ARTIFICIAL INTELLIGENCELIABILITY IN AN IOT WORLD

PHIL KUSIAKSenior Associate

3 May 2019

HFW IS A SECTOR FOCUSED GLOBAL LAW FIRM• Aerospace, commodities,

construction, energy, insurance and shipping

• 600 lawyers, including 170 partners, based in 19 offices across the Americas, Europe, the Middle East, Asia and Australia.

“Clients highlight the firm’s “excellent customer service,” noting the team to be very “knowledgeable and commercial. They’re a very good, client focused firm.”Chambers UK 2019 insurance: contentious claims & reinsurance

THE FIRM

2

ARTIFICIAL INTELLIGENCE / INTERNET OF THINGSTHE BASICS

3

“... learning or any other feature of intelligence can in principle be so precisely described that a machine can be made to simulate it.” – Dartmouth AI Project Proposal; John McCarthy et al.; Aug. 31, 1955.

“The theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages” - English Oxford Living Dictionary

“A branch of computer science dealing with the simulation of intelligent behaviour in computers.

The capability of a machine to imitate intelligent human behaviour.” - Merriam-Webster

WHAT IS IT?ARTIFICIAL INTELLIGENCE

4

WEAK / NARROW AI

• Focused on performing one narrow task• Simulates knowledge and cognitive

ability of a human within a particular realm

• Examples: chess / poker programs, spam filters, self-driving cars, manufacturing robots, Apple’s Siri, Google Home

CATEGORIESARTIFICIAL INTELLIGENCE

STRONG AI

• Concept which involves a system with comprehensive knowledge and cognitive capabilities that mimic the human brain

• Abilities such as self-awareness, consciousness, problem-solving, creativity and reasoning

• Essentially no difference between software and human being

5

Type 1: Reactive machines

• IBM’s Deep blue chess program

Type 2: Limited memory

• Some decision-making functions in self-driving cars

Type 3: Theory of mind

• Machines that could interact socially (does not yet exist)…………………………...

Type 4: Self-awareness

• Machines understand their current state and can use the information to infer what others are feeling (does not yet exist)

TYPES OF AIARTIFICIAL INTELLIGENCE

6

“The IoT is a giant network of connected "things" (which also includes people). The relationship will be between people-people, people-things, and things-things” - Forbes

WHAT IS IT?INTERNET OF THINGS (IoT)

7

LIABILITY & CONTRIBUTION

THE BASICS

8

HOW DOES LIABILITY ARISE?

• TORT (NEGLIGENCE)

• CONTRACT

• STATUTE

LIABILITY

NEGLIGENCESNAIL IN A BOTTLE CASE

“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question”

Donoghue v Stevenson [1932] AC 562 per Lord Atkin at 580

LIABILITY

ELEMENTS OF NEGLIGENCE

• Is there a duty of care?

• Has there been a breach of duty?

• Has the breach caused the loss?

• Is the loss recoverable?

LIABILITY

11

CONTRIBUTORY NEGLIGENCE

“Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons…”

Law Reform (Contributory Negligence) Act 1945

CONTRIBUTION

CONTRIBUTION / INDEMNITY

Where a co-defendant and/or third party is also liable to the claimant for the same loss.

Civil Liability (Contribution) Act 1978

12

WHEN AI / IOT GOES WRONGS

HOW LIABILITY / CONTRIBUTION MIGHT APPLY

13

1. NO AI / IOT

• Car A fails to stop at red light• Crashes into Car B

• Liability could fall to:– Owner / Driver– Car manufacturer

HOW LIABILITY / CONTRIBUTION MIGHT APPLY

14

2. PARTIAL AI / IOT

• Autonomous Car A fails to stop at red light• Crashes into Car B

• Liability could fall to:– Owner / Driver – Car manufacturer– AI designer– Sensor / mapping software provider– Network provider– Third party cyber attacker

HOW LIABILITY / CONTRIBUTION MIGHT APPLY

15

3. FULL AI / IOT

• Autonomous Car A drives through intersection with AI traffic lights

• Crashes into Autonomous Car B

• Liability could fall to:– Owner(s)– Car manufacturer(s)– AI designer(s)– Sensor / mapping software provider(s)– Network provider(s)– Third party cyber attacker– Traffic light provider

HOW LIABILITY / CONTRIBUTION MIGHT APPLY

16

ADJUSTING AI / IOT CLAIMS

17

TIPS

• Understanding AI / IoT software

• Collecting and interrogating data

• Investigating cause (whether one or more devices were at fault)

• Collecting all contractual documents, manuals / user guides for AI / IoTmanufacturers and providers

ADJUSTING AI / IOT CLAIMS

18