Report on the IMKR Lecture “Legal Tech and European Consumer Protection” by Prof. Ebers
On January 20, 2021, the first IMKR lecture of the new year took place. Following opening remarks by Prof. Rösler, Prof. Dr. Martin Ebers, Professor of IT Law at the University of Tartu in Estonia and President of the Robotics & AI Law Society (RAILS) in Berlin, spoke on “Legal Tech and European Consumer Protection.” His lecture focused on the extent to which European consumer law can ensure protection in the context of legal tech applications. The topic could hardly have been more timely: On the very day of the lecture, the German federal government published its draft bill for a law promoting consumer-friendly offerings in the legal services market (in German).
Prof. Ebers began by outlining the various forms that legal tech applications take in consumer markets. These may be limited to providing marketplaces for legal services, or they may themselves convey legal information or provide legal advice tailored to the user. They are also used in the areas of contract drafting and review, as well as out-of-court dispute resolution. Although legal tech applications are predominantly used in the B2B sector, their use in consumer markets is gaining importance. Examples include www.flightright.de and www.wenigermiete.de, whose business models are based on enforcing air passenger and tenant rights, respectively.
Prof. Ebers then explained the current legal framework for legal tech applications. In the context of legal services, this framework consists of consumer law, data protection law, and the specific regulation of legal services – in Germany, the Legal Services Act. This interplay results in a rather paternalistic form of consumer protection for traditional legal services. Legal tech applications, however, often do not fall under the specific regulation of legal services. Distinguishing between client-specific legal advice and less strictly regulated standardized legal information is difficult in the context of legal tech applications and has not yet been definitively clarified by case law (see BGH, NJW 2020, 208 – wenigermiete.de, and OLG Köln, NJW 2020, 2734 – Smartlaw).
The specific regulation of legal services ensures minimum quality standards and is intended to prevent conflicts of interest. It also requires legal service providers to carry liability insurance. If this protection does not apply when using legal tech applications, the protection afforded by European consumer law becomes decisive. Accordingly, the prohibition of unfair commercial practices under Art. 5(1) of Directive 2005/29/EC carries particular weight for legal tech providers. However, there is a lack of established standards for determining the professional duty of care of legal tech providers.
Legal tech providers must also comply with consumer law information requirements. However, these are of a general nature and not tailored to the individual advisory services provided by a legal tech application. The same applies to standardized consumer withdrawal rights (e.g., Article 9(1) of the Consumer Rights Directive 2011/83/EU), which do not offer specific protection against legal tech providers.
Prof. Ebers further explained that Directive (EU) 2019/770 on digital content, which has yet to be implemented, also applies to legal tech providers. Consequently, legal tech applications must meet the quality requirements of Article 8(1) of Directive 2019/770. However, there is also a lack of established standards here to serve as a benchmark for compliance with these requirements. Furthermore, European consumer law does not provide answers to new phenomena such as legal chatbots or the use of artificial intelligence in data analysis. This issue will gain in importance in the future, as illustrated by the White Paper on Artificial Intelligence (COM(2020) 65 final) presented by the European Commission.
In conclusion, Prof. Ebers advocated for the introduction of tailored consumer protection standards for algorithmic services, such as legal tech applications, at the European level.
