The European Commission has put forward plans for an AI Liability Directive to address the increasing use of artificial intelligence enabled products and services across the 27 member countries of the EU.

The Directive would make it easier for individuals and companies to sue makers of drones, robots and other products equipped with artificial intelligence software for compensation for harm caused by them.

The Commission also announced an update to the Product Liability Directive that means manufacturers will be liable for all unsafe products, tangible and intangible, including software and digital services, and also after the products are sold.

The move is expected to have a strong economic impact on many individuals, companies, and organisations with its effects extending beyond the European Union’s borders, to reach foreign tech companies that operate within the EU.

The AI Liability Directive will need to be adopted by the European Parliament and the Council and then agreed with EU countries and EU lawmakers before it can become law. It is proposed that five years after the entry into force of the Directive, the Commission will assess the need for no-fault liability rules for AI-related claims if necessary.

The current EU rules on product liability, based on the strict liability of manufacturers, are almost 40 years old and the Commission has made it clear the Directive adapts private law to the new challenges brought by AI. “Together with the revision of the Product Liability Directive, these initiatives complement the Commission's effort to make liability rules fit for the green and digital transition:” stated the Commission.

Under the draft rules, victims can seek compensation for harm to their life, property, health and privacy due to the fault or omission of a provider, developer or user of AI technology, or for discrimination in a recruitment process using AI. "We want the same level of protection for victims of damage caused by AI as for victims of old technologies," said Justice Commissioner Didier Reynders.

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:

· 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.

· Victims will have more tools to seek legal reparation, by introducing a right of access to evidence from companies and suppliers, in cases in which high-risk AI is involved so that they can identify the liable person and the fault that caused the damage.

Users can sue for compensation when software updates render their smart-home products unsafe or when manufacturers fail to fix cybersecurity gaps. Those with unsafe non-EU products will be able to sue the manufacturer's EU representative for compensation.

Commissioner for Justice, Didier Reynders, said: “While considering the huge potential of new technologies, we must always ensure the safety of consumers. Proper standards of protection for EU citizens are the basis for consumer trust and therefore successful innovation.

“New technologies like drones or delivery services operated by AI can only work when consumers feel safe and protected. We propose modern liability rules that will do just that. We make our legal framework fit for the realities of the digital transformation.”

W Denis arrange liability insurance for businesses and directors throughout the world and if you would like a quotation or to hear more about our services or have any queries, please visit www.wdenis.eu or contact Vida Jarašiūnaitė Vida.Jarasiunaite@wdenis.eu