EU fails to tackle AI risk with PLD, claims Irish NGO

Despite sharp criticism from the European business community for being too harsh and opening up the potential for potential mass litigation, the EU’s proposed revision of the Product Liability Directive (PLD) and related AI Liability Directive (AILD) has been branded too weak by The Irish Council for Civil Liabilities (ICCL). The ICCL was not impressed. “These two directives together were supposed to complement the EU AI Act. However, in the year since the Commission’s proposal, only the PLD progressed through the legislative process. The PLD is intended to enable people to hold companies liable, but it fails to protect people from harms,” said the NGO. The good news, according to the civil rights group, is the PLD makes it clear that software is a product, and companies that provide software can be held liable for damage, including psychological harm and corrupted data. “Manufacturers of products will also be liable as long as they have control over the product. As we had previously written, software and AI models are updateable, and remain in control of the manufacturer after the product is placed on the market,” noted the ICCL. “The PLD clarifies that this liability regime does not apply to free and open-source software (FOSS). This will allow FOSS to continue to flourish and developers of FOSS projects to contribute without worrying about liability,” pointed out the group. But the ICCL was disappointed to see that the updated PLD continues to place the burden of proof on victims instead of the manufacturer. “The victims have to prove the defectiveness of the product, the damage suffered due to the product (such as AI systems) and the causal link between the two. This is challenging and will limit claims when people are harmed,” it said. “National courts could presume defectiveness and/or the causal link where the victim has difficulties to prove due to technical complexity. The AILD was supposed to alleviate a victim’s difficulty in accessing evidence when they are harmed by AI systems. However, as it is unclear if the AILD will become a law, people harmed by AI systems would be entirely dependent on this possibility of presumption in the PLD being upheld by national courts. It remains to be seen how this provision will be implemented,” added the ICCL. Development risk defence is also not removed in the updated PLD, said the group. This defence allows companies to be exempt from liability if they can prove that the defect was not known when the product was placed on the market. This could result in a “perverse incentive” in an industry like AI, said the group. “Safety research could take a backseat as a result,” it warned. However, member states can choose to remove the development risk defence for certain sectors if “justified by public interest objectives”. “We hope that many members states will include this provision in the national legislation,” said ICCL. Dr Kris Shrishak, ICCL enforce senior fellow, said: “The updated Product Liability Directive is a lost opportunity for the EU. Legal clarity around software as a product and exemption for FOSS are positives. However, the failure to reverse the burden of proof for products such as AI systems is deeply concerning. And the lack of progress made by lawmakers on the AI Liability Directive means that people harmed by AI systems could be left in a limbo.”

EU fails to tackle AI risk with PLD, claims Irish NGO

Failure to progress AI liability leaves people in limbo

Want to read this article?

Read Next

Establishing a captive insurer – IPT compliance considerations

Supply chains warned of further disruption and costs as Red Sea risk zone widened

Howden’s data analysis finds insurers should be taking on more cyber risk

Asian investors urge action on nature-related risk

Belgian mutuals say Europe is ‘relegating’ climate in new legislative programme

Establishing a captive insurer – IPT compliance considerations

Supply chains warned of further disruption and costs as Red Sea risk zone widened

Howden’s data analysis finds insurers should be taking on more cyber risk

Asian investors urge action on nature-related risk

Belgian mutuals say Europe is ‘relegating’ climate in new legislative programme

Want to read this article?

Read Next

Establishing a captive insurer – IPT compliance considerations

Supply chains warned of further disruption and costs as Red Sea risk zone widened

Howden’s data analysis finds insurers should be taking on more cyber risk

Asian investors urge action on nature-related risk

Belgian mutuals say Europe is ‘relegating’ climate in new legislative programme

Related Articles