Long Read: Artificially Intelligent

Gateley Legal’s Senior Associate Edmund Locock and Trainee Solicitor Ann-Marie Henry consider the ways in which AI is already introducing misinformation into legal proceedings. 

Love it or hate it, the use of Artificial Intelligence, more commonly known as “AI”, is everywhere. The UK is the third largest AI market in the world and the everyday use of AI, both professionally and personally, is continuing to grow. 

AI brings with it some wonderful and commercially welcomed advantages. AI can increase productivity and drive growth by its succinct ability to assess risk, draft documents and deliver competent solutions. It can also reduce operational costs for many businesses. By automating time‑intensive tasks and minimising human error AI can “free up” time for us non-bots to spend on higher value tasks. 

Lauding the benefits of AI, however, is perhaps something best left to more optimistic writers [and future issues of Leasing World]. Instead, this article will discuss how some customers and personal guarantors are utilising AI to correspond, complain and sometimes litigate against lessors.

Complaints

AI is (for better or worse) easily accessible to anyone with a computer or phone and, consequently, a pattern is emerging of reliance on AI in the preparation and pursuit of complaints. 

When used correctly, AI can have a positive effect on the complaint process. It can be used by complainants, in part and in full, to prepare correspondence, draft complaints, structure arguments, and reference regulatory frameworks. AI can help non-sophisticated complainants articulate their complaint into a coherent and well-structured submission and can assist with language barriers and the use of industry specific terminology.

However, as with most technical tools, AI must be used with caution. When misused, AI can hinder and obscure the complaints process by producing reams of factually and legally inaccurate arguments, which can misinform, misadvise, and artificially embolden complainants. 

Always remember that AI is a sycophant: it won’t disagree with you unless you tell it to. But AI platforms are also prone to “hallucinations” – fabricating, misquoting and misunderstanding content – resulting in factually and/or legally incorrect output. 

AI often also generates excessive and unfocused submissions. This can make a complaint less authentic and cause difficulties for the respondent. A complaint that is obscured by irrelevant and unnecessary arguments may, as a result, cause the respondent to misunderstand the nature of the complaint and delay determination. 

Time is Money

Within seconds of receiving a prompt, AI platforms will deliver a verbose and lengthy response which is having a significant impact in practice, especially with regards to lessors’ time and costs. 

Nebulous correspondence often obscures, rather than clarifies, the issues in dispute as the lessor (or their solicitors) then spends more time deciphering it to identify the issue(s) that need to be addressed. From both an operational and a legal perspective, this can have a significant cost consequence.  

We are noticing an emerging pattern of fast-paced, successive exchanges of repeated communications from customers and personal guarantors when disputing liability under terminated asset finance products. 

The issue here is twofold. Firstly, it is highly unlikely that the “writer” (customer/personal guarantor) has fully checked or properly understands the correspondence being sent in their name. They are simply feeding lessors correspondence into an AI platform and instructing it to argue in the alternative. Secondly, lessors are encountering increasing time-costs in having to review and respond to these vast swathes of correspondence.

Litigation 

The use of AI in legal proceedings is a hot-button topic, and there have been several recent instances of litigants (and their solicitors) being caught-out when AI has been used to draft submissions and simply “hallucinates” (read: makes up) authority in support of its position.

Anecdotally, AI is currently and increasingly being utilised by customers and/or personal guarantors to defend – and in some cases issue – proceedings. Only time will tell how the system adapts to meet the burden and risks of AI-generated litigation, and how it will treat litigants in person who opt to allow AI to issue or defend proceedings on their behalf.

As we look to the future, the accessibility of AI may mean that consumers are more likely to pursue complaints and litigation against lessors, comfortable in the idea that AI is freely available to assist.

This will result in an escalation of complaints to formal disputes, and fuel an increase in the number of referrals to regulatory bodies. 

AI is fundamentally reshaping the leasing and asset finance sector. For lenders, brokers and finance houses operating in regulated and unregulated environments, this transformation presents both strategic opportunities and emerging resource risks. 

by Gateley Legal Senior Associate Edmund Locock and Trainee Solicitor Ann-Marie Henry.

[This is an edited and shortened version of the full-length article first published in Leasing World issue 221]

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