CIVIL LIABILITY OF ROBOADVISORS AND TECHNOLOGICAL NEUTRALITY OF SECTORAL REGULATION
Article Sidebar
Main Article Content
Abstract
This paper examines civil liability frameworks for roboadvisors within Czech law through systematic interpretation of Civil Code (CC) provisions and their interaction with MiFID II requirements. Using legal-dogmatic methodology supplemented by comparative analysis of foreign AI liability debates, this research identifies five distinct roboadvisor business models and evaluates their liability implications. The analysis reveals that contractual liability under § 2913 CC emerges as the primary framework, with professional standards of care (§ 5 CC) being objectified through sectoral financial regulation. Key findings demonstrate that existing tort law principles provide adequate coverage for AI-driven financial services without requiring fundamental legislative reform. The study identifies specific challenges in determining liability for machine learning algorithms exhibiting unforeseeable behaviour patterns and establishes criteria for distinguishing between natural market risks and legally compensable damage. Different business models create varying liability distributions, with white-label solutions and client-uploaded algorithms presenting the most complex attribution problems. While traditional liability frameworks prove adaptable to roboadvisor operations, the research identifies procedural law adjustments – particularly regarding burden of proof and evidentiary standards -as necessary refinements. The principle of technological neutrality in sectoral regulation effectively prevents regulatory arbitrage while maintaining innovation incentives. Lost profits claims face limitations under current Supreme Court jurisprudence, requiring a case-by-case evaluation of contractual appreciation obligations versus hypothetical profit calculations. The study concludes that civil liability for roboadvisors can be effectively managed within existing legal structures through enhanced algorithmic governance, robust documentation practices, and appropriate professional standards of care rather than novel legislative constructs.
Article Details
Copyright and originality of the offered manuscript
1. It is assumed that the manuscript offered has not been previously published. It is expected that the authors will inform the editorial board of TLQ if the entire manuscript, its parts or some relevant results have been previously published in a different publication at the level of an article in a reviewed scientific magazine or monograph. Should the editorial board of TLQ conclude that this condition was not fulfilled the review process may be terminated.
2. It is assumed that the submitted manuscript is an original academic work. If that is not the case the author needs to provide information regarding all circumstances that could raise doubts whether the manuscript is the outcome of original research.
3. By submitting the manuscript the author acknowledges that after the publication in The Lawyer Quarterly her/his work will be made available online to the Internet users and also kept by the Library of the Academy of Sciences of the Czech Republic. Author's rights to further use the work remain unabridged.