Strict Liability

Strict liability is a legal doctrine under which a party can be held responsible for harm or damages without the injured party needing to prove negligence, fault, or intent, applied to inherently dangerous activities and defective products to protect consumers and allocate risk to those best positioned to prevent harm.

In the context of AI systems and crypto technology, strict liability frameworks are emerging to address accountability when autonomous systems cause financial or physical harm. The EU Product Liability Directive adopted in December 2024 explicitly includes software and AI systems as "products" subject to strict liability, covering autonomous AI behavior, cybersecurity vulnerabilities, and post-market failures where manufacturers retain control over AI systems.

The European Parliament has proposed strict liability specifically for high-risk AI systems as defined by the EU AI Act, including AI used in payment services, creditworthiness assessment, and autonomous transaction execution. Under strict liability, AI providers and deployers would be liable for harm caused by AI systems without requiring consumers to prove the company was negligent, shifting the burden of proof to manufacturers and creating stronger incentives for robust testing, oversight, and safety mechanisms in AI deployment.