AI: GCs are worried
Senior in-house lawyers and general counsel are most concerned about an increase in disputes relating to artificial intelligence (AI), a report has found.
Researchers also found that merits now trumps cost as the key factor in determining whether companies pursue litigation.
They said AI had pushed intellectual property into second place as the most likely source of disputes involving their companies over the next three years, followed by class actions and breach of contract cases.
Within AI-related disputes, GCs were most concerned by the risk of employment disputes resulting from the impact of AI on jobs and roles, and discrimination claims resulting from AI-powered decision making.
These were followed by contractual disputes over AI services, privacy or data protection claims resulting from AI data processing, and IP infringement claims following employee use of generative AI.
Researchers said businesses continued to view AI as “both a gateway to efficiency savings and a litigation minefield”.
National law firm Shoosmiths spoke to 360 GCs and senior lawyers based in the UK, and in companies with revenues over £100m, for the Litigation Risk 2026 [1] report.
Regulatory disputes were the most common type of dispute that companies had been involved in over the past year, followed by employment and competition.
When it came to the top factors determining whether a claim was pursued, researchers said cost had fallen from first to fifth place.
GCs are now most concerned by the ‘legal merit of the case’ (cited by 68%), followed by the ‘potential damage to our reputation’ and the ‘expected duration’ of a case.
A majority (57%) put the ‘expected value’ of the claim in fourth place, but the cost of pursuing the litigation was cited by a minority (47%).
Shoosmiths found that, while proactively bringing claims for financial gain “remains largely untapped territory for most companies”, one in five said they have pursued disputes primarily to raise funds – with group litigation/class actions and intellectual property the areas where they were most likely to use third-party funding.
The majority of businesses have increased spending to support their in-house teams in managing disputes, with more than seven in 10 GCs predicting higher headcounts and spending on litigation over the next three years.
On measures to reduce litigation risks, 59% of in-house lawyers had implemented document retention policies, half “conducted a litigation/compliance preparedness review”, while 47% had provided internal training on specific litigation risks.
Almost half of in-house lawyers, 43%, had implemented restrictions on the use of generative AI, while 28% had banned WhatsApp for company business.
Researchers recommended that firms conduct a “litigation preparedness review” to highlight areas of potential exposure and “inform mitigation and response planning”.
They should “integrate the business’s use of AI across that exercise to sense check reliance on AI outputs and fully understand associated weaknesses”.
When it came to using AI to help manage dispute resolution, three quarters of companies were using it in e-discovery, 45% for horizon scanning, 37% to identify opportunities for claims against others and 35% to identify litigation risks.