The current EU rules on product liability, based on the strict liability of manufacturers, are almost 40 years old. The European Commission says that modern rules on liability are important for the green and digital transformation, specifically to adapt to new technologies, like AI.
Therefore, the European Commission has adopted two proposals to adapt liability rules to the digital age, circular economy and the impact of global value chains.
Revised Product Liability Directive
The revised Directive modernises and reinforces the current well-established rules, based on the strict liability of manufacturers, for the compensation of personal injury, damage to property or data loss caused by unsafe products, from garden chairs to advanced machinery. It aims to ensure fair and predictable rules for businesses and consumers alike by:
- Modernising liability rules for circular economy business models: by setting out clear and fair liability rules for companies that substantially modify products.
- Modernising liability rules for products in the digital age: allowing compensation for damage when products like robots, drones or smart-home systems are made unsafe by software updates, AI or digital services that are needed to operate the product, as well as when manufacturers fail to address cybersecurity vulnerabilities.
- Creating a more level playing field between EU and non-EU manufacturers: when customers are injured by unsafe products imported from outside the EU, they will be able to turn to the importer or the manufacturer’s EU representative for compensation.
- Putting consumers on equal footing with manufacturers: by requiring manufacturers to disclose evidence, by introducing more flexibility to the time restrictions to introduce claims, and by alleviating the burden of proof for victims in complex cases, such as those involving pharmaceuticals or AI.
AI Liability Directive
The purpose of the AI Liability Directive is to set out uniform rules for access to information and alleviation of the burden of proof in relation to damages caused by AI systems, establishing broader protection for victims (whether individuals or businesses), and fostering the AI sector by increasing guarantees. It will harmonise certain rules for claims outside of the scope of the Product Liability Directive, where damage is caused due to wrongful behaviour. This covers, for example, breaches of privacy, or damages caused by safety issues. The new rules will, for instance, make it easier to obtain compensation if someone has been discriminated in a recruitment process involving AI technology.
The Directive simplifies the legal process for victims when it comes to proving that someone’s fault led to damage, by introducing two main features: first, in circumstances where a relevant fault has been established and a causal link to the AI performance seems reasonably likely, the so called ‘presumption of causality’ will address the difficulties experienced by victims in having to explain in detail how harm was caused by a specific fault or omission, which can be particularly hard when trying to understand and navigate complex AI systems. Second, victims will have more tools to seek legal reparations, by introducing a right of access to evidence from companies and suppliers, where high-risk AI is involved.
The new rules et out to strike a balance between protecting consumers and fostering innovation, removing additional barriers for victims to access compensation, while laying down guarantees for the AI sector, by introducing, per occurrence, the right to contest a liability claim based on a presumption of causation.
Next steps
The Commission’s proposal will now need to be adopted by the European Parliament and the Council. It is proposed that five years after the entry into force of the AI Liability Directive, the Commission will assess the need for no-fault liability rules for AI-related claims if necessary.
