Law firms have been warned of potential negligence claims arising from the use of AI-generated content. A leading law firm, Kennedys, advised that law firms must implement safeguards, including human oversight, when relying on AI-generated content to authenticate its accuracy. Failure to do so could lead to an increased exposure to professional indemnity claims.
The introduction of generative AI has the potential to revolutionize the legal industry by improving efficiency and reducing costs. However, Kennedys highlighted the significant risks associated with using AI tools, particularly in their early stages of development. When lawyers rely on open AI platforms that extract data from unverified sources, the risks are magnified.
Kennedys also noted that the COVID-19 pandemic had resulted in a surge in the number of wills being made, leading to a disproportionately high number of notifications to professional indemnity insurers. The inherent difficulties in taking instructions during lockdown triggered this increase. Kennedys described 2023 as a year for claims by disappointed beneficiaries due to the challenges faced during the pandemic.
Furthermore, Kennedys warned that post-pandemic working conditions have created a perfect storm for pure process error claims against law firms. Junior lawyers, especially those at smaller firms, face increasing workloads and pressure to meet financial targets while receiving less supervision due to hybrid working patterns. This has contributed to claims arising from missed court deadlines, delays in registering documents, and failure to progress cases and transactions.
Environmental, social, and governance (ESG) issues are also expected to generate claims against law firms. Lawyers may face claims for breaching their duty to warn clients about potential climate risks, particularly in property transactions involving the risk of flooding. Claims may also arise from advising clients on achieving B Corp status, a certification for companies focusing on high ESG performance, and providing guidance on corporate governance issues.
Law firms specializing in conveyancing are identified as particularly vulnerable to cyber attacks, including phishing and business email compromise. The risk of these types of attacks increases during periods of high time and resource pressures, leading to a breakdown of organizational controls. The rise in remote working practices and the lack of multi-factor authentication further heightens the risk of complex cyber attacks like ransomware.
Additionally, Kennedys highlighted the dilemma faced by media and defamation lawyers when dealing with strategic lawsuits against public participation (SLAPPs). Balancing their clients’ need for swift action to block publication with the risk of being reported to the Solicitors Regulation Authority for bringing a SLAPP creates an invidious position for these lawyers.
In conclusion, law firms must be aware of the potential negligence claims that could arise from using AI-generated content. Implementing safeguards and human oversight is crucial to authenticate the accuracy of such content and protect against professional indemnity claims. The COVID-19 pandemic has also raised challenges and increased the likelihood of claims, particularly from disappointed beneficiaries and due to pure process errors. Law firms should be prepared for claims related to ESG issues, cyber attacks, and strategic lawsuits against public participation. Staying vigilant, implementing necessary precautions, and seeking guidance from legal experts will be essential for future success.
