Civil Liability of Roboadvisors and Technological Neutrality of Sectoral Regulation

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11220%2F25%3A10502817" target="_blank" >RIV/00216208:11220/25:10502817 - isvavai.cz</a>

Result on the web

<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=d6aH5k1Obu" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=d6aH5k1Obu</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Civil Liability of Roboadvisors and Technological Neutrality of Sectoral Regulation

Original language description

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.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50501 - Law

Project

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Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2025

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

The Lawyer Quarterly

ISSN

1805-8396

e-ISSN

1805-840X

Volume of the periodical

15

Issue of the periodical within the volume

4

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

19

Pages from-to

503-521

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-105025889543