In December 2024, the new and controversially discussed Product Liability Directive (EU) 2024/2853 (PLD) entered into force. The German legislator must transpose it into national law by 9 December 2026. The Federal Government published a draft bill on 17 December 2025 (Regierungsentwurf, printed matter 775/25), which largely mirrors the earlier draft published by the Federal Ministry of Justice and Consumer Protection on 11 September 2025. This draft demonstrates how Germany could transpose the PLD into national law. Decision-makers within companies are well advised to engage at an early stage with the proposed draft for a new German Product Liability Act (PLA-D) that the draft bill contains, the far-reaching substantive changes it entails and the consequences for product liability proceedings.

Courts may now order the disclosure of evidence in product liability proceedings (Sec. 19 PLA-D), which has particular practical relevance. This new disclosure obligation will likely increase litigation risks: courts can issue disclosure orders based on low requirements, while the scope of disclosure may be far-reaching . Non-compliance with a disclosure order may result in a statutory presumption of a product defect (Sec. 20 PLA-D), which means the claimant will effectively succeed in the case.

Manufacturers of products serve as the primary addressees of a disclosure order. The term “products” now refers not only to tangible items and electricity, but also to digital products, software and AI systems. Consequently, potential disclosure orders in public proceedings create the risk that companies could leak information and lose control over trade secrets and other confidential information.

Whether the provisions of the PLA-D will enter national law in their currently published form remains unclear, especially given the recent (critical) statements associations have issued. In principle, the PLD harmonizes the law – meaning that national legislators generally cannot fall below or exceed the protection standards the PLD sets. Nevertheless, legislators retain some discretion regarding the details of implementation.

Decision-makers should closely monitor the further legislative process and begin to evaluate. Under what circumstances does the risk of disclosure arise, and how can it be prevented, or at least control any information leaks?

This briefing addresses the following questions:

• When is a disclosure order likely to be issued, and what risks does this pose for trade secrets?
• How may the disclosure obligation affect product liability proceedings?
• How can companies reduce or control the risk of information leakage?

1. The draft new Product Liability Act

The PLA-D provides for an almost verbatim transposition of the PLD into German law. As anticipated, this comprehensive reform of national product liability law marks a turning point for German product liability law.

Part 1 addresses the manufacturer's liability and contains the key innovations in substantive law. According to Sec. 2, the law revises the definition of "product" and now explicitly includes software (including AI systems and digital design files) that companies market for consumption, i.e., "place on the market" or "put into service" (Sec. 6(2)).

Section 7 modifies the definition of "defect" by requiring courts to consider aspects such as the product's capacity to learn, relevant cybersecurity requirements, and foreseeable interactions with other products. The law also amends the relevant point in time for assessing defectiveness: According to Sec. 8, courts no longer limit the assessment to the product's placement on the market. Courts may instead consider the moment when companies put the product into service or when the manufacturer loses control over the product as relevant alternatives, for example, as the manufacturer's ability to supply software updates evidences.

Part 2 (Sections 10 to 13) introduces an extended liability cascade to enable injured parties to pursue an action against an EU-based economic operator, even in cases involving imported goods. Liable parties may include authorized representatives, fulfilment service providers, distributors and providers of online platforms. The law generally treats these parties as liable as if they were the manufacturer, but they can avoid liability by naming a primarily liable economic operator (subordinated liability).

In addition, Part 3 introduces further substantive changes providing that Sec. 249(2) of the German Civil Code (BGB) – which in principle applies only to personal injury and property damage – will now explicitly encompass the destruction or damage of data (Sec. 14). Furthermore, the law fully abolishes the deductible for property damage and the cap on personal injury compensation. The ten-year period from the product’s placement on the market, after which the claim expires (Sec. 17), essentially remains but restarts in the event of significant modifications (Sec. 5) and extends to 25 years in cases of latent disease progression.

As a second core element of the reform, Part 4 introduces new rules of evidence, including a disclosure obligation under Sec. 19.  Closely linked to this, Sec. 20 implements the presumptions introduced by Art. 10 PLD, which presumes a product defect if the defendant fails to comply with a disclosure obligation. Causation is presumed if the defect is established and the type of harm is typically attributable to the defect. In cases of excessive technical or scientific complexity, a mere probability of defectiveness and/or causation may suffice to assume a causal connection, thus significantly lowering the evidentiary requirements.

2. The new disclosure obligation

The PLA-D transposes the new disclosure obligation into Sec. 19. As lex specialis, the provision will likely reduce the significance of the more general disclosure and document production mechanisms of Sec. 142 et seq. of the German Code of Civil Procedure (ZPO) and Sec. 421 et seq. ZPO.

The following sets out the key requirements (see 2.1), the content and scope of a disclosure order pursuant to Sec. 19 PLA-D (see 2.2) and, finally, the resulting risks of trade secret leak (see 2.3).

2.1 Requirements for a disclosure order

Traditionally, each party in German civil litigation must prove the facts favorable to it. There is no obligation to actively assist the opposing party in obtaining and producing evidence. This principle of party presentation (Beibringungsgrundsatz) also applies in product liability proceedings, whereby the claimant bears the burden of substantiation and proof of the product defect, the damage and causation (see also Art. 10(1) PLD).

The disclosure obligation Art. 9 PLD introduces and Sec. 19 PLA-D transposes, together with the possible sanctions for non-compliance, at least partially relaxes this principle. According to Sec. 19, a court may order the defendant to disclose evidence if the claimant has presented facts and evidence that sufficiently support the plausibility of the claim. The disclosure obligation is intended to enable the court to require a party to produce even evidence that may be unfavorable to it.

The European legislator’s objective is to eliminate a potential asymmetry of information (Recital 42 PLD). For modern, highly complex products – particularly for digital products and AI systems – injured parties often lack insight into and understanding of internal product processes (black box problem).

Upon the claimant's request, the court may now order the defendant – e.g., the manufacturer – to disclose "relevant evidence" (see 2.2) within its control. The law requires that the claimant presents its claim "plausibly" for courts to issue a disclosure order. The legislator does not further define the term “plausibility”, thus leaving courts to interpret it. Courts will likely draw on comparable provisions such as Sec. 33g of the German Antitrust Act (GWB), i.e., requiring a certain degree of specificity and likelihood of the claim, aligned with the claimant's ability to provide evidence. These and similar indeterminate legal terms within the provision will likely generate significant controversy.

2.2 Content of the disclosure order and sanctions for non-compliance

The disclosure obligation applies to all “relevant evidence”, which is not further defined.

Courts will likely interpret the term "evidence" in line with the types of evidence customary in civil proceedings (e.g. documents and physical objects relating to product design, product analyses, or information on technical processes). In any case, this will include information containing trade or business secrets.

Courts will have broad discretion in determining what constitutes “relevant” evidence. In particular, it remains unclear whether evidence will be considered “relevant” even if it does not directly prove the damages claim itself but may provide indications of other potential evidence relating to the claim (so-called “train-of-inquiry documents”). The latter would significantly expand the scope of the disclosure obligation.

The scope of disclosure must be limited to what is necessary and proportionate, taking into account legitimate interests, especially trade secrets.

Additionally, the court may order that such evidence be presented in an easily accessible and comprehensible form (Sec. 19(5) PLA-D), meaning the defendant must prepare and organize the material for both the court and the opposing party.

If the defendant fails to comply with a disclosure order, Sec. 20(1) no. 1 PLA-D presumes the product's defectiveness – regardless of whether the defendant acted culpably in failing to disclose. Defendants who face such an order will likely have little choice but to disclose the information as ordered, or risk losing the case (or avoid losing by settling the case).

That said, a “discovery light” modeled on Anglo-American practice, which would go significantly beyond the requirements of the PLD, appears unlikely given the wording of Sec. 19 PLA-D and the traditionally cautious approach German courts take. Courts will not likely allow far-reaching investigations of the opposing party – “fishing expeditions” – under the new rules. In addition, the provision requires that proceedings are already pending.

2.3 Risks for corporate information

Every disclosure order inherently carries the risk of uncontrollable and potentially damaging information leak. This includes not only disclosure to the opposing party and its legal counsel, but also to the public, including competitors or the press, who may attend the generally public oral hearings. If the trial discusses sensitive information, the risk arises that this information will leak to a broad "interested public".

The disclosure order thus operates within a field of tension: the possibilities for expanded and more effective access to information within a proceeding almost inevitably curtail a company’s ability to protect corporate information, particularly trade secrets.

It remains unclear how this tension and the risk allocation in product liability proceedings will ultimately be balanced. Both the European legislator (see Recital 45, Art. 9(4), (5) PLD) and the German legislator recognize in principle the need to protect trade secrets.

Courts must resolve this tension on a case-by-case basis within their discretion . The court must weigh the legitimate interests of both parties and, in particular, consider the defendant’s interest in protecting its trade secrets (Sec. 19(3)). At the same time, it should examine whether measures to protect confidentiality are appropriate (Sec. 19(4)).

Consequently, under the new product liability regime, courts may conceivably require a defendant to disclose sensitive information that fundamentally determines the product's value. For example, a disclosure order could cover documents relating to design or manufacturing processes that represent the result of years of costly research. It is also conceivable that disclosure could extend to algorithms, training data, or data on product monitoring for digital and AI-based products.

The option provided in Art. 9(2) PLD and transposed into Sec. 19(2) PLA-D to order disclosure of information in favor of defendants is unlikely to offset the risks posed by paragraph 1.

3. Protection of trade secrets in the context of a disclosure obligation

Regardless of how German civil (procedural) law will ultimately implement the disclosure obligation, such an obligation poses significant risks that companies will have to reveal internal business information during litigation. Companies will therefore have to consider how to respond in the event of a disclosure order (see 3.1) and how to (proactively) reduce the risk of such a disclosure order (see 3.2). Overall, it will be advisable to critically review existing trade secret protection concepts (see 3.3).

3.1 Procedural protection in the event of disclosure orders

In practice, the primary focus will likely be on dealing with disclosure orders within product liability proceedings.

First, according to Sec. 19(4) sentence 2 PLA-D, trade secrets subject to disclosure may be placed under the protection of the Trade Secrets Act (GeschGehG) (see 3.1.1). Alternatively, there is the option of conducting so-called in-camera proceedings (see 3.1.2), as well as excluding the public from the oral hearing (Sec. 172 no. 2 of the Courts Constitution Act (GVG)) (see 3.1.3).

3.1.1 Disclosure under the protection of the Trade Secrets Act, Sec. 19(4) PLA-D

Under Sec. 19(4) sentence 2, Sections 16 to 20 GeschGehG apply in a way that the court may also impose the protective measures provided therein ex officio – such as classifying information as requiring confidentiality or ordering access restrictions.

As a lex specialis, this provision takes precedence over the more general Sec. 273a ZPO, which was introduced on 1 April 2025 and allows the court, upon a party’s request, to classify information at issue as confidential.

Courts first require that the information can constitute a trade secret within the meaning of Sec. 2 no. 1 GeschGehG before classifying it as such, which the party invoking trade secret protection must substantiate (glaubhaft machen). The definition of a trade secret under the GeschGehG largely corresponds to that in Art. 2 of Directive (EU) 2016/943, but additionally requires a legitimate interest of the information holder in maintaining confidentiality. Whether information qualifies as a trade secret depends on the circumstances of the individual case, particularly the significance of the information for business operations and product protection, as well as existing confidentiality measures (Sec. 2 no. 1 lit. b) GeschGehG). There will likely be a strong interest in protecting value-defining product information, such as software source code and digital product data. Companies can reinforce trade secret protection through high (technical) access barriers.

Once information is classified as confidential, this triggers a two-tier protection regime under Sec. 16 to 20 GeschGehG.

At the first tier, all participants in the proceedings (parties, lawyers, witnesses, etc.) are subject to strict confidentiality obligations. Use or disclosure of the confidential information outside the ongoing proceedings is prohibited and may be sanctioned with fines of up to €100,000, imprisonment or even criminal penalties. This obligation continues after the conclusion of the proceedings.

At the second tier, the court may further restrict access to documents and oral hearings upon special request. Typically, the requesting party must submit a redacted version of the documents. A complete exclusion of the opposing party from this information is not provided for; to safeguard the right to be heard, the law requires that at least one natural person from each party (and their lawyers) must be granted access to the information. If third parties inspect the case files, confidential information will be redacted.

However, Sec. 19(3) and (4) of the PLA-D are unlikely to provide complete protection against the leak of trade secrets. The opposing party still gains insight into the trade secrets, and once knowledge is obtained, it remains with this party. Moreover, proving unlawful use of the information is difficult in practice, meaning sanctions may not always be effective.

3.1.2 In-camera proceedings

Another possible measure to protect trade secrets is the conduct of in-camera proceedings (also referred to as “civil procedural confidentiality proceedings” or “black-box proceedings”), modelled on the US system. This option has been discussed in the literature, but is not addressed in the PLA-D.

In in-camera proceedings, the party bearing the burden of proof provides the opposing party with a redacted version of the evidence, concealing trade secrets. The court – and in some cases a representative of the opposing party – receives an unredacted version of the evidence. The court can then assess whether the redacted parts are relevant to the decision and, if necessary, order further disclosure under Sec. 142 ZPO. If the party fails to comply with such an order, this may negatively affect the court’s assessment of the evidence.

This procedure offers the advantage that the opposing party does not gain access to trade secrets, thus eliminating the risk of disclosure or misuse from the outset.

However, German civil procedure does not formally provide for such a mechanism; it relies entirely on the voluntary consent of both parties. In light of the newly introduced Sec. 273a ZPO, which expressly requires that the opposing party be granted access, it is questionable whether parties will still have an interest in agreeing to an in-camera procedure. This will not be the case where the redacted portions are relevant to the opposing party or concern information decisive to the dispute.

3.1.3 Exclusion of the public

Under Sec. 172 no. 2 GVG, the court has the option to exclude the public from the hearing (in whole or in part) if an important business, operational, invention or tax secret is discussed during the proceedings and its public disclosure would infringe overriding legitimate interests. However, written submissions are not covered by Sec. 172 no. 2 GVG.

The decisive factor is whether the entitled party has a legitimate interest in preventing dissemination. Exclusion is therefore possible, for example, if details relating to software or company-specific know-how are discussed during the hearing or if an expert is examined on such matters.

In addition, the court may impose a confidentiality obligation backed by criminal sanctions on those present, although courts rarely do this in practice. Furthermore, such an order merely prevents the disclosure of the secret to third parties.

Overall, the protection afforded by the GVG is incomplete, and the risk of information leakage to parties to the proceedings or third parties cannot be ruled out.

3.2 Proactive risk mitigation

Decision-makers in legal departments will need to examine how companies can reduce the risk of disclosure even before potential court proceedings arise.

Companies can structure their internal processes so that relevant information qualifies as a trade secret, thereby imposing stricter requirements on its disclosure in any potential litigation. Companies will likely have relevant influence only over the framework conditions that the court will consider when weighing the parties’ interests. The higher the value of the information, the more likely the balance will favor the defendant.

The court will need to consider whether and how confidentiality measures protect the information. If the defendant has implemented protective measures, such as technical access restrictions (for example, safeguarding sensitive electronic data through passwords or two-factor authentication), this could weigh in its favor. Likewise, formal safeguards already common in practice – such as contractual confidentiality agreements with authorized individuals and internal company or departmental confidentiality policies – are suitable for positively influencing the court’s assessment.

However, the extent to which such measures can decisively affect the court’s disclosure decision remains uncertain. According to the European legislator’s approach, the classification of information as a trade secret does not in itself preclude its disclosure. Internal (technical) security concepts will therefore generally not substantially reduce the risk of a disclosure order.

3.3 Conclusion

With the introduction of an extensive disclosure obligation, both the European and German legislators have created significant new risks of trade secrets being leaked. The precise implementation, design and handling by the courts remain to be seen.

Decision-makers in legal departments should therefore immediately reconsider their trade secret protection concepts. Given the wide range of possible scenarios, there is unlikely to be a “one size fits all” solution. Rather, prevention and the appropriate response to disclosure orders will depend heavily on the circumstances of the individual case. In some instances, deliberately accepting a loss in litigation may even carry less risk than a broad leakage of confidential information.

Early legal advice and prudent litigation management can help reduce the risk of information leakage. A combination of the procedural instruments outlined above tailored to the individual circumstances of the case will likely be advisable.

4. How can we support you?

Our team of highly specialized lawyers has extensive and long-standing experience in advising clients from a wide range of industry sectors. A key focus of our advisory work concerns the handling and protection of sensitive information. Our advisory services include:

• Risk evaluation (including regarding the documentation and protection of sensitive corporate information and the prevention of information leakage);
• Development of viable preventive risk mitigation concepts and defense strategies;
• Conducting litigation to defend against claims by consumers and companies, including in the context of mass proceedings and class actions;
• Deployment of tailored legal tech solutions from the Freshfields Lab, including for preparing complex facts, presenting relevant legal issues and arguments clearly, and analyzing and calculating various risk scenarios.

5. Further helpful information on the PLD

Further information on the ProdHaftRL can be found in our blog posts and briefings:

• Product Risks Today: Digital services in the scope of the new Product Liability Directive, Moritz Becker, Lutz Riede, Kristina Weiler, Anita Bell, Hannah Meyer
• The EU Product Liability Directive: Key Implications for Software and AI, Moritz Becker, Lutz Riede, Kristina Weiler, Anita Bell, Christina Moellnitz
• The new Product Liability Directive, Andrew Austin, Moritz Becker, Laura Knoke, Kristina Weiler, Harriet Hanks, Anita Bell
• A new regime for a new era: How the EU Product Liability Directive will reshape product liability in Germany, Moritz Becker, Patrick Schroeder, Martin Mekat, Kristina Weiler, Anita Bell, Hannah Meyer
• The EU Product Liability Directive: Product liability as a prime use case for mass litigation and collective redress in Germany?, Kristina Weiler, Moritz Becker, Patrick Schroeder, Laura Knoke, Anita Bell, Hendrik Wilkens, Kilian Gramsch