July 16, 2024

Liability in AI: Who’s responsible when AI goes wrong?

3 min read

The realm of artificial intelligence is rapidly advancing, affecting various sectors including autonomous vehicles, healthcare, financial and legal advisory, and consumer products. This rapid integration raises significant liability concerns, as the boundaries of responsibility shift and blur in the face of AI’s unique capabilities and limitations.

As AI systems take on roles traditionally held by humans, from driving cars to diagnosing illnesses, the legal landscape is evolving to address the complex liability scenarios that emerge. These scenarios not only challenge existing legal frameworks but also necessitate the development of new guidelines and regulations to ensure accountability and protection in the AI–driven world.

What is meant by ‘liability in AI’? 

‘Liability in AI’ predominantly pertains to the legal aspects of responsibility and accountability for damages or injuries caused by AI systems. This involves navigating complex legal territory to determine who is legally at fault when an AI system causes harm: whether it’s the developers, manufacturers, users or other entities involved in the AI’s creation and deployment.

This requires adapting existing legal principles to AI’s unique characteristics such as autonomy and machine learning capabilities, and often challenges traditional notions of liability – necessitating new legal frameworks and regulations specifically tailored to AI technology and its diverse applications.

How do current laws address AI liability? 

Current laws addressing AI liability are still developing and vary between regions like the United States and the European Union. Here are some key aspects to date: 

1. United States

According to the Stanford Law Blog, the US legal system has been relatively slow in regulating AI. Some legal cases suggest that AI developers and manufacturers may not be liable for damages caused by AI systems as long as the AI was non-defective at the time of release.

According to the same article, the Federal Trade Commission (FTC) has proposed guidelines for regulating AI, emphasising transparency, especially in consumer-related decisions. These guidelines suggest AI companies could be held liable under the FTC Act for unfair or deceptive practices.

A recent development is the Bipartisan Framework for the US AI Act, as published in the National Law Review, which aims to establish legal accountability for harm caused by AI, promote transparency and protect consumers, especially in high-risk situations. This framework is still in the proposal stage and not yet enacted as law.

2. European Union

The EU Commission has proposed a legal framework for AI, focusing on fundamental rights and safety, and ensuring those harmed by AI systems have the same level of protection as those harmed by other technologies.

The European Parliament adopted a legislative resolution on civil liability for AI, leading to the proposal of the Artificial Intelligence Liability Directive (AILD). The AILD aims to provide uniform rules for non-contractual civil liability in cases involving AI systems, addressing challenges such as proof and ensuring justified claims are not hindered.

These legal approaches reflect the complexity and novelty of AI technologies, with an emphasis on ensuring safety, transparency and accountability while balancing innovation. The evolving nature of these laws underscores the need for continuous legal adaptation to the unique challenges posed by AI.

Caveat Legal’s offerings

Caveat Legal prides itself on its commitment to staying at the forefront of AI research and market trends. The team understands the dynamic nature of the AI landscape and the importance of being up-to-date and relevant in their approach.

By continuously monitoring the latest developments, Caveat Legal ensures clients receive cutting-edge advice and solutions that align with the rapidly evolving field of AI as follows:

  1. Legal consulting: Caveat Legal offers advice and guidance on the current domestic and international legal landscape affecting AI, including potential risks, best practices and ethical considerations. It offers support in facilitating clients’ understanding of AI governance and offers legal advice on current international regulatory trends.
  2. Policy development: The team assists clients in developing internal policies and guidelines for AI usage and offers support in establishing ethical frameworks, data governance protocols and principles that align with responsible AI practices for organisations.
  3. Contract drafting and negotiation: The team can draft and review contracts that incorporate elements of AI in line with existing legislation e.g. POPIA and GDPR, and contract law specifications.
  4. Compliance strategies: Caveat Legal assists clients in navigating existing regulatory frameworks that may indirectly apply to AI, such as data protection, consumer privacy and industry-specific regulations. And develop compliance strategies that align with current best practices and evolving standards.

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