Explainable AI under Contract and Tort Law: Legal Incentives and Technical Challenges

28 Artificial Intelligence and Law (2020), Forthcoming

25 Pages Posted: 12 Feb 2020

See all articles by Philipp Hacker

Philipp Hacker

Humboldt University of Berlin

Ralf Krestel

University of Potsdam - Hasso Plattner Institute (HPI)

Stefan Grundmann

Humboldt University of Berlin - Faculty of Law; European University Institute - Department of Law (LAW)

Felix Naumann

University of Potsdam - Hasso Plattner Institute (HPI)

Date Written: January 3, 2020

Abstract

This paper shows that the law, in subtle ways, may set hitherto unrecognized incentives for the adoption of explainable machine learning applications. In doing so, we make two novel contributions. First, on the legal side, we show that to avoid liability, professional actors, such as doctors and managers, may soon be legally compelled to use explainable ML models. We argue that the importance of explainability reaches far beyond data protection law, and crucially influences questions of contractual and tort liability for the use of ML models. To this effect, we conduct two legal case studies, in medical and corporate merger applications of ML. As a second contribution, we discuss the (legally required) trade-off between accuracy and explainability and demonstrate the effect in a technical case study in the context of spam classification.

Keywords: explainable AI, interpretable machine learning, data protection law, tort law, medical AI, medical malpractice, contract law, corporate mergers, liability

JEL Classification: K12, K13, K22

Suggested Citation

Hacker, Philipp and Krestel, Ralf and Grundmann, Stefan and Naumann, Felix, Explainable AI under Contract and Tort Law: Legal Incentives and Technical Challenges (January 3, 2020). 28 Artificial Intelligence and Law (2020), Forthcoming. Available at SSRN: https://ssrn.com/abstract=3513433 or http://dx.doi.org/10.2139/ssrn.3513433

Philipp Hacker (Contact Author)

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, Berlin 10099
Germany
+49 30 2093 3498 (Phone)

HOME PAGE: http://hu-berlin.academia.edu/PhilippHacker

Ralf Krestel

University of Potsdam - Hasso Plattner Institute (HPI) ( email )

Prof.-Dr.-Helmert-Str. 2-3,
Potsdam
Germany

Stefan Grundmann

Humboldt University of Berlin - Faculty of Law ( email )

Unter den Linden 6
Berlin, D-10099
Germany

European University Institute - Department of Law (LAW) ( email )

Via Bolognese 156 (Villa Salviati)
50-139 Firenze
ITALY

Felix Naumann

University of Potsdam - Hasso Plattner Institute (HPI) ( email )

Prof.-Dr.-Helmert-Str. 2-3,
Potsdam
Germany

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