Dr.

Paulius Astromskis Faculty

of Law

Vice Dean for Digitization, Faculty of Law

paulius@astromskis.lt

Regulation Model of
Electronic Persons
Inspiration Inspiration Inspiration

Inspiration
The inspiration of this paper stems from the European
Parliament resolution of 16 February 2017 with
recommendations to the Commission on Civil Law Rules
Concept of Electronic Personality Assumption of Technological Singularity Problem, Aim and Tasks
Singularity starts with the moment in time and velocity (power) of computation,
The European Parliament has recognized the need of new Civil Law Rules on Robotics and when artificial intelligence becomes equal to a human intelligence, and transcends The problem of the research is that it is unclear how to regulate electronic persons.
has called on the Commission to explore, analyze and consider the implications of all possible towards the post-humanistic era (Kurzweil, 2005)
The aim of this research is to conduct interdisciplinary analysis of the standard regulation
Intellectual Level/Power

legal solutions, such as:

on Robotics (2015/2103(INL))
However, neither science nor European Parliament has
provided a holistic framework that could (should) be used
to regulate the most sophisticated autonomous robots
qualifying for Electronic Personality.
Taking into account the exponential development of technologies, the probability of framework by describing and explaining its elements, and consequently developing the
“creating a specific legal status of electronic persons for the most singularity scenario should not be considered as a mere fiction and should not be
conceptual regulation model of the electronic persons.
excluded from scientific modeling.
sophisticated autonomous robots, responsible for making good any
damage they may cause, and possibly applying electronic
personality to cases where robots make autonomous decisions or
The Singularity Trans-Humans? The implementation of three tasks should allow achieving the aim of this research and
solving the problem:
otherwise interact with third parties independently” 1 1) to explain the elements of the standard regulation framework;
2) to analyze the structure of the electronic persons regulation;
Human Intellect 3) to develop the conceptual regulation model of electronic persons.
Machine
Intelligence
1 European Parliament resolution of 16 February 2017 with recommendations to the Commission on Civil Law Rules Time 1950 2000
on Robotics (2015/2103(INL)), article 59 (f)
(R. Kurzweil, The Singularity is near. When Humans transcend biology (NY Penguin Group, 2005)

Standard Regulation Framework Standard Regulation Framework Standard Regulation Framework

Standard regulation framework The anatomy of transaction

The ontology of law and institutions Anatomy of transaction and and the reasons
reasons of its regulation
of its regulation Summary of the standard regulation model Level of Fundamental Values of Society

In order to change (quash or modify) status quo of a person, one has to act, Fundamental values of society (like life, liberty and pursuit of happiness)
The legal and economical perspective rests on the assumption that the regulator acts as an intermediary between society and Pursuit of
thus resulting in his/her new status. Accordingly, this transaction starts determine certain limits of regulatory discretion; whereas regulatory Life Liberty
This part provides the inductive analysis of the fundamental values of that society.
Needs Changes institutions (e.g. parliament, courts, etc.) transform the understanding of
Happiness
/Property
Ac�ons issues maywith the need (incentive) and is followed by the elements of action
standard regulation framework and its elements, thus The analysis of transactions
(incen�ves) and regulation(results) Needs Ac�ons Result
+ fundamental values of society.
Fundamental

be performed using the market failures’ framework,(manifest of the will through (manifest
(incen�ves)
activity or silence) and
of will) result.
values level

EMBEDDEDNESS: Informal (efficiency)

completing the first task of this research. According to the legal ontology Idea of Law ins�tu�ons, customs, Williamson (1998, 2000) has set
started by Coase and developed mostly by Williamson.
Level of Regula�on

approach, the idea of law has tradi�ons, norms, religion similar structure of economic Legislative, Executive and Judiciary bodies shape the market transactions
Under a “very unrealistic assumption”
Single transaction process (unitof zero transaction
of analysis) scheme cost, outcome of
impact on legal relationships (and institutions, starting from Single transaction process block (unit of analysis) scheme. through laws and regulations. However, market is very dynamic and Laws and Legisla�ve/
transactions will be efficient regardless of the legal regulation (Coase, 1960) Execu�ve/
In order to achieve it, the first sub-part introduces vice versa) through intermediary – INSTITUTIONAL
informal ones (like traditions and continuous innovations are encountered there, so the regulation level is Regula�ons Judiciary

regulators (legislative, executive religion) at the top, towards rules also under the direct influence of market transactions
ontology of law and institutions. The second part is ENVIRONMENT: formal rules
and their governance in the
Regula�on level

of the game
and judicial branches of
meant to describe the approach to the need of Legal Rules middle, and finishing with Transaction costs are
Zero transaction the reason
costs is “a why veryfree market
unrealistic
Level of Transac�on
government). The everyday world transactions (needs, actions and/or results) are at a
resource allocation and fails, constituting
assumption” (Coase,the major
1960), economic
therefore efficiency
the major task of Transac�on
regulation, while the last sub-part summarizes it all The legal rules have to be chosen GOVERNANCE: Play of the employment transactions at the and justiceisproblem.
regulation to diminish these transaction costs:
constant demand for regulation due to the market failures and
into the standard regulation framework. within the context of the idea of game
bottom. 1) With regard to ExAnte costs, the duty to foster transaction costs thereof. Assumedly these failures results from the Needs
Ac�ons Changes
(incen�ves) (results)
law that limits the discretion of
Underaccessthis
to data and computing
framework, power to model
standard process itofis factors of transaction costs – inevitable part of the human nature to err.
regulator and has to be reconciled Lower level determines the
impliedrests
regulation (thusondiminishing
the human perils
andof environmental
uncertainty and
Transac�ons

with the actual legal relationships. RESOURCE ALLOCATION AND development of higher level and The standard model of regulation rests on human intelligence, which is
Legal Rela�onships bounded
market rationality),
failures and
factors (Williamson, 1986):
level

EMPLOYMENT vice versa. Bounded

2) With regard to ExPost, the duty to foster accessibility limitedly rational, opportunistic, and it is performed with uncertainty and Ra�onality
Opportunism

(i) to
bounded rationality
legal system and toanddiminish
opportunistic human
dependency on asset specificity
Alignment of the ontological levels of law (Vaišvila, 2004) intelligence,
scarce and is implied (thus diminishing the
resources Uncertainty Asset Specificity
and structure of institutions (Williamson, 1998, 2000) Transac�on Cost Factors
(ii) perils
uncertainty and asset
of opportunism specificity
and asset specificity) of the Thus the major task of regulator is to diminish the perils of these
This theoretical alignment allows carrying out legal analysis of electronic persons‘ regulation issues using the economic Coase Theorem environment. Transaction cost factors (adopted from Ruester, 2010) transaction cost factors.
Transaction cost factors (adopted from Ruester, 2010)
and consequent market failures’ framework. Standard model of regulation in theory

Structure of Electronic Persons Regulation Structure of Electronic Persons Regulation Structure of Electronic Persons Regulation

Structure of Electronic Persons Regulation

Laws in Robots: Standardization of Values Laws by Robots: Rise of the LegalTech Laws on Robots: Privacy of Electronic Persons
Asimov‘s Laws (1943)2 revised: Mehl (1958), Automation
This part analyzes the elements of the electronic It is assumed that: supports/
(1) A robot may not injure a fundamental values of human being or, through inaction,
in the Legal World: From
1958 business
controls
so�ware
so�ware
personality in the context of standard regulation the Machine Processing of
" "
Fundamental

Fundamental
Fundamenta
l values level

WORLD processes so�ware

values level

values level

• Security of transactions increases as

Laws in allow a fundamental values of human being to come to harm. Laws in Legal Information to the Laws in machines system
system
system
framework, thus completing the second task. Robots Robots
Law Machine
Robots
transaction costs decrease. people
components
(2) A robot must obey the orders given it by human beings except where such orders organiza�ons
• Transaction costs decreases as the
would conflict with the First Law. amount of available data on needs,
records
events, e.g.,
In order to achieve it, the first sub-part analyzes the actions and result elements of transaction specifies messages,
Regula�on level

Regula�on level

Regula�on level

(3) A robot must protect its own existence as long as such protection does not conflict Buchanan et al. (1970) models configures transac�ons,
problem of laws in robots, the second – the problem of Laws by with the First or Second Laws. Laws by Some speculation about 1970 Laws by block increases. analyzes implements
analyzes
etc.
artificial intelligence and
laws by robots and the third – laws on robots. Robots and Robots legal reasoning, Robots • Amount of available data increases as
discovery
privacy barriers decrease. (process) event
(0) A robot may not harm the fundamental values of humanity, or, by inaction, allow McCarty (1977), Reflections model conformance logs
It is possible to conclude that
fundamental values of humanity to come to harm. on Taxman: An Experiment
Transac�ons

enhancement
Transac�ons

Transac�ons

maximization of transaction security

Laws on Laws on in Artificial Intelligence
1977 Laws on means minimization of privacy.
level

level

level

and Legal Reasoning

Positioning of the three main types of process mining: (a)
Robots BUT: what are the fundamental values of human being and humanity? Is it possible to
Robots Stamper (1977), The Artificial intelligence in law: the state of play 2016 (Mills, 2016) Robots discovery, (b) conformance checking, and (c)
LEGOL 1 prototype system However, the obligation of government
standardize and codify them? Who has the power to approve these standards? enhancement (Aalst, et al., 2012)
and language is to ensure both (Privacy Paradox).

Research on artificial intelligence and law is celebrating more than 50 years of development. Academically trained Absolute denial of Electronic Persons right to privacy would allow using full potential of process mining methods and
2 European Parliament resolution of 16 February 2017 with recommendations to the Commission on Civil Law Rules on Robotics attorneys are increasingly being replaced by technology. This process is accelerating exponentially towards the singularity. LegalTech tools for discovery, conformance checking and enhancement of efficient (just) behavior of the electronic persons,
(2015/2103(INL)), general principles (T.)
thus minimizing transaction costs and maximizing the security of these transactions.

Conceptual Regulation Model of Electronic Persons Conceptual failure-free regulation model Project „Integration study of future law, ethics and smart technologies“
Conceptual regulation model of electronic (Project No. 09.3.3-LMT-K-712-01-0173) (Project is executed by Vytautas Magnus University)
persons Conceptual Regulation Model of Electronic Persons Measurement Problem
Level of Fundamental Values of Society 1 One of the main goals of the project is to create a network of students, researchers and scholars within the field of law and to
This model would require an access to unlimited data on improve their qualification competences, as well as to promote the international exchange of scientific ideas through the
How does asset specificity
Pursuit of needs, actions and result elements of every single transaction Are Electronic Persons implementation of interdisciplinary ethics and law research of smart information technologies and robotics. On the basis of
Life Liberty
impact decisions of
This part develops the conceptual regulation model of Happiness block and their chains. rational actors?
/Property Electronic Persons? the exchange, an attempt will be made to create guidelines and models for the legal regulation of future technologies that
Asset Specificity

electronic persons, thus solving the third task of this This, in turn, would require trust-free governance of the What are the factors of would stimulate the development thereof while contributing to public welfare without violating the values of society.
Analyzes / Models What are the factors of asset
Level of Regula�on collected data – a cryptographic governance system, which rationality in this context?
research. Supports /
Controls should be organized both autonomously and in a collective
specificity in this context? In order to achieve its goals, the project seeks to carry out the following tasks:
How to measure and
(distributed) nature, without any point of central control or How to measure and
Laws and Discovery Transac�on diminish the irrationality? 1. to reveal the theoretical provisions and problems of transformations of ethics and law regarding smart information technologies and robotics, as
Regula�ons Legal models single point of failure. diminish it? well as to prepare the research methodology for these problems;
In order to achieve it, the first sub-part explains the Conformance
Enhancement
logs

According to this model, all transaction data would go to the Bounded Ra�onality
conceptual approach to the regulation model of Level of Transac�on trust-free database, where it would be supported and 1 0 1
2. to substantiate the legal regulation guidelines of smart information technologies and robotic law that would increase the welfare of society while
securing its fundamental values;
electronic persons. The second sub-part introduces the Transac�on
Records
transac�ons
controlled by the bias-free software system. Opportunism
3. to prepare the legal and ethical study modules and training guidelines for improving the qualification competences within the areas of smart
measurement problem, which is left for future research. Needs
Changes
(needs,
ac�ons,
Trained within the standards of fundamental values, the technologies and robotics;
Uncertainty

(incen�ves Ac�ons
)
(results) results) system would autonomously discover, check conformance How does uncertainty Could Electronic Persons act
and enhance the legal models to prevent market failures. 4. to promote the international exchange of ideas, scholars and students through implementation of a specialized network of researchers working in
impact decisions of opportunistically? the fields of ethics and law of smart technologies.
Singularity
Then the Law of Electronic Persons would become Electronic Persons?
Bounded
so�ware What are the factors of
system
Ra�onality
Opportunism supports, individualized, constantly learning and adopting to the real What are the factors of opportunism in this context? Contact for details and cooperation:
The research is funded by the European Social
controls, Fund under Measure No. 09.3.3-LMT-K-712
Asset models, time situations on the level of Electronic Persons‘ incentives uncertainty in this context? Dr. Paulius Astromskis "Improvement of the qualification of
Uncertainty
Specificity analyzes (needs), thus ensuring efficient (just) behavior of the How to measure and Vice Dean for Digitization, Faculty of Law researchers through high-level R&D projects"
Transac�on Cost
Electronic Persons. How to measure and diminish it? +370 601 04524 paulius@astromskis.lt
Factors
diminish it? 1
Conceptual Regula�on Model of Electronic Persons

Robophilosophy 2018 / TRANSOR 2018

Robophilosophy 2018 / TRANSOR 2018

Vienna, Austria, February 14-17, 2018