On 27 November 2023, the Council of the European Law Institute (ELI) approved an interim report for its project on Guiding Principles and Model Rules for Algorithmic Contracts. The project is directed by Christian Twigg-Flesner together with co-reporters Teresa Rodriguez de las Heras Ballell, Christoph Busch and Marie Jull Sørensen.

The report provides an assessment of the extent to which current EU consumer law directives (on which much of UK consumer law continues to be based) are capable of dealing with the rise of AI-driven Automated Decision Making (ADM) in consumer contracts.

The analysis in the report centres on the idea of a “digital assistant” which could be deployed by a consumer to automate the process of concluding a contract for the consumer without the need for any active involvement by that consumer. With continuing advances, the arrival of digital assistants, or “personalised AI Agents”, could soon become a reality. It is therefore essential that the implications for consumer law are understood and that steps are taken to ensure that contracts concluded through digital assistants do not fall outside the scope of consumer law.

This interim report sets out a number of guiding principles that inform the assessment of specific EU consumer law directives. The central principle is that the actions of a digital assistant should be attributed to a consumer, leading to the continued application of EU consumer law requirements. The report identifies a number of changes that could be made to existing law, and also argues strongly for the introduction of several design requirements for digital assistants to ensure that consumers retain the ability to control and intervene in the ADM processes provided by digital assistants. The focus of the report is deliberately confined to reviewing the essential actions required to ensure EU consumer law is ready, without claiming that this would be the best approach for dealing with increased ADM.

In the second phase, the co-reporters and the project team will develop guiding principles and a set of model rules on algorithmic contracting to address the implications of using AI tools at every stage of the contract lifecycle. The project’s output is intended to inform law reform discussions throughout Europe and beyond.

The interim report on the ADM readiness of EU consumer law will now be published online by ELI, and there will be several dissemination events in the new year.