Liability Rules Research Articles

Artificial Intelligence and contractual liability under Polish law. Selected issues

Background: Growing presence of artificial intelligence (AI) in the public sphere, and its ensuing ‘robot-human’ and ‘robot-environment’ interactions, can certainly affect the rules of contractual liability.
 Research purpose: The article analyses how AI and its commercialization can impact on Polish legal regulations governing contractual relations and the contractual liability. The purpose of this article is to present the issue of the AI impact on the conclusion and performance of contracts in Polish civil law, with particular emphasis on contractual liability arising in this context, as well as potential problems associated with it, not only for parties to a contract, but also for lawyers who have to face a puzzle of finding legal solutions to technological progress making real mechanisms that until recently have been treated in science-fiction categories.
 Methods: The analysis is based on the dogmatic and legal method.
 Conclusions: It is necessary to distinguish between situations where artificial intelligence is a subject of the contract, and cases where artificial intelligence is a party to the contract. In the former case, it seems that the current general provisions on contractual liability, as well as the provisions governing individual contracts, can be used to a considerable extent. However, contractual liability seems to be much more problematic when a robot is a party to the contract. This issue is inseparable from the developing of intelligent robots (artificial intelligence) and possibly the granting of legal personality to them

Модернізація кримінально-правової охорони інформаційного простору України

The article notes that when intensive work on the new Criminal Code of Ukraine continues, the question arises aboutthe conceptual model of criminal law protection of information space, which will be taken into account when streamliningthe rules of criminal liability for offenses. In this regard, the need to create a clear and consistent conceptual model ofcriminal law protection of the information space of the Ukrainian state is justified. It is emphasized that the peculiarityof the current approach to the protection of information relations is that the relevant rules are contained in fact in differentsections of the Special Part of the Criminal Code of Ukraine. This situation cannot be considered satisfactory. Thus, it istime to modernize the existing model of protection of these relations. Modernization of protection of information spaceby means of criminal law should be based on certain principles, such as: 1) combination in one section of the SpecialPart of the Criminal Code of acts that may harm the information space to person, society, state; 2) protection of theinformation space, but not of individual information relations; 3) ensuring normal and secure information interactionbetween individuals, society and the state in various combinations; 4) filling the content of information space protectionwith security measurement. Due to the modernization of information space protection, a joint «platform» will be createdto protect relevant public relations in the form of a single section of the Special Part of the Criminal Code of Ukraineentitled «Criminal offenses against information security of person, society, state» that in one way or another affect thesphere of information space.

Legal Argument of Liability of Air Carrier for Accidents of Air Terrorism

This paper reviews discusses the liability of the air carrier has a role in the security of the passengers in the shadow of the ramifying opinions about the legal basis and nature of such liability. This problem becomes worse in countries with no legislations on air transport. Therefore, liability for the accidents of air terrorism is established in accordance with the general rules of liability in a way that does not match with the nature of air transport and accidents connected with it. The question why is that is air carrier liable for the damages caused to the passengers because of the terrorist acts or not? The study appeals to the air carrier to be exempt from the liability for what might face the flight that he warns the passengers of the terrorist threats to which the flight might be exposed on condition that these threats are serious

Stosunek adwokackiej spółki partnerskiej do osób trzecich w zakresie odpowiedzialności partnerów za zobowiązania

A partner company is one of the types of partnerships. Its purpose is to exercise a free profession within it. In comparison with other partnerships, it is distinguished by specific rules of liability for the company’s obligations. Partners are not responsible for errors in the art of other partners. It is possible to extend this liability on the basis of a contract. An article to discuss this issue on the example of advocate partnership companies.

Институт ответственности за вред, причиненный дефектной продукцией, в законодательстве России: большой потенциал или клубок противоречий?

The article provides a comparative analysis of the Russian and foreign law on product liability issues. The author concludes that on a number of key points (the concept of «product», the liability of seller as well as manufacturer, the shortened list of grounds for exemption from liability) the Russian model of liability for defective product is much more pro-consumer than its analogues in foreign law. However, this leads to some difficulties in law enforcement. At the same time, the broad definition of defective products as any goods, works and services (including immovables, professional services, etc.) leads to conflicts with other grounds of liability, as well as to the excessive application of the product liability rules. The equal liability of the manufacturer and the seller to the consumer, provided by the Russian law, regardless of the seller’s influence on manufacturing process, seems unfair and not typical for the legislation of foreign countries. Finally, the limited list of circumstances in Art. 1098 of the Civil Code exempting the manufacturer or seller from liability, formulated without considering modern technologies of production and promotion of goods, autonomy of some goods or their universal purpose (suitability for personal and professional use), can also lead to an unfair distribution of risks between the manufacturer and the consumer. The above negative aspects point to the need to reform the institute in question, including the clarification of its scope.

The “License as Tax” Fallacy

Intellectual property licenses are commonly portrayed as a “tax” that limits access to technology assets, which in turn stunts innovation by intermediate users and inflates prices for end-users. Renewed skepticism toward IP licensing, and associated judicial and regulatory interventions that apply per se-like liability rules under patent and antitrust law to IP licensing, overlook the fact that IP licenses typically play a “positive-sum” enabling function, rather than a “zero-sum” exclusionary function, by mitigating expropriation risks that would otherwise frustrate transactions between the holders of complementary specialized IP and non-IP assets. As illustrated by paradigm examples of licensing and other IP-dependent arrangements in content and technology markets, these transactional structures facilitate value-creating exchanges of knowledge assets, promote the division of labor among innovation and production specialists, and lower entry costs for firms that have strong innovation capacities but weak production and distribution capacities. An analytical framework that overlooks the enabling function of IP licensing is prone to recommend “false positive” policy actions that undermine the formation of markets in IP assets and, more generally, induce organizational distortions and reduce competitive intensity by disadvantaging R&D-specialist entities that rely on licensing-based monetization mechanisms while favoring integrated firms that maintain end-to-end commercialization structures.

Stosowanie wzorca operatora publicznego do operatora niepublicznego a ochrona interesów konsumentów

The legal status of the public operator, which is the Polish Post, as well as non-public operators, and the ability to conduct business activities by them should be considered in the context of the principles of the economic freedom and equality entrepreneurs, as expressed in the Constitution. It would suggest that all of these subjects should be treated by the legislator in the same way. However, provisions of the law postal allow conclude that the legal status of the public operator and non-public operators is different, because additional obligations were imposed on the public operator, but it also uses a number of privileges that are not available to other operators. This concerns in particular the principlesm of accountability and redress in the event of non-performance or improper performance of a contract of postal service. Therefore, the question arises, how this affects the protection of consumers’ interests, which is one of the tasks facing the state bodies, as determined by maintaining the integrity and security of business trading, while protecting the weaker party in legal relations, which undoubtedly is the consumer. This issue is important for the investigation of consumer claims for damages for harm caused by the operator in carrying out a contract of postal service. In particular, it is important to determine whether the rules on liability provided for the public operator must apply to the non-public operator, and if so, whether directly or into other way. It is necessary to take into account here, that led legislator in recognition of the public postal operator and the common postal service. On the one hand, the Polish legislator was obliged to liberalize the postal market, on the other hand, the solutions accepted by him were supposed to provide the Polish Post leadership on the market of common services, which in practice leads to monopoly. Therefore, the legal position of the consumer determines from services of which will use operators. Liability rules of the public operator and non-public operator are different for the existing damage and manners of pursuing claims. These principles are autonomous, regulated with different provisions of the law which are standardizing these issues in the different and comprehensive way.

Misconduct risks, legal enforcement and venture capital networks

AbstractThis study investigates the differing role of enforcement on the formation of venture capital (VC) syndication networks. We conjecture that public enforcement, with strong investigative powers against any syndicate member, discourages the formation of denser syndication networks due to misconduct risk by a member. By contrast, private enforcement, with strong disclosure and liability standards, enables denser syndication networks, through clear liability rules, standardized securities contracts and cost‐sharing amongst syndicate members. Our VC data from 31 countries show a negative impact of public enforcement on VC networks and partially support the positive impact of private enforcement depending on cultural conditions.

Vicarious Liability Under a Strict Liability Rule

Abstract In this article, we extend the model of Newman, H., and D. Wright. 1990. “Strict Liability in a Principal-Agent Model.” International Review of Law and Economics 10: 219–231 and strengthens their result that the strict liability can attain social optimum in a principal-agent relation to the situation in which the court appreciates any contractual terms regarding apportionment of damages between an employer and an employee under vicarious liability rule. Our model also generalizes and extends vicarious liability to the negligence-based liability rule.

Smart products: Liability, investments in product safety, and the timing of market introduction

We analyze the role of product liability for the emergence and development of smart products such as autonomous vehicles (AVs). We develop, and calibrate to the U.S. car market, a dynamic model where a (monopolistic) innovator chooses safety stock investments, the timing of market introduction, and the product price. Inducing higher long-term product safety through a strict (partial) liability rule reduces short-term safety investments and slows down AV market penetration. By contrast, negligence-based liability fosters initial investments without hampering long-term product safety. However, too stringent liability might forestall investments in the development of AVs and their market introduction.

Liability for robots I: legal challenges

Abstract In robot torts, robots carry out activities that are partially controlled by a human operator. Several legal and economic scholars across the world have argued for the need to rethink legal remedies as we apply them to robot torts. Yet, to date, there exists no general formulation of liability in case of robot accidents, and the proposed solutions differ across jurisdictions. We proceed in our research with a set of two companion papers. In this paper, we present the novel problems posed by robot accidents, and assess the legal challenges and institutional prospects that policymakers face in the regulation of robot torts. In the companion paper, we build on the present analysis and use an economic model to propose a new liability regime which blends negligence-based rules and strict manufacturer liability rules to create optimal incentives for robot torts.

Civil Liability for Sex Abuse by Muslim Clergy in Spain

Abstract State courts of civil law and common law jurisdictions alike are used to applying the rules of direct and indirect tort liability to Christian churches in different ways and with different results. But recent court decisions have put the issue of the civil liability of religious groups for acts of sex abuse by clergy in a different context, that of Islam. A common denominator in the reasoning of courts worldwide is the relevance of religious authority – authority to appoint and supervise clergy or authority vested in clergy – as an important factor in the attribution of civil liability. But Islam is a religion whose organizational structure and ministers are simply too different from those of the various Christian churches, so that state courts run the risk of wrongly applying to Islamic communities and Muslim entities the same categories and legal principles they usually apply in other, more common, cases of sex abuse.

Development and Test of Social Director of Sports Psychological Contract Scale

In order to provide important realistic basis for standardizing, guiding and governing the guiding behavior of social sports instructors, the measuring tools of psychological expectation were compiled. According to the survey data of 285 social sports instructors and 365 social sports instructors, project analysis, exploratory factor analysis and confirmatory factor analysis were carried out, and reliability and validity tests were conducted. The results are as follows: (1) the social sports instructors psychological contract scale by the growth and development, belonging and identity and norms and guidelines of three dimensions, 36 projects, divided into organizational responsibility subscales (growth liability, ownership, standard responsibility) and personal responsibility subscales (development rule of liability, recognition and responsibility) two subscales. (2) The Cronbach's Alpha value of organizational responsibility scale was 0.927 and KMO was 0.904 (P<0.5); the Cronbach's Alpha value of personal responsibility scale was 0.932 and KMO was 0.921 (P<0.5). The subscales of organizational responsibility and personal responsibility χ2/ DF < 3, GFI > 0.8, CFI < 0.9, RMSEA < 0.8; the structure and data fit well and meet the requirements of psychological test. (3) It is consistent with the realistic, conditional exchange and development-oriented dimensions of the authoritative psychological contract research contents at home and abroad, and reflects the group characteristics of social sports instructors in the expressions and specific items. Individual responsibility is greater than organizational responsibility; Organizational norms and personal norms have the highest expectation of responsibility; the pursuit of growth and development is greater than belonging identification. The psychological contract scale for social sports instructors has a reasonable structure, good reliability and validity, and reflects the value pursuit of the group. It is an ideal evaluation tool for studying the psychological contract of social sports instructors.

Firm Liability When Third Parties and Consumers Incur Cumulative Harm

This paper analyzes liability rules when consumers and third parties/the environment incur harm. Expected harm is convex in the level of output and modeled as a power function. We show that the social ranking of liability rules previously established for the case in which only consumers suffer harm (Strict Liability dominates No Liability and Negligence) may be reversed if harm to third parties or the environment is sufficiently important.

Strict Products Liability 2.0: The Triumph of Judicial Reasoning Over Mainstream Tort Theory

Abstract Strict products liability has evolved in a manner that is widely misunderstood. The liability rule was first formulated to govern defective products that did not minimally perform one of their ordinary functions as expected by consumers—a malfunction that violates the implied warranty of quality. After adopting this rule, courts began applying it to products that did not malfunction and found that a test for defect based on consumer expectations often is indeterminate or can otherwise unduly limit liability in an important class of cases. To address these problems, most courts adopted the risk-utility test, a form of cost-benefit analysis that functions like the negligence standard of reasonable care. Relying on these cases, the Restatement (Third) of Torts: Products Liability embraced the risk-utility test, jettisoned the consumer expectations test, and characterized strict products liability as a misleading label that perpetuates confusion about liability being strict when it instead is based on negligence. In response, a clear majority of courts have rejected this negligence-based framework and affirmed the continued vitality of strict products liability. Puzzled by this unexpected development, mainstream scholars claim that courts are confused by the rhetoric of strict products liability. The prevailing scholarly opinion about this matter is confused; its fixation on negligence ignores the implied warranty rationale for strict products liability. Having been largely formulated as a rule of contract law, the implied warranty is under-theorized as a tort doctrine. Once adequately developed, the tort version of the implied warranty shows why courts have transformed the rule of strict products liability from the last century into a more comprehensive regime—“strict products liability 2.0”—that relies on consumer expectations to incorporate the risk-utility test into the framework of strict products liability. As compared to ordinary negligence liability, the implied warranty defines the safety problem in the normatively appropriate manner, thereby sharpening the inquiry about what’s at stake. In dismissing this important development, mainstream tort theory relies on legal categories that fundamentally differ from the ones courts have used to develop strict products liability with analogical reasoning. Scholars have either resorted to overly general theories of tort liability or have otherwise focused on narrow doctrinal questions. By not engaging in the mid-level categorical theorizing required by analogical reasoning, the mainstream position could not see how this characteristic form of judicial reasoning has created the substantively sound regime of strict products liability 2.0.

Optimal extended liability rule in a competitive financial market with heterogeneous borrower firms

This paper provides a perspective that unifies two controversial arguments about the extended liability rule in a competitive financial market, i.e., the negative arguments about the exaggeration of the judgment proof problem and the positive arguments about the entry deterrence of inefficient firms. This paper also gives the theoretical solution for the optimality of the extended liability rule. In this paper, heterogeneous firms are assumed for the cost parameter of the precautionary effort, and distortions are dependent on the heterogeneities. Then, even considering extended liability with any share to the financier, the extended liability rule never achieves a socially first-best situation. Alternatively, the conditions under which the second-best optimal extended share to the financier should suffice are provided. Furthermore, I discover that the information structure is one of the crucial factors in determining the socially second-best solution for the extended share.

“Crossing the Sea under Camouflage”: Class Action and Investor Research

For a long time, China’s capital market has failed to establish a mature mechanism to coordinate the contradiction between the company and the small and medium-sized shareholders. Because the illegal income of listed companies far exceeds the illegal cost, the interests of small and medium-sized shareholders are constantly infringed. The situation that small and medium-sized investors are difficult to form a group and safeguard their rights has not been solved. The promulgation of the new “Securities Law” in 2020 further improves the representative litigation system, establishes the litigation principle of “implied entry and express exit”, increases the punishment for illegal listed companies, and strengthens the protection for investors. What needs to be explored is whether the promulgation of the new “Securities Law” has really increased the illegal cost of listed companies, what ways listed companies will adopt to manage investor relations, and how investors will be affected. Taking 36357 lawsuits, 1639 securities violations and 2341 A-share listed companies involved in lawsuits from 2001 to 2020 as research samples, this paper uses the event study method and the DID model to investigate the influence of the “representative litigation system” on the trial of class action cases, market reaction and company investor relationship management. Then, this paper discusses the impact of company violations and class action lawsuits on long-term and short-term corporate performance, and analyzes the mechanism of the impact on corporate performance from the perspective of investor sentiment.It is found that after the implementation of the new “Securities Law”, the trial time of class action cases is shorter, the probability of losing the lawsuit is higher, and the actual compensation accounts for a larger proportion of the amount of the lawsuit; compared with individual lawsuits, the market reaction of class actions is worse on the day of litigation announcement; once involved in a class action lawsuit, in order to hedge the negative impact of litigation, the company is more inclined to “hide” information in investor research, and investors obtain significantly less information about the company’s characteristics. Further mechanism analysis shows that although the company’s concealment behavior can produce the effect of “stabilizing” investor sentiment, thus playing a “masking effect” on the negative impact of class action on the company’s long-term and short-term performance, the company involved in the lawsuit cannot really “crossing the sea under camouflage”. Compared with the companies that violate the rules but have not been sued by the collective, after the promulgation of the new “Securities Law”, the short-term performance and long-term value of the companies that violate the rules and have been sued collectively are worse than before. After controlling endogeneity and conducing sensitivity analysis, the above conclusions are still valid.Due to the inherent imperfection of law, tort litigation and contract litigation, which are two means of private enforcement, are costly and unpredictable, and are not enough to prevent securities fraud. The introduction of public enforcement into the new “Securities Law” can effectively reduce the operation cost of the capital market; at the same time, the new “Securities Law” strengthens the relevant liability rules of information disclosure and investor recovery, promotes private enforcement, and thus promotes the development of the capital market. Based on the quasi-natural experiment of strengthening public enforcement in the new “Securities Law”, this paper provides empirical evidence for the above theory. The conclusion of this paper enriches the research on the motives, behaviors and corresponding economic consequences of corporate illegality in the capital market. It provides a reference for small and medium-sized investors to protect their legitimate rights and interests through the law and for companies to manage investor relations. It also provides inspiration for the realization of the change and innovation of legal means of securities order and the promotion of high-quality economic development.

Car accidents in the age of robots

In this paper, we compare liability rules in a world where human-driven and fully-autonomous cars coexist. We develop a model where a manufacturer can invest to improve the safety of autonomous cars. Human drivers may decide to purchase a fully-autonomous car to save precaution costs to avoid road accidents and shift liability to the car manufacturer. As compared to the negligence rule, a strict liability regime on both human drivers and car manufacturers is proved to be a superior policy. In particular, strict liability leads to more efficient R&D investments to enhance the benefits of the technology and favors the adoption of fully-autonomous cars. We also recommend that users of fully-autonomous cars make a technology-dependent payment to a third-party if there is an accident to discipline their activity levels.

Compensation Funds as a Remedial Mechanism for Victims of Corporate Pollution in Kenya: A Feasibility Study

Abstract This article explores the potential of a public-run, risk-based compensation fund to provide compensation for victims of corporate pollution in Kenya. Existing remedial mechanisms are severely limited by the uncertainty of recovery attributable to doctrinal barriers in liability rules, the length of time and cost involved in settling claims and the impact of corruption as a hindrance to access to justice. Depending on their design, compensation funds could offer prompt compensation at lower personal costs to claimants. Considering that victims of corporate pollution in Kenya tend to be poor, prompt compensation can cushion their welfare by providing much-needed funds to cover medical expenses and support livelihoods. While claimants would likely obtain less compensation in absolute amounts than in tort litigation, they would still retain the right to pursue supplemental compensation through alternative mechanisms. Thus, a pragmatic approach would be to develop a compensation fund while introducing effective reforms to existing mechanisms.

State Immunity in Relation to Damage Caused by Legislation

Whenever we mention damage caused by legislation, the question arises if it is possible to talk about the liability of what defines the rules of liability. Is the civil court competent in deciding in these cases at all? It is doubtless that the concept of damage caused by legislation is on the threshold between public and private law, and immunity decides whether it is one or the other. More and more articles are written on the topic of damage caused by legislation, and their approaches to the root of the problem are all different. In this study, by analysing the issues of immunity with regard to damage caused by legislation, I try to reveal the past and present of regulations, and in this way the damage caused by legislation can be separated from the state’s functional immunity.