Lawyers pick up the pieces on AI oversight

With AI systems spreading across the world, the question arises who is responsible when they cause harm, fail or bring about unexpected results. This is becoming a major problem for businesses. As there isn’t clear regulation, disputes are increasingly going to litigation.

Billions of pounds are at stake in technology investment, particularly in AI, with UK’s Labour government pledging £2 billion towards an AI initiative by 2029/30.

However, the speed at which businesses are adopting AI models, alongside the increase of AI startups offering services, means that the law has not kept up. Unlike the European Union, which has introduced the AI Act, the UK has no single overarching framework. Instead, existing laws on data protection, intellectual property and discrimination are being applied to AI systems.

Critics say the government is moving too slowly on regulation. In September, then technology secretary Peter Kyle argued that the UK needed to cut red tape to stay competitive in the global race for tech leadership.

So, what happens when an AI model goes wrong? Businesses are increasingly turning to the courts and to lawyers who charge premium rates, to navigate these complex cases.

According to DLA Piper, one of the world’s largest global law firms, the number of AI-related securities class actions is rising in the US. In the UK, the High Court recently handed down a landmark judgement in a major intellectual property dispute involving copyrighted images.

Landmark judgement: Intellectual property (IP) law is complex, filled with technical language and fine distinctions. Yet for businesses, it is crucial for protecting products and brands — which is why many law firms have entire departments dedicated to it.

Last June, US image library giant Getty Images brought a historic case before the High Court in England against UK-based AI firm Stability AI, the company behind the image generator Stable Diffusion. The case centred whether Stability AI had breached Getty’s intellectual property rights by using copyrighted images to train its AI model.

Last month, Mrs Justice Joanna Smith handed down her ruling, dismissing Getty’s core IP claims while granting it limited success on historical issues.

The court rejected Getty’s primary claim of secondary copyright infringement under the copyright, Designs and Patents Act 1988.

It found that while an “article” could be considered intangible under the Act, an AI model such as Stable Diffusion did not qualify as an “infringing copy” — meaning no infringement had occurred.

Senior associate at EIP — law firm of litigators and patent attorneys — Ellen Keenan-O’Malley, said the dismissal “wasn’t surprising”, noting that Getty had withdrawn one of its key arguments during the proceedings.

Partner at international law firm, Lewis Silkin, Nick Buckland, said the case “leaves many questions unanswered”. He added: “Given the uncertainties and the specific facts of this case, I expect to see more litigation over how AI interacts with the IP rights of creators”.

Getty in a statement, urged governments “including the UK” to introduce stronger transparency rules “to prevent costly legal battles and allow creators to protect their rights”.

Buckland added: “The UK government has made no secret of its desire to unleash the power of AI to drive economic growth. The aim is to find a regulatory solution that achieves that while adequately protecting creators”.

Clair Robinson, of counsel at Powell Gilbert, law firm focused exclusively on IP litigation, said it would be interesting to see whether Getty appeals the ruling. “The evidential challenges Getty faced — including those that led to it dropping its primary infringement claims — could influence its next steps”, she said.

While many in the creative industries are frustrated by the ruling, others are calling for proper regulation to prevent similar cases. But with the government focused on cutting red tape and competition in AI intensifying, it may once again be left to the lawyers to pick up the pieces.

Andy Jalil

The writer is our foreign correspondent based in the UK