Artificial intelligence (AI) technologies are increasingly embedded in critical sectors such as healthcare and finance, raising new challenges for legal accountability. This paper investigates whether current legal frameworks adequately protect users from economic and non-economic harm caused by AI systems. Using doctrinal legal analysis and comparative insights from EU and common law jurisdictions, the study examines tort law, data protection regulations (e.g., GDPR), consumer protection rules, and soft law instruments like ethics charters. Through a critical review of legislation, case law, and regulatory proposals, particularly the EU AI Act—the research reveals significant gaps in assigning liability for AI-related harm. Opaque and autonomous AI decision-making often impedes causation analysis, leaving victims undressed. Existing tort and product liability doctrines fall short of ensuring consumer protection. The paper proposes reforms, including strict liability for high-risk AI, insurance-based compensation schemes, and legal personhood for AI to address these issues.