Current Liability Research Articles

The Revised Product Liability Directive: A Law and Economics Analysis

Abstract On 12 March 2024, the European Parliament adopted the text for revising the current Product Liability Directive (revised PLD), which was implemented in 1985. The revised PLD adapted the rules for the damage caused by defective products for the challenges from digitalisation, the circular economy and international supply chains. In particular, the new rules aim to ensure that new technologies, such as AI, could be well reflected, so that residents in the European Union could be effectively protected. Conventionally, a law and economics analysis has played a crucial role in shaping product liability. The objective of this paper is to discuss the major changes in the revised PLD via the lens of insights of law and economics. In specific, we focus on the influence of these changes on multiple key elements, including deterrence effect, risk-shifting and local preferences.

자율주행자동차 상용화에 대비한 자동차보험제도 연구

On May 7, 2016, in the state of Florida, USA, a fatal accident occurred involving an autonomous vehicle and a large truck, leading to the death of the driver. This incident heightened interest in autonomous vehicles and sparked discussions on their implications, including the challenges and liability issues in the event of accidents during autonomous operation. The application of existing legal frameworks, such as Article 750 of the Civil Code on tort liability and Article 3 of the Automobile Damage Compensation Guarantee Act on operator liability, to accidents involving autonomous vehicles raises questions about identifying responsible parties and compensating victims. This study examines the applicability of these legal principles to accidents occurring during autonomous driving and proposes the introduction of a No-Fault insurance system as a novel automotive insurance mechanism to address these issues. The analysis revealed that the No-Fault insurance system, a solution to the problems posed by the current fault-based liability system and already implemented in several advanced countries since the early 2000s, was considered but ultimately not adopted in South Korea due to challenges in amending existing legislation, limitations in calculating insurance rates, and concerns over moral hazard, among other issues. However, as autonomous vehicles are poised to integrate into our lives more rapidly than anticipated, and the social concerns regarding traffic accidents during autonomous operation deepen, it is imperative to form a task force comprising the Ministry of Land, Infrastructure, and Transport, the Financial Supervisory Service, the General Insurance Association, among others, before it's too late. This task force should engage in research and discussions, while building a consensus among the public, to prepare for the new automotive market driven by the autonomous vehicle industry.

An Empirical Study on the Relationship between Capital Structure and Firm Performance: A Case Study of Listed Manufacturing Enterprises in Hebei Province

The financial data of Hebei Province's listed manufacturing enterprises from 2013 to 2022 is used in this paper to build a multiple linear regression model, and two-way fixed effect regression is used to examine the relationship between capital structure and corporate performance of these enterprises. The findings indicate that the retained earnings ratio and the gearing ratio of Hebei Province's listed manufacturing enterprises have a significant positive correlation with corporate performance, while the current liability ratio and the current liability ratio have a positive correlation. Based on this, this paper proposes two methods to maintain a reasonable asset-liability ratio and current liability ratio, optimize the capital structure of listed manufacturing enterprises in Hebei Province, and raise the enterprise's own capital as well as the ratio of retained earnings in profit distribution.

보상제도의 선호도 분석을 통한 현행 보험제도의 한계점과 개선방안

This study aims to investigate the relationship and preference regarding satisfaction with the compensation process under the current liability insurance system among 500 car drivers who have experienced automobile accidents in the last five years. It also seeks to identify the limitations of South Korea's current insurance system based on a survey of perceptions towards the system and to propose improvements. Firstly, the attribute of safe driving had a significant negative (-) impact on cost satisfaction within insurance processing satisfaction. Insurance attributes had a significant positive (+) impact on satisfaction with adjudication fairness, cost satisfaction, and procedural satisfaction. However, accident attributes had no significant impact on satisfaction with adjudication fairness, cost satisfaction, or procedural satisfaction. Secondly, the biggest complaint in determining compensation was 'fault determination' (36%), with 'filing complaints against insurance companies' (15.8%) being the most cited method for handling dissatisfaction with traffic accidents, and 'mutual fault processing' (37%) as the main issue with fault determination. Among respondents, 13.6% had experience with litigation due to traffic accidents, 70.8% pointed out equity issues between offenders and victims in handling traffic accidents, and 78.8% indicated problems with fault determination. Therefore, it is expected that the implementation of a no-fault insurance system, which would alleviate the burden of proof of fault from all citizens and allow for rapid compensation without the need for litigation, would increase compensation satisfaction among insurance consumers in the event of traffic accidents. This would also reduce disputes between victims and offenders, thereby enhancing the stability of the insurance system through swift compensation. Additionally, it is anticipated that unnecessary complaints due to fault disputes and the unnecessary costs incurred by victims in hiring loss adjusters or lawyers would decrease.

Review of Asset Management Practice in Indonesian State-Owned Enterprise

This study examines Indonesian State-Owned Enterprises (SOEs) asset management methods, problems, and financial and operational performance effects. The report synthesizes case studies and academic research on how large organizations manage their huge and diverse asset portfolios and how governance, regulatory frameworks, and human resource practices affect their effectiveness. The research begins with case studies of talent management innovations from big Indonesian SOEs. These cases show how proactive human resource approaches can boost company commitment and reduce turnover, improving asset management efficiency. According to the research, governance and legal frameworks influence asset management techniques. Studies show that corporate governance quality affects SOE operational performance. The paper explores how reforms and legislation affect state asset management, highlighting the major changes in SOE governance and legal frameworks, particularly after economic and political reforms. Asset management difficulties for Indonesian SOEs include managing large and diverse asset portfolios, integrating modern management frameworks, and optimizing state asset revenue. According to the study, comprehensive asset management systems, governance transparency, and professional management can address these difficulties. The research examines how asset management strategies affect Indonesian SOE profitability, corporate governance, and performance measures. Strategic asset management boosts financial performance, especially profitability. SOE profitability is greatly affected by current asset and liability management. The study offers advice to Indonesian SOEs and policymakers. Enhancing financial and operational performance requires comprehensive asset management, governance changes, and strategic innovation. These efforts boost Indonesia's economy, demonstrating the importance of asset management in SOE performance.

Analisis Arus Kas Operasi sebagai Alat Ukur Kinerja Keuangan

This research aims to determine the current ratio obtained by PT Siloam International Hospitals Tbk in 2019 - 2021, as well as to analyze the company's financial performance using the Operating Cash Flow Ratio, Cash Coverage to Interest Ratio, Total Debt Ratio, Cash Coverage to Current Liability Ratio, Expenditure Ratio Capital, Funds Flow Coverage Ratio, Free Net Cash Flow Ratio, and Cash Flow Adequacy Ratio. The method used in this research is a qualitative research method. From the research results, it can be concluded that the financial performance of PT Siloam International HospitalsTbk in 2019-2021, assessed from the operating cash flow ratio, was stated to be poor. The financial performance is considered average based on the calculation of the eight operating cash flow ratios. It had five ratios that did not meet standard 1, and only three ratios met standard 1. It showed that the company's ability to manage operating cash flow is still less than optimal. However, the financial performance of PT Siloam International Hospitals Tbk in 2019-2021 tended to increase from year to year, this can be seen from the eight operating cash flow ratios, seven ratios had increased so that the financial performance of PT Siloam International Hospitals Tbk was getting better from year to year.

Responsabilidade por produtos defeituosos na era da IA — Proposta de uma solução de “duas vias”

In 1985 the Council of the European Communities adopted the Directive 85/374/EEC to harmonise product liability within Europe. In 2024, this directive will most likely be replaced by a new Product Liability Directive designed to reflect the technical developments of the last 40 years. The new Directive contains some significant changes. However, regarding the overarching concept of product liability, it remains faithful to the old Directive: Manufacturers are still not liable for all damage caused by their products, but only for damage caused by a “defect” in a product. This defect-based approach is problematic. When it comes to new digital technologies, especially Artificial Intelligence, it is difficult for courts to assess a product’s defectiveness. Moreover, in many cases, the defect-based approach is insufficient to provide liability solutions that are both efficient and fair. This paper seeks to lay the foundations for a more comprehensive reform: The current product liability for defective products should be complemented by a second “track” of product liability. In the case of particularly dangerous products, such as autonomous cars and medical devices, manufacturers should compensate victims regardless of whether their products are defective or not. Such “truly” strict liability could partially relieve courts of the burden of assessing a product’s defectiveness and would lead to fair and efficient prevention and distribution of damages. Damage costs would be allocated to manufacturers as the cheapest cost avoiders. In addition, the advantages and disadvantages of dangerous products would be more evenly distributed among manufacturers, users, consumers and “innocent bystanders”. However, to avoid over-deterrence and stifling of innovations strict liability should be limited to particularly dangerous products. Legislators should introduce a general clause of truly strict liability, which would allow courts to assess whether a product is particularly dangerous or not. A general clause is preferable to a list of particularly dangerous products because it would provide for the flexibility needed to deal with rapidly developing technologies.

The European Commission's approach to extra-contractual liability and AI – An evaluation of the AI liability directive and the revised product liability directive

The European Commission published two proposals that aim to adapt (tort) liability rules to the digital age, the circular economy and the impact of the global value chain. The ‘AI Liability Directive’ contains rules on the disclosure of information and the alleviation of the burden of proof in relation to damage caused by AI systems. The ‘revised Product Liability Directive’ substantially modifies the current product liability regime by broadening the scope, integrating new circumstances to assess the product's defectiveness and introducing provisions regarding presumptions of defectiveness and causation. In this article, we evaluate how both proposals provide some answers to major technological developments – in particular AI – in view of the issues they raise as identified in the legal literature. To do so, we also provide a clear understanding of the major provisions in both proposals, supported by visuals. Although we welcome both proposals for several reasons outlined in the article, different unclarities and inconsistencies need to be resolved. These inter alia relate to the unclarity of terms, the position of claimants, the uncertain interaction with other supranational initiatives and the many interpretation issues with regard to the fault-based liability regime. A more fundamental objection relates to the choice of the revised Product Liability Directive to capture all liability issues with AI systems, which comes at the cost of losing the connection to ‘product’ as a grounding concept. Our findings can be used by policymakers in further adapting and refining both proposals to the digital reality.

Company Fair Valuation Considering Esg Factor (Case Study: Pt Pertamina Geothermal Energy, Tbk)

The increments of environmental, social, and governance-based investments have been seen recently by institutions or retail investors. The growth has increased rapidly since 2012. Some research gives a positive correlation between the ESG factor represented by ESG rating and company performance. PT Pertamina Geothermal Energy, Tbk. (PGEO), IPO on 24th February 2023 has outstanding ESG performance. It was audited by Sustainable Fitch and got the highest second rank, 77 out of 100 points. Not only is it exceptional ESG performance, but it also has excellent business performance. PGEO started its journey of geothermal utilization in 1974, upon discovering 70 geothermal areas in Indonesia as a sub-business of PT Pertamina EP. PGEO was established in 2006 to continue the efforts to produce clean and environmentally friendly energy, and as of now, it has contributed 82% of the installed geothermal energy capacity in Indonesia. It has the world’s most extensive geothermal installed capacity by December 2021 and promises to expand even more significantly in its prospectus. Investors should consider their value rather than positive sentiment as an investment decision. Then, this study determines whether the PGEO price is undervalued or overvalued considering their project expansion and ESG factor. This study utilizes secondary data from prospectuses, financial statements, annual reports, sustainability reports, company-published documents, and data from IDX.co.id and stockbit.com. The data was gathered and processed to understand the need to expand, analyze its financial performance, and value the company. The author considers company ESG performance to develop financial projections. To fulfill company promises in expansion and stay sustained by adding more production, injection, and startup wells, it needs 1.588.612.527 USD using ESG-based financing. The historical financial performance of PGEO is quite good, but the investor should be careful about its liquidity since the current liability is more significant than its current asset. Based on the calculation of absolute valuation using discounted cash flow, the value of each share of PGEO is Rp12.686,00, which is undervalued, and its IPO price is Rp875,00. Based on relative valuation using PER to its peers and average industry, PGEO’s price is overvalued. The PGEO price that pars with the industry average is Rp490,00. The author can determine the fundamental value of PGEO.

Financial Distress Classification Using Feedforward Neural Network Based on Altman and Ohlson Financial Ratios

The ever-changing economy requires companies to anticipate future conditions in order to avoid financial distress, a continuous decline in financial conditions. The research focused on comparing Altman and Ohlson’s financial ratio in classifying financial distress on Property and Real Estate companies using the Feedforward Neural Network. The data used is the financial report data of 19 Property and Real Estate companies listed on the Indonesian Stock Exchange in 2016-2022, with the initial status of financial conditions based on earnings per share. (EPS). The study also used the Synthetic Minority Oversampling Technique (SMOTE) method to address class imbalances. The best financial ratio is selected based on accuracy values and Area Under Curve (AUC). Altman’s financial ratio with the FFNN model architecture (5-2-1) with a balance of 60:40 yields an accuracy of 84.62% and an AUC of 0.8325. The Ohlson Financial ratio with the 60:40 data balancing process and the FFNN model architecture (9-4-1) yields an accuracy of 93.27% and an AUC of 0.9045. Thus, in predicting financial distress in companies in the Property and Real Estate sector, Ohlson’s financial ratio with the predictor variables Corporate Size (SIZE), Total Liabilities to Total Assets (TLTA), Working Capital to Total Acts (WCTA), Current Liability to Current Asset (CLCA), OENEG, Net Income to total assets (NITA), Cash Flows Operating to Total Responsibilities (CFOTL), Net Revenue (INTWO), and Net Incoming Change (CHIN) yielded the best results. This best ratio can be used as a consideration in using alternative financial ratio to classify financial distress.

Liquidity and Profitability of Retail Companies: Evidence from Indonesia

This study aims to examine effect of liquidity on profitability of publicly listed retail companies on the Indonesian Stock Exchange (IDX). This study uses firm size and Working Capital Management (WCM) efficiency as control variables. The sample in this study consisted of 15 publicly listed retail companies in the period of 2014-2019. All variables are measured by a ratio scale. Profitability is proxied by return on assets. Data was analyzed with panel data regression using a fixed effect model. This study shows that liquidity has a positive and significant effect on profitability when measured using the current ratio. In addition, company size has a significant positive effect on profitability. A higher composition of current assets to current liability improves profitability. On the other hand, Cash Conversion Cycle (CCC) as a proxy of WCM efficiency has a significant negative correlation with profitability. This research findings contribute to understanding of the impact of liquidity, firm size and CCC on profitability in retail industry.

A RESPONSABILIDADE CIVIL DOS PROVEDORES DE APLICAÇÕES POR CONTEÚDO DE TERCEIROS NO MARCO CIVIL DA INTERNET: ERROS, ACERTOS E NOVAS PERSPECTIVAS

The rise of the internet and social networks enabled the formation of a new public space, conducive to the broad exchange of ideas and the consolidation of a plural and democratic society. On the other hand, there is a growing concern about the dissemination of illegal or morally undesirable content, mainly due to the high speed and wide range in which the flow of information operates on networks. This article aims to study the current civil liability system of internet providers for illicit content created and disseminated by third parties through their platforms. The methodology adopted consists of a critical examination of doctrine, legislation and jurisprudence related to the matter. The advent of the Marco Civil da Internet presents flaws and advances in the regulation of the matter, reflecting the challenges in reconciling freedom of expression with an effective regime of protection and reparation to victims.

Driverless cars and the determination of the manufacturer’s liability for injuries: is India ready?

ABSTRACT India’s endeavour of becoming a leader in shared mobility indicates that it could soon follow suit in becoming one of the leading driverless car markets across the globe. The paper critically analyses the state of India’s current liability laws on automobile-related injuries in a comparative context. It examines whether their extension to technology-based automobiles such as driverless cars may be feasible – particularly considering that accidents involving their operation are likely to be attributable to malfunctions in the software or hardware of these vehicles. Accordingly, it highlights some challenges that existing laws may pose in deterring manufacturers from expanding their markets in India. The paper refers to the approaches of some major economies such as Germany, China, South Korea and the UK and proposes workable solutions that Indian legislators may employ to resolve the predicaments that the extension of existing legal principles to disputes arising from accidents involving driverless cars may cause.

IOT financial management system for energy enterprise management risk and prevention and control strategy under the background of double carbon

Despite the absolute number of developments and products of enterprise management systems and platforms, there are still limited ways to achieve risk assessment of enterprise financial management by energy enterprise stakeholders. To reduce the financial management pressure of energy enterprises as well as to reduce enterprise financial risks, this paper establishes an Internet of Things(IOT) financial management system. The system was also comprehensively evaluated based on the financial risk management status of each company for the period 2016-2020. The results show that a significant increase in the share of non-current liabilities was observed after the introduction of the IOT-based financial management system in 2018. Relative to the 2017 data, the current liability ratio decreased by 2.96%, 7.98%, and 14.59% for 2018, 2019, and 2020, respectively. The ratio of corporate investments to revenue decreased by 8.74%, 22.91% and 16.83%, respectively. Investments as a percentage of earnings decreased by 6.22%, 5.48%, and 6.82%, respectively. The ratio of undistributed earnings decreased by 9.69%, 18.82% and 35.39%, respectively. Finally, the introduction of the IOT's financial management system reduced financial management costs by a factor of 2.822, 4.358 and 5.501, respectively. And the cost of managing people in an integrated manner was reduced by 2.964, 3.012 and 4.004 times respectively.

Report on the 13th Liability Seminar of the European Air Law Association (EALA), at Steigenberger Airport Hotel, Berlin, Germany on 2–3 February 2023

This paper provides an overview of the 13th Liability Seminar organized by the European Air Law Association (EALA), which took place in Berlin in February 2023. After a three-year hiatus due to the pandemic, the seminar brought together experts from various jurisdictions to discuss liability developments, claims handling, and insurance in the aviation industry. The seminar featured nine panels covering a wide range of topics, including passenger rights, liability exposure of aircraft lessors, operational issues caused by the pandemic, procedural developments, and innovation in litigation finance. Notable presentations included discussions on liability exposure and litigation in relation to leased aircraft stranded in Russia, the impact of the pandemic on liability issues, and the role of technology in online litigation proceedings and innovative solutions for claims handling. The 13th Liability Seminar provided a platform for industry experts to exchange knowledge and insights, addressing current liability challenges in the aviation sector and fostering the ongoing development of air law. EALA, Air Law, Liability, Regulation 261, Insurance, Aircraft Leasing, Ukraine

The impact of IFRS adoption on Saudi Arabia

PurposeThis study aims to examine the implementation of International Financial Reporting Standards (IFRS) in Saudi Arabia. It investigates how the adoption of IFRS has affected four critical areas in the financial statements of publicly listed companies: profit and loss statement, balance sheet, cash flow statement and retained equity statement in Saudi Arabia. The paper also explores the essential factors/drivers that influence the adoption of IFRS and its implication in Saudi Arabia.Design/methodology/approachData was obtained from Saudi Stock Exchange (Tadawul) listed companies from eleven industries in Saudi Arabia. This cross-sectional study analyses critical financial data across eleven distinctive industries. To identify the impact of adopting IFRS, the researchers use a paired t-test to evaluate seven key elements of financial statements underlying the critical areas: non-current asset, current asset, total assets, shareholders equity, non-current liability, current liability and total liability. The sample captures cross-sectional data from well-developed global industries in Saudi Arabia, pre- and post-implementation of IFRS. Thus, the analysis of the sample data gives a representative picture of the population of the Saudi Arabian industry.FindingsThe results reveal significant differences between GAAP and IFRS reporting standards in the measurement, recognition and classification of non-current assets and liabilities. The differences are expressed in the variance between the GAAP and IFRS. Specifically, the differences between GAAP and IFRS demonstrated by the t-value are significant and reliable (respectively, 5.3 and 4.1). Additionally, the t-value is validated by the p-value, which in both was significant.Research limitations/implicationsThe outcomes of this research will benefit accounting information users, practitioners, researchers and regulators. Since Saudi Arabia’s policymakers have mandated the full adoption of IFRS in financial reporting, the study contributes to the adoption of IFRS practices throughout the Saudi industry. Adopting full IFRS standards requires widespread IFRS expertise to cope with the transition.Originality/valueThis study advances research into the perennial issues associated with changes in reporting towards IFRS standards, especially in Saudi Arabia. The contribution to theory and practice enters new and fruitful areas.

COVID-19 Risk Management: a Survey among Italian physicians.

The COVID-19 pandemic had a significant global impact on public health. The increasing demand for intensive care and the closure of several health facilities has led to a reduction in the assistance of non-COVID patients. In our study, we investigated what changes health professionals have experienced in their professional activities and how they coped with them. A questionnaire was sent to 146 doctors, focused on three subjects: type of activity carried out during the pandemic; use of personal protective equipment (PPE) and recourse to vaccination; current medical liability profiles related to COVID-19. The questionnaire was completed by 111 doctors. The study showed no significant differences in the questionnaire response as regards the demographic and work variables of the participants (gender, age, area of specialties). Most of doctors assisted potentially positive patients, which also imposed derogations on their safety. Most of the complaints were about the low adequacy of PPE provision and about the compromission of specialist medical care. The interest in safety among participants was revealed by the high compliance to vaccination, with almost complete coverage. The questionnaires showed that most doctors (72,7%) believe that specialist medical care has been impaired during the COVID-19 pandemic. Secondly, a high percentage of participants (79.8%) expressed the need for both civil and criminal limitation of liability in connection with work in the management of SARS-Cov-2 patients. In conclusion, this survey tried to contribute to the identification of the main problems presented by healthcare professionals. Their versatility was a crucial element for the management of the pandemic, but also highlighted the need for health institutions to prepare pandemic plans in the future, with adequate and constant updating. Concerns were raised regarding financial deficits and legal protection. Political decisions must be entrusted to enhance medical assistance and to avoid the increasing phenomenon of defensive medicine.

Physical and mental health status of former smokers and non-smokers patients with bipolar disorder.

Up to 70% individuals with bipolar disorder (BD) are lifetime tobacco smokers, a major modifiable risk factor for morbidity. However, quitting smoking is rarely proposed to individuals with BD, mainly because of fear of unfavorable metabolic or psychiatric changes. Evaluating the physical and mental impact of tobacco cessation is primordial. The aim of this study was to characterize the psychiatric and nonpsychiatric correlates of tobacco smoking status (never- vs. current vs. former smokers) in individuals with BD. 3860 individuals with ascertained BD recruited in the network of Fondamental expert centers for BD between 2009 and 2020 were categorized into current, former, and never tobacco smokers. We compared the sociodemographic and clinical characteristics assessed by standard instruments (e.g., BD type, current symptoms load, and non-psychiatric morbidity-including anthropometric and biological data) of the three groups using multinomial regression logistic models. Corrections for multiple testing were applied. Current smokers had higher depression, anxiety, and impulsivity levels than former and never-smokers, and also higher risk of comorbid substance use disorders with a gradient from never to former to current smokers-suggesting shared liability. Current smokers were at higher risk to have a metabolic syndrome than never-smokers, although this was only evidenced in cases, who were not using antipsychotics. Tobacco smoking was associated with high morbidity level. Strikingly, as in the general population, quitting smoking seemed associated with their return to the never-smokers' levels. Our findings strongly highlight the need to spread strategies to treat tobacco addiction in the BD population.

Liability Rules for the Digital Age

Abstract With legislative proposals for two directives published in September 2022, the European Commission aims to adapt the existing liability system to the challenges posed by digitalisation. One of the proposals is related and limited to liability for artificial intelligent (AI) systems, but the other contains nothing less than a full revision of the 1985 Product Liability Directive, which lies at the heart of European tort law. Whereas the current Product Liability Directive largely followed the model of US law, the revised version breaks new ground. It does not limit itself to the expansion of the concept of product to include intangible digital goods, such as software and data as well as related services, important enough in itself, but also targets the new intermediaries of e-commerce as liable parties. As such, the proposal for a new product liability directive is a great leap forward and has the potential to grow into a worldwide benchmark in the field. In comparison, the proposal of a directive on AI liability is much harder to assess. It remains questionable whether a second directive is actually needed at this stage of the technological development.

PREDICTING FRAUDULENT FINANCIAL STATEMENT USING CASH FLOW SHENANIGANS

Detection of fraudulent financial stewardship in the cash flow section is an exciting thing and is rarely studied. This research empirically tests the discovery of fraudulent financial statements based on basic cash flow shenanigans. The sample of this study amounted to 470 data mining companies in Indonesia, Malaysia, China, and Japan. The analysis method used is a positive approach. The results show that all ratios used can predict fraudulent financial statements. Three ratios of cash flow shenanigans, namely change in receivable to cash flow operations, days payable outstanding, and change in inventory to cash flow operations, significantly affect the F-Score. Meanwhile, the six cash flow shenanigans ratios, namely cash flow operations to current liability, operating cash flow ratio, free cash flow, cash flow operations to total liability, days payable outstanding, and change in inventory to cash flow operations, have a significant effect on the M-Score.