liability

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The directives aim to assist claimants in proving the causation of damages and product defectiveness in complex AI systems, creating legal certainty for providers.

By Deborah J. Kirk, Thomas Vogel, Grace E. Erskine, Ben Leigh, Alex Park, and Amy Smyth

On 28 September 2022, the European Commission issued two proposed directives to reform and clarify liability rules on artificial intelligence (AI):

  1. The Directive on Adapting Non-Contractual Civil Liability Rules to Artificial Intelligence (AI Liability Directive) introduces rules on evidence and causation to facilitate civil claims for damages in respect of harm to end users caused by AI systems.
  2. The Directive on Liability for Defective Products (Revised Product Liability Directive) seeks to repeal and replace the 1985 Product Liability Directive (Directive 85/374/EEC) with an updated framework to better reflect the digital economy. The Revised Product Liability Directive proposes to explicitly include AI products within the scope of its strict liability regime and to modify the burden of proof for establishing defectiveness of technically or scientifically complex products like AI systems.

Recent developments at the CJEU give some shape to the practical implications of Article 17 of the Copyright Directive.

By Jean-Luc Juhan, Susan Kempe-Mueller, Deborah Kirk, Elva Cullen, Alex Park, Pia Sophie Sösemann, Victoria Wan, and Amy Smyth

7 June 2021 was the implementation deadline for the Copyright in the Digital Single Market Directive (EU) 2019/790 (the Copyright Directive), yet just four EU Member States (including Germany and the Netherlands) have fully transposed the Copyright Directive, whilst four others (including France and Denmark) have transposed only parts of the Copyright Directive. The delay in implementation is perhaps unsurprising given the controversial nature of certain of the Copyright Directive’s provisions, in particular Article 17.

Recent developments have started to add colour to how Article 17 may work in practice, and how it might align with the broader regulation of platform liability for infringing content. This blog post will discuss these developments and analyse the implications for platforms and rights holders.

Parties within a chain of transactions may face liability for dishonesty and assistance, even if they do not have actual knowledge of fraud.

By Stuart Alford QC and Yasmina Vaziri

The recent judgment in Bilta (UK) Limited (in liquidation) & ors v. NatWest Markets plc & Anor [2020] EWHC 546 (Ch) provides a timely illustration of how the concepts of dishonesty and assistance may apply in a chain of transactions in which not all parties have actual knowledge of the fraud. In the case, the defendant bank and its subsidiary were found to be vicariously liable for dishonest assistance to fiduciary breaches by the directors of the insolvent claimant companies, despite not having actual knowledge of the directors’ fraud. The directors were found liable on account of their participation in trades executed by two employee traders in a carbon credit based carousel fraud scheme.

The ruling serves as a helpful reminder that parties must enter into well-drafted contracts in proper legal form.

By Daniel Smith

In Philip Barton v. Timothy Gwyn-Jones & Others [2019] EWCA Civ 1999, the Court of Appeal recently allowed a claim for a success fee payable to an agent for finding a buyer for a property, even though the contract only specified a success fee if the agent achieved an agreed higher price.

The Court of Appeal identified a liability in unjust enrichment based on quantum meruit for the value of the agent’s services, bypassing the need to identify (or imply) a contractual term, and instead basing the liability on the commercial factual background.

The case demonstrates that, without an agreed allocation of risk of a particular event, the courts may be willing to fill in the gaps. Contracting parties should ensure their drafting caters for all eventualities (always consider: what if something else happens?), and parties in dispute should consider whether this decision allows them to go outside the contract to claim a remedy when the contract doesn’t answer the “what if …?” question.