Natalia Samodina, Client Legal Director at law firm The Legal Director, talks about the evolving legislative landscape of artificial intelligence (AI) and highlights some key points to consider.
AI is suddenly everywhere, becoming the buzz phrase de jour. Picking up on Presti’s April article, I’ve decided to explore the legal issues surrounding AI in the industry.
Whenever I hear “AI,” I think of intense scenes from Avengers: Age of Ultron, where AI turned on humans. Ten years ago, that felt sci-fi but now AI changes life in non-menacing ways – from FitBits to smart homes to AI robotic baristas (yes, I’ve used one).
In the furniture industry, AI can already assist in design, sales, marketing, and inventory management. And tomorrow we can perhaps expect AI-powered assembly lines and driverless delivery vans.
As amazing as that sounds, the commercial use of AI must be carefully managed due to its “black box” nature and the legal and ethical challenges it presents, which current laws and regulations don’t address.
Here are some key considerations.
Copyright and Data Protection
The UK government is pursuing a strategy, documented under the “AI Action Plan” to ramp up AI adoption to drive economic growth and establish UK as a global AI hub.
However, as AI development rests on the ability of AI systems to be trained by the so-called “web-scraping”, extracted copyrighted materials might form part of the analysed data. Without proper licenses from copyright holders, using AI-generated outputs may lead to copyright infringements.
In order to balance the competing interests of AI developers and copyright holders, the government’s 2024 consultation invited views on its intent to introduce:
- a text-and-data-mining copyright exception (“TDM exception”) which would allow AI developers to use TDM for any purpose (currently prohibited for commercial use); coupled with
- safeguards for copyright holders to ensure control over and payment for the use of copyrighted data by AI developers.
Despite a strong pushback to a TDM from the copyright holders, the government has decided to proceed with the TDM exception for any purpose without the right of a copyright holder to opt-out of the mining. This decision remains highly controversial, and corresponding legislative developments will need to be monitored.
It is worth noting that copyright use is a two-way street for furniture designers: they might like to use AI to boost their design process but their own copyrighted designs could be web-scraped through for AI training.
In addition to a copyright issue, any personal data that feeds the AI systems must be processed in line with UK GDPR (and other data protection laws for companies operating internationally), in particular by ensuring that (i) data used by AI is properly obtained and its use is permissible; and (ii) data protection policies and privacy notices accurately reflect the use of AI systems.
AI Regulatory Oversight?
On 4 March 2025 the Artificial Intelligence (Regulation) Bill (the “AI Bill”) was re-introduced to the Parliament for the second time, having originally been tabled prior to the 2024 general elections.
The AI Bill proposal, signifying persistent concerns over the risks posed by AI, suggests the setting-up of a centralised statutory AI authority to apply cross-sector and a set of codified principles for the ethical use of AI.
If passed as is, the AI Bill would align UK AI policy with the EU AI Act, imposing enforceable obligations on AI developers and deployers, which would constitute a significant departure from the government’s resistance to regulatory oversight – in which regard its approach is aligned with that of the US.
Given recent geopolitical and trade tensions between the US and UK, US and EU, it’s uncertain which approach will prevail.
UK companies operating internationally would have to keep an eye on AI usage regulations in multiple jurisdictions, and the relevant provisions might diverge (as is currently the case with the EU).
AI developer liability
For a user of an AI system developed by a third party, an important issue would be allocating liability in the event the AI system malfunctions. It is not presently known how AI arrives at a decision (this is routinely referred to as AI’s “black box” nature). As such, it can prove challenging to understand who is liable when something goes wrong. It is worthwhile investing in a robust contract with the AI developer which would adequately protect the user.
Employment
AI’s impact on the workforce is hotly debated, especially regarding job displacement. Although automation has already reduced the need for employees engaged in repetitive tasks like call centres and customer service (e.g., Google, Klarna and Ikea), AI engineers and maintenance workers are in high demand due to the novelty and complexity of AI systems. Despite rapid AI development, highly skilled workers like engineers and designers will remain essential for quite a while yet.
Separately, UK companies are increasingly using AI in the process of hiring and firing, while there’s no UK legislation specifically for AI in the workplace. This situation presents several issues (including those of possible bias, discrimination and data privacy), but changes might be on the horizon with the proposed Artificial Intelligence (Regulation and Employment) Rights Bill (the “AI Employment Bill”).
The AI Employment Bill seeks to address the legal and ethical challenges posed by the increasing use of AI in the workplace and focuses on regulating employers’ use of AI systems and promoting the safe and fair deployment of AI in the field of employment and HR practices.
The AI Employment Bill is at an early stage of the legislative process, and at present it is unclear whether it progresses to become law, and in what form.
Conclusion
While AI offers transformative potential for the industry, it also presents significant legal challenges. As laws emerge and potentially proliferate, proactive measures, such as adopting clear AI policies and staying informed about legislative developments, will be crucial in successfully navigating these challenges while harvesting all of the advantages that AI will offer.
If you would like more information, please give Natalia a call on 07747131233 or drop her an email at natalia.samodina@thelegaldirector.co.uk.
