Robotisation and automation. Who can be held responsible for what in implementations?

The implementation of automation and robotics in an enterprise is an extremely complex process, which includes the supply of a number of installations, elements, and devices, implementation and commissioning of the system, and supply of the necessary software. It also includes the preparation of the system installation site, which should meet the relevant criteria and requirements to enable the proper operation of the automation system. The implementation process usually involves a number of entities that should bear responsibility for the implementation area they implement.

The process of implementing automation and robotics in an enterprise is usually costly and burdened with a number of related risks. The topic of this article can be reduced to the question of what can go wrong in the process of delivery and implementation of automation and robotics and who bears responsibility in such cases. It is also worth considering how to prevent possible failures or minimise their effects.

Pre-implementation analysis and supplier selection

Deciding to implement automation and robotics in the enterprise requires conducting a detailed pre-implementation analysis, as part of which an implementation process design will be developed. The ordering party should appoint an appropriate team that will define the needs and goals of the project, as well as make recommendations regarding the selection of an appropriate solution provider. In this respect, specialised entities dealing with professional consultancy in the field of implementation of automation and robotics solutions can be used. As part of their services, such companies will conduct an audit and analysis of the customer’s needs and present optimal solutions. The next step will be the selection of technology and the appropriate supplier.

The responsibility for selecting the right automation supplier or suppliers of individual parts or components, as well as other contractors involved in the process and the success of the overall project, lies with the customer. In order to minimise damage and risks, it is crucial that a proper analysis and selection process of the supplier(s) is carried out. Key in this respect will be the formulation of a request for quotation that clearly and unambiguously presents the objectives and expectations of the contracting authority. The enquiry should first of all describe in detail the subject of the contract and the contracting authority’s expectations, as well as the conditions for participation in the procedure, required documents, supplier’s references, requirements to be met by the offer, and the method of selecting the supplier, including offer evaluation criteria.

It should be emphasised that entities participating in the tender procedure often incur significant expenditures to prepare the offer and conduct negotiations during the procedure. Polish law provides for the protection of the interests of a party in a situation where the other party conducts negotiations in breach of good practice. The regulations indicate that a party that commenced or conducted negotiations in breach of good manners, in particular without the intention to conclude an agreement, is obliged to compensate for the damage that the other party incurred by hoping to conclude an agreement (the so-called culpa in contrahendo).  The proper conduct of the supplier selection process, including a clear definition of offer selection criteria, will allow avoiding accusations of conducting negotiations in violation of good manners and liability towards entities that were not selected.

Damage caused in connection with the implementation

It is extremely important to define the principles and scope of liability for any damage caused in connection with and as part of the automation implementation process. These issues should be clearly and precisely defined in the agreement. In the remaining scope, we shall refer to the general principles of civil law in the scope of liability for damage caused.

There should be no doubt that the automation supplier should be held responsible for:

• any personal damage (to life and health),
• damage to property, property damage, and financial losses resulting from bodily injury or property damage caused in connection with conducted works,
• defects in products delivered or work performed.

In this respect, the parties are free to regulate in the contract the exclusions or limits of liability for particular areas of damage.

The parties should also unambiguously regulate who bears the responsibility and risk for delivery, unloading, storage, and installation of goods until final acceptance of the implementation. It seems that the supplier should bear responsibility within this area. In this respect, reference can be made in the contract to the relevant Incoterms clauses. The obligation to ensure the delivered goods should also be a necessary condition.

The risk minimisation for both parties may be constituted by the supplier’s obligatory third-party liability insurance for the amount corresponding at least to the remuneration value.

Schedule and delays

Delays in delivery or implementation work often cause losses, mainly on the part of the ordering party, both in the form of the so-called actual losses, i.e. caused by stopping production or provision of services in connection with the implementation, as well as in the form of the so-called lost benefits, i.e. those that the ordering party expected to achieve in connection with the implementation of automation and robotics. Responsibility for delays and related damages rests with the supplier. One of the forms of regulating the principles of liability is the right to charge contractual penalties for a delay in the implementation of the schedule agreed by the parties. Contractual penalties can be effectively reserved for a delay in the completion of individual stages of work or the entire implementation. The amount of contractual penalties is a free decision of the parties, however, it should be remembered that excessive contractual penalties may be reduced by the court in the event of a dispute in this respect.

It should be noted that stipulating contractual penalties for delay excludes the possibility of claiming compensation for damages resulting from the delay of works. To avoid this, it should be expressly stipulated in the contract that the rights to charge contractual penalties for delays do not exclude the rights to claim damages on this account under general rules.

The implementation of automation and robotics is a complex process that often involves several entities responsible for selected areas of the project. Often the commencement of work of individual contractors is dependent on the completion of the stage for which other contractors are responsible. Therefore, it is important to set reasonable deadlines for individual suppliers, as well as to correlate them with each other.

Breach of confidentiality

The implementation of automation and robotics systems usually involves the parties sharing a range of information and data with each other, which constitutes confidential information and may be regarded as business secrets. Confidential information may concern either party. The contracting authority presents its business plans and assumptions, sales or production figures, while the contractor discloses its technology and know-how. The terms of negotiations and the cooperation agreement concluded should also be treated as confidential information.

A breach of the rules for the protection of confidential information may consist in its disclosure, its transfer to unauthorised entities, or its use for purposes other than the performance of the contract. Liability for this may be incurred by either party – the so-called breaching party. The principles of liability are usually governed by a confidentiality agreement, which should be concluded before the information is transmitted, i.e. already at the stage of enquiry and tender submission.

Liability for breach of confidential information is usually sanctioned by a contractual penalty. However, it should be borne in mind that a breach of business secrets constitutes an act of unfair competition within the meaning of the Act on Fighting Unfair Competition. This act regulates the principles of liability for acts of unfair competition, including claims to which the entrepreneur is entitled. These include, for example, claims for removing the effects of prohibited actions or for repairing the damage caused.

Protection of personal data

When estimating risks before starting the implementation process, today it is also impossible to ignore the risk of potential liability due to a personal data protection breach. The principles of personal data protection and liability on this account are regulated in detail by the General Regulation of the European Parliament and of the Council (EU) 2016/679 (RODO). It is worth pointing out that both the contracting authority, acting as the data controller, and the contractor in the case where personal data has been entrusted to it for processing in connection with the performance of the contract (the so-called processor) are liable.

In case of violation of the rules of personal data protection, one has to take into account a potential control of a supervisory body – the President of the Office for Personal Data Protection, who may impose a high fine, but also liability towards persons whose personal data have been violated (e.g. made public or stolen).

Industrial property rights

When planning the implementation of automation and robotics, one should be aware that the provided solutions, in particular computer programs, but also designs, documentation, and other works, are subject to legal protection, mainly under copyright law.

The contractor, as part of the contract, should authorise the contracting authority to use all intellectual property developed or supplied in the performance of the contract. In order to avoid liability for intellectual property infringement, it is necessary to define licence conditions precisely and in the best way for the ordering party, especially as regards the number of users, period, rules for software modification, or rules for licence termination. In the case of the supply of software by third parties, the supplier should ensure that a licence is granted to the ordering party to the extent of enabling the use of the supplied solutions.

In order to avoid liability, the ordering party should also ensure itself the right to use the remaining works, inventions, industrial or utility designs, as well as all know-how, which were delivered as part of the supply and assembly of automation.

Summary

Delivery of automation and robotics solutions and their implementation covering the whole process – starting from design, delivery, assembly, and installation, through commissioning and post-implementation support – is burdened with a number of risks connected with the responsibility of individual parties involved in the project. The article presents selected issues and identifies liability risks in these areas. It is impossible to avoid risks in such a complex process, therefore, the principles of responsibility should be precise and defined in contracts with suppliers and contractors in a way that does not raise interpretation doubts.

The article was published in Miesięcznik Automatyka, issue 11/2021. – https://automatykaonline.pl/Automatyka/Roczniki/2021/11-2021

Author: Maciej Dudek specialises in intellectual property law, in particular copyright law, advertising law as well as unfair competition, consumer rights, protection of personal rights, and e-commerce.