Recklessness meaning

Experts warn that existing commercial insurance may leave holes when firms deploy customer-facing AI chatbots. Professional indemnity policies usually respond when clients pursue compensation for negligent advice or defective services delivered by a business. However, they typically won’t respond if the negligence stems from misinformation supplied directly to a customer by the AI system. Lawyers attribute this to long-standing, standardised exclusions introduced to limit cyber exposure. Applied broadly, these exclusions can also shield insurers from software-related losses, including AI. Richard Breavington, a partner at Reynolds Porter Chamberlain LLP, noted that while firms may sensibly rely on cutting-edge tools, if trouble arises they can still face liability and be unable to recover it fully. Protection gaps The breadth of these exclusions came to light in 2019, when regulators raised the alarm that, because of loose wording in standard commercial property policies, insurers were inadvertently extending cyber insurance to businesses. This underlined how exclusionary language designed to limit cyber exposure can equally be applied to software, including AI, leaving...

ARCHIVED: This Practice Note is archived and no longer maintained. From 6 April 2025, the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277, are revoked and replaced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024). However, CPUTR 2008, SI 2008/1277 continues to govern any conduct that occurred before 6 April 2025. For guidance on contravening professional diligence under DMCCA 2024, see Practice Note: Contravening professional diligence under the Digital Markets, Competition and Consumers Act 2024... The offence of contravening professional diligence The offence of contravening professional diligence is a criminal offence within the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 (CPUTR 2008). See Offences under the Consumer Protection from Unfair Trading Regulations 2008 [Archived]. Regulation 3 prohibits unfair commercial practices. A commercial practice is unfair where it, among other things: fails to meet the requirements of professional diligence; and materially distorts, or is likely to materially distort, the economic behaviour of the average consumer regarding the product ...

Damage to property caused by fire is charged as arson A person who, without lawful excuse, destroys or harms another’s property by fire, intending that outcome or being reckless as to whether it occurs, commits arson under section 1(3) of the Criminal Damage Act 1971 (CDA 1971). For guidance on criminal damage generally, see Practice Note: Criminal damage. In R v Booth, the omission of any reference to arson in the particulars led the court to treat the indictment as a nullity. The point was considered again in R v Drayton, where the court held that the allegation must, at the very least, be identified as ‘damage by fire’, ensuring the defendant is in no doubt that fire damage is alleged, an accusation carrying a harsher sentence than straightforward criminal damage. This is because arson attracts sterner penalties than simple criminal damage, by clear comparison. Simple arson, where no risk to life is alleged, is an either-way offence. Where the damage relied upon amounts to ‘significant damage by fire’,...

A bankrupt is discharged from bankruptcy one year after the bankruptcy begins, unless the court suspends that discharge because the bankrupt has failed to co-operate with the official receiver (OR) or the trustee in bankruptcy (trustee) (IA 1986, s 279). On discharge, the disqualifications and restrictions that apply to an undischarged bankrupt come to an end. For further detail on those disqualifications and restrictions, see Practice Note: The immediate effects of a bankruptcy order on the bankrupt. What is the bankruptcy restrictions regime and why was it introduced? In cases where bankruptcy is not the product of honest misfortune, but arises from the bankrupt’s misconduct or recklessness, it is regarded as appropriate that the bankruptcy disqualifications and restrictions should continue for longer than one year, to protect the public interest and act as a deterrent. Accordingly, the Enterprise Act 2002 (EnA 2002) introduced a new section (IA 1986, s 281A) and a Schedule (IA 1986, Sch 4A) into the IA 1986, so that, from 1 April 2004, the...