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New liability rules on products and AI to protect consumers and foster innovation are coming

As part of its initiative to develop a framework for excellence and trust in Artificial Intelligence (AI), the Commission adopted on 28 September 2022 proposals for a revised Product Liability Directive and an AI Liability Directive. The Commission thus seeks to fill the gaps in the current and almost 40 years old legal framework to adapt its rules to the digital age, circular economy and the impact of global value chains.

Modernization of the existing rules

The first proposal refers to the modernization of the existing rules on the strict liability of manufacturers for defective products as set out in the Product Liability Directive (Council Directive 85/374/EEC). The proposal aims at increasing companies’ legal certainty to boost investments and innovation and guarantee a fair compensation for victims of harmful defective products. This revised Product Liability Directive, inter alia, includes :

  • The possibility to be compensated for damage when AI-related products 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; and
  • The possibility for consumers injured by non-EU products to turn to the importer or the manufacturer’s EU representative for compensation; and
  • The creation of a requirement for manufacturers to disclose evidence; and
  • The introduction of flexibility to the time restrictions to introduce claims; and
  • The alleviation of the burden of proof for victims in complex cases.

Targeted harmonization of national liability rules

The second proposal relates to a targeted harmonization of national liability rules for AI with the objective of simplifying the liability rules for victims seeking compensation for AI-related damages. This AI Liability Directive aims at simplifying the access to redress for victims, namely by :

  • Introducing a less stringent burden of proof in relation to damages caused by AI systems; and
  • Establishing broader protection for victims; and
  • Harmonizing certain rules for claims outside of the scope of the Product Liability Directive, in cases in which damage is caused due to wrongful behaviour; and
  • Simplifying the legal process for victims by first creating a presumption of causality in cases where a relevant fault has been established and a causal link to the AI performance seems reasonably likely, and secondly by introducing a right of access to evidence from companies and suppliers.

The Commission’s proposal will next need to be adopted by the European Parliament and the Council.

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