Numerous discussions have focused on the European Union's AI Act, yet it lacks provisions for individual citizens to claim compensation for damages caused by AI systems.The European Commission deliberately chose to address AI liability through the lens of product liability. In this blog, we explore the implications of the new Product Liability Directive and the AI Liability Directive, and their connections to the AI Act, for understanding AI liability in the EU.
A few days after the political agreement on the much-discussed AI Act (see our blogpost), there was another political agreement on a key piece of AI legislation, admittedly less in the spotlight, but also very important. The Spanish Presidency and the European Parliament have reached on the 14th of December 2023 a political agreement on a new directive which will update the existing Product Liability Directive for defective products to better reflect the fact that many products now have digital features and that the economy is becoming increasingly circular.
In September 2022, the European Commission proposed the AI Liability Directive, providing a legal framework for individuals adversely affected by AI system outputs to pursue legal action against the AI operators. This directive introduces new procedures for fault-based liability for damage caused by AI systems.
Currently, the AI Liability Directive is going through the EU's legislative process.
In the AI Act is government intervention through national supervisory authorities the main enforcement mechanism. These authorities can impose fines, issue binding instructions or restrictions, and even order certain AI practices to cease entirely. This is very similar to the GDPR.
However, there is a direct link with the above directives. Failure to comply with the requirements of the AI Act constitutes a breach of the relevant duty of care under the provisions of these directives. And a breach of a relevant duty of care by AI operators automatically makes them liable for damages.
The forthcoming AI Act and related liability directives signify transformative shifts in the EU's approach to AI regulation, blending proactive damage prevention with effective post-incident solutions. Companies must adapt proactively to these evolving EU AI regulations to foster innovation, compliance, and operational confidence.
Seeking further insights into the Product Liability Directive, AI Liability Directive, or AI Act? Reach out to Timelex for expert guidance.