Artificial intelligence (AI), robotics and automation are possibly the most fascinating topics for those dealing with technology (and sourcing) matters. They raise a lot of interesting questions and scenarios. Even the few official legal documents about these subjects refer to Mary Shelley’s Frankenstein, Pygmalion, Prague’s Golem – and the more obvious Asimov’s Three Laws of Robotics (see the EU Parliament Draft Report with recommendations to the Commission on Civil Law Rules on Robotics).

But this is not only about philosophy and futuristic settings. There is already no doubt that robots, androids and all other forms of artificial intelligence are already playing a fundamental role in the new Internet of Things (IoT) “smart” industrial revolution, which will affect most if not all industrial sectors and countries. In turn, the adoption of these technologies will be reflected in commercial relationships, and changing existing approaches to contracting and insurance.

There will undoubtedly be benefits in terms of efficiency, reliability and savings. The market is well aware of such advantages: as reported by the EU Parliament, from 2010 to 2014 the increase in sales of robots was at 17% per year, and in 2014 sales rose by 29%, with further increases expected. Other indicators show a similar increase, as patents relating to robotics tripled over the past decade. Thus far, this is mainly led by the automotive, electronics and health industries, but other sectors will benefit, from transport to education, from agriculture to environmental protection.

There are also some obvious threats:

  • fears that there will be a rise in unemployment with smart robots taking jobs currently done by humans, although there are mixed views on this;
  • physical safety concerns – yes, smart robots can be a danger as we have seen in many science fiction movies, but they can also perform some dangerous tasks that would otherwise put humans at risk;
  • fears of a reduction of (personal) data protection as monitoring becomes an everyday part of “smart services”; and
  • concerns about the so-called “soft impact on human dignity” when robots are used to replace human care and companionship or to enhance humans.

All the above require regulation and solid legal principles. At a European level, there is no single framework regulation, although certain issues have already been addressed, for instance through the recent data protection regulations or the rules on drones or on technology dual use.

As is the case for many other innovations, at least from a European perspective, the industry can benefit from a coordinated approach, with harmonized standards – where possible such standards should ideally be agreed on both sides of the Atlantic. For instance, the automotive sector will benefit from common standards for the cross-border development of automated vehicles, and addressing the current dual systems on applicable law for traffic accidents.

The EU Parliament Draft Report to the Commission on Civil Law Rules on Robotics is a good embryonic attempt at setting up a common approach, promoting a common classification of smart robots, with registration and real-life testing recommendations which could help address certain security concerns.

The recommendation also confirms the wider trends in various jurisdictions to apply the “strict civil liability rules” for smart robots, with the requirement for damages or compensation payments being triggered where the claimant can establish proof that the damage has occurred and the causal link with the harmful behavior, with possible restrictions in the case of damages to property.

The Draft Report calls for the setting up of a compensation fund, and for the potential for robots to have the capacity to hold financial assets in their own right, which could then be used to pay compensation to persons harmed by that robot. This could lead to creating a legal status for robots, with a new “electronic personality” to be recognized when robots interact autonomously with third parties.

The Draft Report includes also a “Charter on Robotics” to foster responsible innovation, including certain basic harm exclusion principles set out by Isaac Asimov’s in his futuristic books. So, AI, robots and automation are already a reality, and with a homogenous and technology-neutral regulatory approach we can prevent an Asimovian dream from becoming an Orwellian nightmare.

We will follow up next week with posts on AI and smart robots’ main contractual and legal issues!