Artificial Intelligence And Liability: Key Takeaways From Recent EU Legislative Initiatives

Recent EU initiatives aim to ensure AI systems are safe, transparent, and non-discriminatory, introducing comprehensive liability frameworks to address AI-related harms.

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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly. Alongside the introduction of the AI Act, the EU is revising its product liability regime to ensure that, where AI systems cause harm to users, there are appropriate recourse and compensation mechanisms.

European Commission proposals

The European Commission made two proposals in 2022 to ensure that the product liability regime can respond to the specific challenges faced by AI:

Revisions to the Product Liability Directive (85/374/EEC) (the PLD). The PLD imposes strict liability where a defective product causes material damage to consumers or their property.
The introduction of the AI Liability Directive (AILD) to assist claimants in making non-contractual fault-based claims. These will relate to damage caused by, for example, a breach of safety rules or unlawful discrimination based on algorithms embedded in an AI system.

While the two proposals are proceeding on separate timescales, businesses will need to ensure that they are fully aware of their scope and how they will be applied in respect of AI systems. Risk and compliance frameworks and contractual protections need to be reviewed and amended to protect against any potential liability arising from these new areas. It is also important to remember that the revisions to the product liability regime explained in this article will sit alongside other claims that may be available to potential claimants, such as for breach of contract and (in common law jurisdictions at least) claims in tort for negligence.[…]