Artificial Intelligence and Legal Liability: Lessons from Emerging Litigation and Regulation
Artificial Intelligence and Legal Liability: Lessons from Emerging Litigation and Regulation
Publish Date: 2026-06-15 15:06:00
Source Domain: www.chugh.com
More than two decades ago, internet lawyers were dealing with cybersquatting, trademark dilution, metatags, and domain name disputes, all of which at the time felt novel and disruptive.
Today, artificial intelligence presents a similar moment, except the scale is significantly larger. AI systems are now embedded into hiring, healthcare, finance, customer service, and even legal practice itself, often in ways businesses do not fully appreciate until liability questions arise.
As more businesses integrate AI into their daily workflow, companies and employees are forced to ask what legal exposure they are opening themselves up to. The answer depends on whether liability arises from misrepresentation, failure to do mandatory disclosures, copyright infringement, liability from defective product, or other harm caused by AI use or chatbot. In some cases, liability is further dependent on physical location but given the fluidity, it is best to always strive for compliance with the most restrictive provisions to remain compliant. For example, a company could be headquartered in Idaho but have employees or clients in Europe and therefore be impacted by stricter EU laws.
While specific laws regulating AI in United States are still evolving, courts are turning to the traditional theories to impose liability. Businesses should remain aware of the new laws and applicable theories when incorporating AI systems into their practices.
Product Liability Theory
Product liability may become one of the most important areas of AI litigation. Traditional product liability law was built around physical products that behave predictably once sold. AI systems are different. They learn, adapt, and sometimes generate outputs even their developers cannot fully anticipate. Courts are now wrestling with whether AI systems should be treated as products, services, or something in between.
Garcia v. Character Technologies, Inc., Case No….
