DIGITAL RISKS THROUGH CIVIL LIABILITY

Study LXXXIX – Regulation of Digital Risks through Civil Liability Law

Digital risk, namely the risk arising from digital systems and algorithms, presents distinct features that challenge existing civil liability frameworks. Such systems, including artificial intelligence, automated decision-making systems, recommendation engines, virtual platforms, and other digital applications, may result in novel forms of damage, involving multiple actors, complex and opaque causal chains, and cross-border activities. As legislators seek to determine whether existing liability frameworks are adequate or require reform, they face the difficult task of balancing innovation with effective protection against digital risks. Despite the growing importance of these issues, there is currently no international guidance to support legislative responses, and national approaches are increasingly diverging.

The project on the Regulation of Digital Risks through Civil Liability Law (Digital Risks and Civil Liability project) seeks to address this gap by developing international guidance to assist legislators in designing coherent and effective civil liability frameworks for digital risks. Drawing on comparative legal analysis and taking into account the diversity of legal traditions, the project aims to identify the key considerations that should inform legislative reform and promote greater consistency across jurisdictions. It will initially develop methodological principles to support legislators in assessing and regulating digital risks and will subsequently develop substantive principles on civil liability for digital risks.

The project on Digital Risks and Civil Liability originated from a proposal submitted by the German Federal Ministry of Justice to UNIDROIT to develop principles for the regulation of digital risks under civil liability law (see Unidroit 2025 – C.D. (105) 4 rev., Annexe IV).

At its 105th session (Rome, 20-23 May 2025), the UNIDROIT Governing Council recognised the relevance and interest of the topic and recommended that the project be included in the 2026-2028 Work Programme with medium priority (see Unidroit 2025 – C.D. (105) 32, para. 120). Following this recommendation, the General Assembly, at its 85th session (Rome, 11 December 2025), approved the inclusion of the initiative as a medium-priority project (see Unidroit 2025 – A.G. (85) 3, para 57; Unidroit 2025 – A.G. (85) 14, Item no. 6).

The project will proceed in two stages.

The first stage will focus on developing a series of methodological principles to guide legislators in identifying and assessing the critical elements and relevant variables to be considered when designing or reforming civil liability frameworks for digital risks. This work will include a comparative analysis of digital risk scenarios, examining their social, economic, and technological dimensions, as well as a mapping of national, regional, and international legislative and regulatory approaches. The objective is to identify the key considerations and emerging best practices that should inform legislative responses to digital risks. Given its methodological focus, this phase will also draw on the experience of UNIDROIT’s work on the Economic Evaluation of International Commercial Law Reform (EE ICLR Project), conducted under the auspices of the Cape Town Convention Academic Project. The outcome of this stage will provide the analytical foundation and methodological framework for the subsequent normative work.

The second stage will consist of drafting substantive principles on civil liability for digital risks. Building on the findings of the first stage, these principles will seek to provide international guidance while accommodating the diversity of legal traditions and approaches to civil liability.

An Exploratory Workshop is expected to take place during the fourth quarter of 2026 to discuss the Secretariat’s preliminary work and facilitate an exchange of views among experts on the key legal and technological issues identified. The Workshop will inform the further development of the project and help define its scope and direction.

Further information will be provided in due course.

Consistent with UNIDROIT’s established working methodology, the exploratory phase will be followed by the establishment of a formal Working Group to develop principles, as determined in light of the outcome of the exploratory work.