Are You Liable? Safeguards To Consider When Creating An App.

 Imagine, your very elderly neighbour has gone for her regular early walk on a crisp, spring morning. She’s fairly tech savvy and has her mobile with her that has a safety app with a GPS locater and an emergency button. She’s also listening to her favourite radio program on her mobile. Her ankle rolls underneath her when she is strolling in the park and she falls and gravely injures herself. The alarm button gets pressed, but the GPS locator isn’t working.  The poor lady is lying by herself for at least 30 minutes until someone finds her. Who is at fault in this instance? Is it the company that created the safety app? The radio station that made the radio app? The developers of the safety app? The mobile phone manufacturers or the network? No one really knows.
The global app economy has grown from $1.9B in 2008 to $143 B in 2016.*  In Australia 85% of smartphone usage is in-app*.  As the market continues to grow, technology evolves and things like augmented reality and the IOT expand, there is no doubt that issues of liability are going to become increasingly important for both app owners and developers.

One area of particular concern is that of Mobile Medical Apps (MMAs). These apps are a conglomerate of general wellness, health apps, and medical devices and applications that diagnose and treat. They collectively form one of the largest app categories.

The expansion of this category is highlighted with the launch of another online GP clinic in Australia accessed via mobile app. It is part of a new era in telehealth care. For those in remote areas, the elderly and immobile or those who simply don’t want the hassle of having to turn up at the GP clinic and sit and wait, it is proving to be very worthwhile.  Patients can have a video conference with a GP, where they can connect their blood pressure device to their mobile, take their temperature with a digital thermometer and even diagnose skin cancers. With these exciting developments in telemedicine come increasing questions about liability.

In the United States MMAs have recently come under the regulation of the Federal Drug Administration.  In Australia we have had fairly clear guidance since 2013 as to which MMAs and devices fall under our own version of this- the Therapeutic Goods Administration (TGA). Currently, health apps do not come under the TGA. By definition, these are any apps that relate to overall health and wellbeing. They are non-invasive and usually involve some form of monitoring.  Medical apps that act as diagnostic tools or provide treatment advice and usually involve some form of sensor application do. At this time, there are twenty-two apps listed under this category on the Australian Register for Therapeutic Goods*. This is relatively low and thus, questions of liability remain untested. There is also still some vagueness as to who is liable when a wellness or health app presently outside the realm of the TGA, fails to monitor accurately and therefore the person may be suffering from a health risk.

There are many other questions also that remain unanswered. For example, where exactly do faulty mobile apps, mobile devices and associated accessories for these apps fit in current Australian law?

Who’s directly responsible for an app not operating as they were designed to? App owners, developers, or other third parties involved with creating the app?  Will legally drafted waivers and terms and conditions of use suffice in court to protect businesses from being prosecuted?

Here is a list of some considerations for app owners and app manufactures to take into account in terms of safeguarding themselves against liability claims.

  • Be aware of all current and planned legislation pertaining to your app or device and try to future-proof yourself. This includes looking at both tech. industry relevant legislation and category legislation. For example, if your mobile app has something to do with the building industry, there may be particular legislation pertaining to the building industry as well as legislation relevant to apps and devices in general.
  • Conduct a risk analysis of all that could go wrong when using the app and ensure warnings, terms and conditions of use and insurance policies cover that.
  • Developers and other third party suppliers in particular, may want to ensure they have adequate product warnings. These are usually the domain of the app business owner but all parties need to implement adequate coverage as well. It’s surmised by the legal profession that responsibility for any legal liability claims may well be shared between app owner and developer and other responsible third parties.*
  • You simply cannot foresee every area that you may be vulnerable in. No one really knows how technology will be adopted. The criminals lurking in an alleyway to rob unsuspecting Pokemon Go players is an example of that. Work with your insurer to have very generic and all inclusive wording of your Errors and Omissions.  Ensure blanket cover of things like bodily harm, property damage, user generated content and breach of civil or contract liability.
  • No matter how small your business, pay the money for comprehensive insurance immediately as apps can grow exponentially very rapidly.

From an industry perspective, this area is very grey in Australia.   It will most probably take an inciting incident for any gaps in current legislation or insurance coverage to appear. If this occurs, we will have no control over the regulations, controls and repercussions. As a preventative,  it is important that we self-regulate to some extent. A few precautions now, will ensure that we can continue to grow, innovate and provide sometimes life changing apps and mobile devices. This is a much better alternative than waiting to be constrained by suffocating legislation that may restrict innovation and growth.


*The App association, State of the app Economy, 4th Ed

*Nielsen data 2015

*The Rise of Smartphone Medical Apps., Australian Life Scientist, Vol 10, Issue 2

*Australian Register of Therapeutic Goods

*IOT things- Dibbs Barker