Exclusive: AI tax law forecasting app sets sights on UK market

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23 January 2017

Alarie: expansion to UK logical next step

An artificial intelligence (AI) lawtech start-up which claims its product can predict how courts will rule in tax cases with 90% accuracy, is on course to expand into this country.

Blue J Legal, whose Tax Foresight app uses machine learning and training by tax law academics from the University of Toronto, hopes to exploit the similarity of the tax systems in Canada and England and Wales.

Blue J Legal’s website said the product “helps you to navigate uncertainty when there are competing reasonable arguments” and “analyses fact situations using deep learning, discovering in seconds hidden patterns in the case law”.

It continued: “It provides answers, links to relevant cases, and generates tailored explanations of its analysis”.

Blue J Legal’s chief executive is Benjamin Alarie, a law professor in Toronto who did graduate work at Yale University in the US and is co-author of a leading tax law text. He told Legal Futures that expansion to the UK was “a natural next step, given the consanguinity of the tax systems”.

He went on: “The UK and Canadian tax systems have considerable parallels in the underlying legal concepts.

“As such, it should not be surprising that the technical approach that we have invented and are using in our [product] for predicting Canadian tax law outcomes applies to UK tax law too.”

Mr Alarie enlisted the help of fellow academics and students to program the AI software. The idea was to use digitised judgments on tax law to “identify hidden patterns in volumes of case law” and predict how judges would rule in future cases.

After details of the query are entered, the app produces a probability estimate. The website cautioned the product was “a next generation legal research tool” but should be used by tax professionals only “in combination with their own informed professional judgement “.

However, the company claimed the system was “more than 90% accurate”, adding: “We may consider offering to guarantee a prediction in exchange for a guarantee fee.”

The product would free up tax professionals, it said, enabling them “to spend their time highly productively to provide outstanding advice, including exploring variations on the client’s facts and providing legal risk assessments and sensitivity analyses”.

Blue J Legal said the system reflected the nuances of real-life cases by synthesising “the lessons from a vast body of case law in a manner different from how human lawyers approach the law.

“[It] is useful to the extent that it can bring its special advantages to bear on the problem at hand – predicting how judges will decide new cases. Our experience suggests that it is very good at this.”

The company said it was not trying to replace lawyers and accountants. “[They] are our biggest fans. We are producing tools that make professionals better. Using Tax Foresight, professionals will make fewer mistakes, identify weaknesses in their clients’ cases more quickly, and can do the work necessary to shore up those weaknesses.”

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