk across the product lifecycle. To be prepared, product definitions and component (risk) mapping should cover all products on the German market or sold in Germany that include software, digital services, third-party components or IoT/connected functionality. The assessment should identify where liability risks may reside, for example regarding component manufacturers, online platform operators, could-service providers or third-party updates. Technical documentation strategies may need retooling to minimize unnecessary exposure without compromising regulatory readiness. This includes a proactive assessment of cybersecurity risks to ensure compliance with applicable data protection and cybersecurity standards – acknowledging that cybersecurity now becomes an integral part of product safety. Post-market surveillance and complaint handling should be calibrated to the draft’s presumption triggers, with clear protocols for investigating “obvious malfunctions” and documenting reasonably foreseeable use.

Equally, companies in the MedTech sector should prepare for targeted disclosure demands. Trade secret redaction protocols and confidentiality undertakings should be designed now and tested for rapid deployment. Contract frameworks with suppliers and software vendors should address disclosure cooperation, privilege considerations, and aligned defense strategies.

In parallel, businesses must ensure readiness for collective claims, encompassing funding strategies, disclosure obligations, communication protocols, governance structures, and cross-jurisdictional coordination as mass litigation channels continue to expand. This includes careful modelling of retention and defense costs, alongside a thorough review of existing product liability and cyber/technology liability insurance coverage. Furthermore, targeted internal training should be implemented for R&D, quality assurance, regulatory affairs, legal, and compliance teams. Escalation protocols should also be updated to reflect the evolving risk landscape introduced by the EU PLD.

 

Strategic takeaways

The PLD Implementation Act is expected to significantly increase product liability exposure in Germany, particularly for software-enabled and data-driven medical technologies. Since Article 3 of the EU PLD leaves Member States with very limited flexibility in transposing its provisions, MedTech companies should closely monitor the implementation process across all jurisdictions of the Member States and align their strategies with the wording of the EU PLD from the outset.

Most significant risks - as emphasized by the BVMed - arise from three factors: an expanded definition of “product,” evidentiary presumptions in complex technical cases, and a broad disclosure regime that may jeopardize confidential information. Although restrictive, court-driven interpretations could soften these impacts, companies should generally anticipate more intensive and complex litigation.

Life sciences businesses should now evaluate their risk posture, prioritizing robust technical documentation, post-market evidence strategies, confidentiality and disclosure safeguards, and readiness for collective actions. Taking these steps will help them withstand the procedural and substantive challenges expected as Germany enacts the EU PLD.