How to prevail when technology fails - Flipbook - Page 11
How to mitigate the legal fallout from technology failure | 11
Changing regulation, industry
convergence and advanced
technologies increase litigation risk
Following technology failure
or regulatory non-compliance,
litigation may be brought
by individual businesses or
consumers, consumer groups,
industry regulators or a group
of consumers.
In Europe, the risk of collective
litigation brought by consumers
is set to increase when the new
EU directive on collective redress
is finalized. This makes it easier
for consumers to sue collectively
for mass harm.
The risk of technology failure
leading to a regulatory
investigation or litigation is
increased by the convergence
between the technology sector
and traditional industries.
For example, automotive
manufacturers or MedTech
companies which incorporate
technology that gathers or
processes personal data may
not be fully aware of data privacy
regulation, or may not have the
resources to ensure compliance.
Similarly, technology companies
developing products for
traditional sectors may not be
fully aware of product liability or
product safety directives.
As businesses deploy more
advanced technology within
their organizations, the legal
consequences of failure grow
more complex. Businesses in
multiple sectors are increasingly
exploring blockchain technology,
for instance, and there are
still important unanswered
questions about which
jurisdiction any dispute should
be heard in and how judgments
can be enforced if blockchain
should fail.
“We’re seeing legal disputes arise from technology failure where there
is convergence between traditional and new sectors. Traditional
manufacturing companies, for example, may not be aware of the
complex data protection regulation that can apply to new products they
develop, or may not practice privacy by design.”
Lauren Colton | Partner, Hogan Lovells