The Pandemic Litigation Boom: How AI Is Enabling Lawyers To Be Dispute-Ready
It is a well-known fact that during times of economic downturn, an increase in litigation is almost guaranteed. The number of commercial lawsuits launched in 2008 rose by 10% as a result of the financial crash. The economic fallout of Covid-19 is no exception.
Eleanor Weaver, CEO of Luminance, explains how technology is enabling lawyers to prepare for the increased number of disputes resulting from the pandemic.
Technology, and AI in particular, is playing a critical role in helping businesses to weather the storm posed by an increase in disputes. 2020 was a disruptive year across the board: the pandemic has wreaked untold economic and social havoc, and businesses have also had to contend with issues arising from Brexit, as well as trying to comply with increased regulation across a wide variety of areas. As businesses navigate this challenging climate, restructuring and redundancies have been inevitable, and thus employment-related litigation skyrocketed as employees contested unfair dismissal and unsafe working conditions. And the disputes aren’t just arising from employees: Gallagher’s Business Litigation Index found that almost 60% of UK-based businesses took legal action or threatened to do so against another business last year, either because money was owed, there was an alleged contractual breach or due to infringement on intellectual property.
Legal action looks set to reach record levels across the board, as businesses seek to recoup damages from the pandemic. Just look at the US-based gym chain, LA Fitness, which is suing 11 different insurers for a whopping $500 million on Covid-related losses.
As the volume of disputes intensifies, so does the lawyers’ workload. And the explosion of data in recent years means that investigations can relate to thousands – sometimes hundreds of thousands – of documents. Consequently, preparing for a claim can be incredibly resource and time-intensive for companies, not to mention expensive. When the tobacco manufacturer, Philip Morris, lost its case against Australia’s plain packaging laws in 2017, it was forced to cover the Australian government’s legal fees which totalled $39 million.
Of course, lawyers can’t look through this volume of information manually, and eDiscovery technologies are routinely used throughout investigations. However, with outdated technology, lawyers still run the risk of missing key information needed to help with the case. Although many eDiscovery tools currently on the market save time and resources, the vast majority rely on outdated approaches using pre-programmed rules and keyword searches, many of which are a little more sophisticated than pressing Control-F on your laptop. With simplistic search tools, lawyers could easily miss the smoking gun, with relevant emails or communications often hidden behind colloquial slang or obscurities. And that is before intentional obfuscation of meaning.
AI-powered eDiscovery is transforming this process. In contrast to legacy technologies which are only able to surface results based on specific search terms, AI actually understands essence and context. This means that, should I be looking for an email that relates to Covid-19, the AI could also surface results based on variations of this word like pandemic, virus or Coronavirus, ensuring that nothing is missed. Likewise, once I had found an email that I knew to be critical to the case, AI could instantly show me similar emails related by concept and context, rather than just keywords.
The result is huge time and cost savings, as well as increased efficiency and thoroughness. These outcomes have never been more important for litigators and in-house teams alike. Indeed, a recent study found that the litigation boom is putting a particular strain on in-house counsel who are under pressure to reduce legal spending due to economic uncertainty but are also facing a huge surge in dispute claims. I was recently talking to an in-house lawyer at a well-known DIY superstore. Over the pandemic, consumer action against the company had gone through the roof, just as their in-house legal team had been cut in half. By producing time savings of up to 90%, AI can help in-house teams break the back of their caseloads whilst also keeping costs low.
Crucially, AI can be used for a wide variety of disputes, helping businesses big and small. For instance, AI could be used to analyse hundreds of thousands of documents for a case relating to unsafe working conditions. Take the example of Amazon, which was recently fined $41,000 for failing to record 217 Covid-19 infections among employees at a Rialto facility, and for which the company may well face further claims. At the other end of the spectrum, AI could be used to help a very small business navigate a contractual breach from a supplier.
And, with a recent Norton Rose Fulbright survey finding that nearly 50% of respondents were anticipating a significant rise in pandemic-related disputes in the next two to three years, it has never been more critical for legal teams to adopt the most innovative tech tools out there to support their workflow in light of these predictions.
Covid-related economic uncertainty, and the increase in litigation that comes hand-in-hand with it, will feature heavily for the foreseeable future. The adoption of AI in the legal sphere is critical to enable businesses of all sizes to weather this storm by providing an efficient way to sort through copious amounts of data. This allows businesses to find that needle in a haystack, reach conclusions faster and generate time and resource savings.