Saeima adopts no-fault liability law for defective AI and services

Latvia’s Saeima on 29 October 2026 adopted in third and final reading the new Law on Liability for Damage Caused by Defects in Goods and Services. It requires manufacturers and service providers to compensate damage caused by defective goods or services, including harm to life, health, property or data, as well as pain, suffering and other non-material damage.

For companies, the central change is no-fault liability. A claimant will not need to prove the company’s fault, but must establish that the good or service was defective and that the defect caused the damage. The law therefore shifts the practical focus to product safety, service design, incident evidence and the ability to establish or challenge causation.

AI, software and data

The law extends beyond physical products to software and other digital technologies. Its scope expressly includes operating systems, applications, computer programmes, artificial intelligence systems and other digital solutions where a defect causes damage.

It does not cover digital content such as e-books or media files. The distinction means that a defective software product may fall within the liability regime, while a defective standalone digital file may not.

Individuals can also claim for damaged or destroyed data, provided the data were not used for professional purposes. This exposes providers to claims for data loss even where no physical property was damaged, subject to the claimant proving the defect and causal link.

Services covered include those that manufacture, improve or alter a thing, and services capable of directly or indirectly affecting human health or life. The relevant liable party may therefore extend beyond a conventional manufacturer to providers whose service output or performance creates the damage.

The law also covers consumers who buy goods directly online from third countries. In those cases, it foresees that a responsible market operator will be identifiable within the European Union and may be held liable for damage caused by the defective product.

Bird & Bird noted that the EU Product Liability Directive treats AI software as a product from 9 December 2026 and applies no-fault liability to qualifying damage, including injury, private-property damage and destruction of private data. The Latvian law’s commencement date is the same.

Claims and commencement

A claim may be brought within three years from the day the injured person learned of the damage caused by the defect. The law enters into force on 9 December 2026.