Smart Product Liability: Issues And Challenges

• Published date: 19 October 2023
• Subject Matter: Consumer Protection, Technology, Product Liability & Safety, Dodd-Frank, Consumer Protection Act, New Technology
• Law Firm: Lavery
• Author: Ms Léonie Gagné and Laurence Isabelle
• topic: Product Liability Law

Introduction

In 2023, where do we stand in terms of liability where smart products are concerned?

The rules governing product liability set out in the Civil Code of Québec were introduced early in the 20^th century in response to the industrial revolution and the growing number of workplace accidents attributable to tool failures.¹ Needless to say, the legislator at the time could not have anticipated that, a century later, the tools to which this legislation applied would be equipped with self-learning capabilities enabling them to perform specific tasks autonomously.

These "smart products," whether they are intangible or integrated into tangible products, are subject to the requirements of general law, at least for the time being.

For the purposes of our analysis, the term "smart products" refers to products that have:

• Self-learning capabilities, meaning that they can perform specific tasks without being under a human being's immediate control.
• Interconnectivity capabilities, meaning that they can collect and analyze data from their surroundings.
• Autonomy capabilities, meaning that they can adapt their behaviour to perform an assigned task more efficiently (optional criterion).²

These capabilities are specific to what is commonly referred to as artificial intelligence (hereinafter referred to as "AI").

Applying general law rules of liability to smart products

Although Canada prides itself on being a "world leader in the field of artificial intelligence,"³ it has yet to enact its first AI law.

The regulation of smart products in Quebec is still in its infancy. To this day, apart from the regulatory framework that applies to autonomous vehicles, there is no legislation in force that provides for distinct civil liability rules governing disputes relating to the marketing and use of smart products.

There are two factors that have a major impact on the liability that applies to smart products, namely transparency and apportionment of liability, and both should be considered in developing a regulatory framework for AI.⁴

But where does human accountability come in?

Lack of transparency in AI and product liability

When an autonomous product performs a task, it is not always possible for either the consumer or the manufacturer to know how the algorithm processed the information behind that task. This is what researchers refer to as "lack of transparency" or the "black box" problem associated with AI.⁵

The legislative framework governing product liability is set...