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Technology and Professional Liability: Emerging Challenges

Rapidly evolving technology is reshaping the landscape of professional liability in fields ranging from healthcare to accounting. The integration of new tech into various professions is not just a trend; it’s a seismic shift that brings with it a host of emerging challenges and legal considerations. 

Monitoring these new considerations and challenges should be an ongoing concern for anyone working as a certified professional. Below, we’ll explore how technological advancements are influencing the assignment of professional liability and what professionals need to be aware of to protect themselves.

The Digital Transformation of Professional Services

From healthcare to legal services, technology has permeated every sector. Telemedicine, online legal consulting, automated accounting systems, and other digital services are becoming the norm. While these advancements enhance efficiency and accessibility, they also introduce new liabilities. Professionals must now navigate not only their traditional responsibilities but also the complexities introduced by digital platforms.

For example, the rise of remote services, accelerated by the COVID-19 pandemic, presents unique challenges. In telemedicine, for instance, diagnosing a patient without a physical examination can increase the risk of errors. Professionals must be aware of the limitations of telecommunication and ensure that their practices comply with professional standards and legal requirements.

Cybersecurity Risks

One of the most pressing concerns is cybersecurity. Professionals in fields like law, healthcare, finance, and IT are increasingly held liable for breaches in client data security. In addition, many professions have codes of ethics or standards that now include cybersecurity expectations. Failure to adhere to these standards can lead to professional disciplinary actions, apart from any legal consequences.

As professionals increasingly store and handle sensitive client information digitally, the risk of data breaches and cyber-attacks grows. A breach can lead to significant legal liabilities, especially under California’s stringent data protection laws. Professionals must ensure robust cybersecurity measures are in place and stay informed about the evolving nature of cyber threats.

Furthermore, professionals often rely on third-party service providers, whose security measures may also impact their liability. If a third-party provider is compromised, it can have legal implications for the professional relying on their services. If a cyber attack results in the loss or compromise of sensitive client information, professionals may face lawsuits for failing to protect that data, even if they were not directly responsible.

Software and Tool Reliability

Dependence on specialized software and tools raises questions about reliability and error. For instance, if an accounting software glitch leads to significant financial discrepancies for a client, who is liable? Or, if a flaw in legal research AI leads to an oversight, how does that impact professional responsibility? 

In general, professionals have a legal and ethical duty to ensure the tools they use are reliable and fit for purpose. If a professional uses a tool known to be unreliable or fails to verify its reliability, they could be held liable for any resulting damages.

More specifically, many industries are regulated with respect to the tools and software they use. For example, in the medical field, devices and software used for patient care must meet specific regulatory standards. Non-compliance can result in legal penalties and professional liability.

AI and Automated Decision-Making

Artificial Intelligence (AI) is increasingly used for decision-making in various fields. However, AI systems can be flawed, and their decisions may not always be transparent or explainable. As a result, when decisions are made or influenced by AI systems, it can be challenging to determine who is liable for any resulting damages – the developer of the AI, the user, or another party. 

This complexity arises because AI systems can learn in ways that are not entirely predictable or transparent. The opacity involved can lead to liability issues, particularly if an AI’s decision negatively impacts a client.

Professionals who rely on AI for decision-making must ensure these systems are accurate and reliable. If an AI system provides incorrect or biased recommendations that lead to professional errors, it could result in legal claims against the professionals using them.

Legal Implications and Regulations

Lastly, professionals must navigate a rapidly evolving legal landscape. The legal landscape is evolving to address the increasing prevalence of cyber threats. This includes new regulations and standards for data protection, such as the General Data Protection Regulation (GDPR) in the EU. Professionals must stay informed and compliant with these regulations to avoid legal repercussions. 

For that reason, there’s a growing demand for cyber liability insurance policies that cover data breaches and other cyber-related liabilities. This type of insurance can help mitigate the financial impact of a cyber attack on a professional practice.

Similarly, as AI becomes more prevalent, regulatory bodies in various industries are developing standards and guidelines for its use. Compliance with these regulations is crucial to avoid legal implications. Professionals need to be proactive in understanding and mitigating these risks, staying informed about evolving regulations, and ensuring they have appropriate insurance coverage.

Consult Experienced Attorneys About Your Professional Liability

As technology continues to advance, professionals must be vigilant about the associated liabilities. Adopting a proactive approach, such as regular risk assessments and staying informed about technological and legal developments, is essential. Remember, while technology can significantly enhance service delivery, it should be integrated thoughtfully and with a keen awareness of the associated legal responsibilities and risks.

For professionals in California, it’s more important than ever to consult with a knowledgeable, professional liability attorney who can provide guidance tailored to your specific circumstances and the technologies you employ. Stay ahead of the curve and ensure that your practice not only benefits from technological advancements but also remains compliant and protected against emerging liabilities.

At Furukawa Castles LLP, our experienced attorneys are available to help you better understand your legal obligations regarding emerging technologies. Whether you want to protect yourself from potential claims or respond to a claim you’re already facing, our skilled professional liability attorneys can help. We encourage you to schedule your consultation today to learn more about how we can assist you with current and potential professional liability claims.