Product manufacturers to navigate uncertainty in the AI era

Product liability landscape to shift in 2024, introducing new risks to manufacturers

This year, as artificial intelligence (AI) becomes increasingly integral to the day-to-day operations of large-scale manufacturers globally, one thing is certain: the landscape for product liability is about to shift, and manufacturers must navigate a new era of uncertainty. AI offers significant benefits, but it also introduces new risks that manufacturers must be aware of.

Expect AI to be increasingly utilized in simulating engineering design processes, enabling the generation of multiple design options for a single product. Manufacturers must carefully assess potential liabilities arising from AI's role in this area, particularly concerning defects that could lead to product failure and subsequent harm or injury.

AI will also be heavily used to augment robots, assisting employees in streamlining production processes like assembly and packaging, all while upholding stringent hygiene standards. However, without careful oversight, this collaboration could increase the risk of errors.

Additionally, we foresee a more pronounced utilization of AI in predictive maintenance, logistics, supply chain management, and quality control. As with generative design in product development and robotics automation, manufacturers must remain vigilant for unexpected issues that AI might introduce in these novel applications.

Moreover, it's crucial for businesses to proactively monitor the escalating regulatory focus on AI risks, especially the EU's AI Act, a pioneering initiative in setting AI usage guidelines. In North America, the development of regulatory frameworks is likely to continue, with lawmakers engaging in dialogues with the tech sector. Specifically, in Canada, expect advances in AI legislation following the release of the voluntary code of conduct for generative AI. Both the United States and Canada will closely monitor the EU's AI regulations to inform their own approaches.

In 2024, expect the EU to intensify its focus on refining the AI Liability Directive, complementing the AI Act as the world's first AI liability framework. This framework addresses challenges in identifying liable parties and proving wrongful actions in AI-related cases. It aims to ensure legal certainty, increase consumer trust, and aid in liability claims for damages caused by AI.