Legal means resulting from artificial intelligence

Posted on Dec 28, 2022 at 10:00 am

1. The “legaltech” approach
Legaltech is the concept we hear the most when it comes to artificial intelligence in law, so before addressing the very principle of legaltech (II.1.2.), we must understand the technologies that surround it (II.1.1.). “Contract analytics” (II.1.3), a subsector of legaltech, is an interesting sector that is evolving but remains more discreet.

1.1 Artificial intelligence technologies in law
Among other things, artificial intelligence is expressed through four technologies (1) in the legal world, including a fifth between AI, linguistics and IT (automatic natural language processing) (2). They consist, first of all, of expert systems, they are tools that reproduce the intellectual capacities of jurists as in the context of contract management software, then big data, bringing together technologies that allow massive data processing and, finally, a set of ” learning” (3) with an initial learning approach that consists of teaching machines, providing them with precise data, to recognize objects, images initially, which are similar in the legal field to jurisprudential decisions. Ultimately, these machines will make autonomous decisions when faced with a dispute. This tool is complemented by deep learning, which goes beyond operating a machine, as it involves providing the tool with a human-like cognitive system so that it can function without human intervention.

1.2 The specificity of legaltechs
Legaltechs are intelligent phenomena that emerged in the French legal field in 2014. They are companies that, by collecting information and, in some cases, using algorithmic systems, offer legal content management tools (document writing, online disputes, legal information, etc.) support (invoicing, accounting) (4) . Starting with categorizing numerous case law, legal texts and doctrines, the activity gradually evolved into online services that produce legal contracts and other documents. Finally, the dynamics was unfolded for a prediction of justice, estimating the chances of success or failure of a case, determining the values ​​of the convictions or even classifying the arguments by relevance and the associated legal texts.
Such automation raises ethical questions, only its accessibility cannot be regretted. People who cannot turn to a professional can see this new approach within reach, proximity, ease and significant economic gains.
On the professional side, companies are also favored by the use of predictive tools in terms of contracts or forms and as for lawyers, they can delegate certain tasks that require human capacity and significant costs for a faster and more economical service.
However, the importance of legaltech in France is overestimated according to Martin Bussy, who reveals that “French legaltech represents only 1.2% of all fundraising for all start-ups in France in 2019” (5). France is, therefore, lagging behind in the sector and “despite the sector’s digital backwardness, there is no catching up in progress, but rather a kind of self-satisfaction based on the few large operations carried out (6) .
In 2021, things have changed anyway, as many law firms use legaltechs on a daily basis, even if they are often the same (Doctrine, Prediction…) and the use of these legaltechs predates the invention of the term (7 ).

1.3 “Contract Review” or Contract Audit
In 2018, LawGeex AI software emerged victorious in a speed and relevance test against 20 highly experienced business law attorneys (8). The test consisted of analyzing the risks and failures present in five non-disclosure agreements. “Contract review” consists of mass analysis of contracts to extract questionable information and clauses or those that need to be reviewed (9). This legal technology subsector is linked to the subsector of “alternative legal process providers” (ALSP, providers of online legal services), partly AI user (in the sense of very recent computational technologies based on NLP and machine learning), it is also the one with the most turnover, even ahead of social security justice. According to a study by Thomson Reuters, the US legal publications group, “legal process providers” earned $13 billion in 2019, compared to $8 billion in 2015 (10).
In France, the French startup Softlaw operates in the audit of mergers and acquisitions contracts and compliance. Hyperlex, on the other hand, is a French company that manages and analyzes contracts for companies, being the project that in the long term, Hyperlex will also do “contract audits” (11).

2 Dispute Resolution Tools
The use of artificial intelligence also finds its diversity at the procedural level, when intervening in conflict resolution. To meet the demand for speed of justice, algorithms are useful to clear the courts and give more life to certain aspects of justice, especially in the field of electronic commerce (12), it is possible to resort to an online mediator, it is also possible to set up negotiation online for simpler or more complex disputes (13).
With regard to online mediation, it is on the other side of the Atlantic that the phenomenon is best known, as it is possible to see it as an almost automated form of online trading, where 80% (14) of cases in the first phase of trade assisted by computer, give rise to a transaction. Another practice is the blind offer (15) which includes offers from each party, none of which knows the content, but is informed that their offer is insufficient for all participants to continue trading until there is a compatible offer for each party. This type of instrument in France could be favored by the law on the reform of justice (16) which establishes the obligation to resort to mediation or conciliation for disputes below 5,000 euros before being able to resort to a judge.
Platforms such as Justice.cool (17) were created precisely to regulate this new form of litigation. They assess the applicants’ situation and legislative provisions and provide them with statistics that will enable them to reach an agreement. However, these mechanisms, although welcome, will come at a cost, given the access to the state judge that is currently free for the litigant (18).

3 The “smart contract” approach
Another tool derived from artificial intelligence is smart contracts, also known as smart contracts. They are based on blockchain functionality. More specifically, these smart contracts are characterized by their automaticity. Indeed, it is a contract that is formed, that lives and that is extinguished if the object of the contract is fulfilled. For example, if there is a smart contract compensating for operational losses of a farmer who would face a drought period, the weather information is transmitted to the related blockchain. Automatically, a conventional compensation will be paid to him based on information collected algorithmically and without human intervention (19).
Innovative tool, but that raises several questions: What is its place in the legislation? What consequences can it have on the legislation in force? What are the consequences for legal actors?
Firstly, the name itself is confusing, it is not a contract itself, but a mechanism that accompanies the contractual phase, self-executing contracts (20). Thus, the regime of article 1101.º is not observed. This leads to general contract law and the observation in the smart contract mechanism of the lack of chance or consent.
It is also important to specify that this type of instrument has the effect of creating an imbalance between the parties and currently only benefits the strong party: in the context of an automatic smart contract based on a lease contract, if the tenant does not pay, the mechanism blocks the front door (21). In addition to the issue of imbalance, this mechanism has another limit, that of interactivity with reality (22). Indeed, when the contract is based on the transaction of an intangible object, this tool can be used for commercial purposes, since the payment of the price of the good will unlock access to the good. However, when it comes to buying a material good, payment, although made through an electronic platform, does not automatically unlock access to the good.
As noted, artificial intelligence delivers many results. It is not possible to see only positive or only negative. It is an innovative technology that allows to lighten the professions, but a balance must be created so that the current legal professions are not impaired in their intellectual and human capacities. Thus, artificial intelligence must remain a performance tool.

Author: Isabelle Eid, Advocate for the Court

  1. E. Barthe, New technologies – The tools of artificial intelligence for French law, La Semaine Juridique General Edition, n° 14, April 8, 2019, doctr. 381
  2. FJ Pansier, iJudge Towards Predictive Justice, Technologies for Predictive Justice
  3. FJ Pansier, iJudge Towards Predictive Justice, Technologies for Predictive Justice
  4. E. Barthe, New technologies – The tools of artificial intelligence for French law, La Semaine Juridique General Edition, n° 14, April 8, 2019, doctr. 381
  5. opinion | French legaltech does not exist (yet), Les Echos, https://www.lesechos.fr/idees-debats/cercle/opinion-la-legaltech-francaise-nexiste-pas-encore-1289888
  6. opinion | French legaltech does not exist (yet), Les Echos, https://www.lesechos.fr/idees-debats/cercle/opinion-la-legaltech-francaise-nexiste-pas-encore-1289888
  7. Artificial Intelligence and the law, behind the hype, the reality https://www.precisement.org/blog/Intelligence-artificelle-en-droit-derriere-la-hype-la-realite.html#nb53
  8. LawGeex achieves 94% accuracy in NDA review versus 85% for human lawyers/ human lawyers
  9. Artificial Intelligence and the law, behind the hype, the reality https://www.precisement.org/blog/Intelligence-artificelle-en-droit-derriere-la-hype-la-realite.html#nb53
  10. Growing ALSP market is becoming less “alternative”, says new report https://www.thomsonreuters.com/en-us/posts/legal/alsp-report-2021/
  11. Artificial Intelligence and the law, behind the hype, the reality https://www.precisement.org/blog/Intelligence-artificelle-en-droit-derriere-la-hype-la-realite.html#nb53
  12. S. Chassagnard-Pinet, The electronic dispute resolution, The law seized by algorithms, Dalloz IP/IT, 2017, p.506
  13. “Resolve your Small Claims disputes efficiently”: Smartsettle
  14. A. Bensamoun, G. Loiseau, Law of artificial intelligence, chap. 7 Artificial intelligence and justice: an interhumanist approach
  15. A. Bensamoun, G. Loiseau, Law of artificial intelligence, chap. 7 Artificial intelligence and justice: an interhumanist approach
  16. Law No. 2019-222 of March 23, 2019 on the 2018-2022 programming and justice reform
  17. https://www.lemondedudroit.fr/professions/337-legaltech/68217-justice-cool-veut-favoriser-developpement-mediation-ligne.html
  18. A. Bensamoun, G. Loiseau, Law of artificial intelligence, chap. 7 Artificial intelligence and justice: an interhumanist approach
  19. G Guerlin, Considerations about smart contracts, The law seized by algorithms, Dalloz IP/IT, 2017, p.512
  20. J. Gossa, Blockchains and smart contracts for lawyers, Dalloz IP/IT 2018. 393
  21. Activity from German startup Slock.it: https://blog.slock.it/blockchains-acquires-slock-it-4b3a0276893d
  22. J. Gossa, Blockchains and smart contracts for lawyers, Dalloz IP/IT 2018. 393

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