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4 Jul 2022

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Increasing use of AI boosts digital economies, but also leads to more lawsuits

Digital infrastructures are increasingly using artificial intelligence and machine learning to streamline and optimize operations and maintenance. Meanwhile, litigation is also increasing as a result of the use of AI.

That is one of the conclusions of a report by the international law firm CMS. According to the report nearly seven in ten (69%) the surveyed corporate lawyers and risk managers believe that new technologies, like artificial intelligence (AI), will have an increasing impact on their organizations in the next few years. A majority of respondents (56%) expect the use of AI to increase disputes, and half believe that these disputes will be unforeseeable.

This is evident from the report Technology Transformation: Managing Risks in a Changing Landscape by international law firm CMS. Approximately 500 corporate lawyers and risk managers from around the world were surveyed for the report.

According to the report, companies investing in new technology in a hurry can lose sight of risk management. Legal teams must prepare for a future where a quick, informed response to mounting technology risks is the norm.

The causes of litigation that we can expect in the next three years are different from what we have seen in the past three years. In the past three years, respondents identified compliance and regulatory issues (65%), performance or service levels of IT vendors and outsourcing partners (61%) and intellectual property and trade secrets (52%) as major concerns. According to the report, disputes over the next three years will mainly arise from intellectual property and trade secret issues (62%), use of AI (56%), smart contracts (55%), cryptocurrencies (52%), and cloud services (51%).

According to the report, companies that embrace technology expect positive results in terms of efficiency and competitive advantage. Technology can only be fully utilized if companies have the knowledge and skills to deploy, maintain, and improve it. Managing risk involves safeguarding knowledge about, for example, artificial intelligence or blockchain. The companies that invest in their employees by acquiring the right knowledge and skills have an advantage.

A majority of respondents (57%) believe that disputes arising from new technologies can only be resolved through a new dispute resolution process, while only a third (34%) believe that AI disputes are resolved using the same principles as those arising from traditional technologies. The current form of dispute resolution may not be suitable for future disputes regarding new technology, and there may be doubts about its effectiveness. Multi-vendor, cloud, and platform transactions are likely to increase. The use of artificial intelligence (AI) as a method of resolving disputes could become a logical approach.

Photo credit: Cytonn Photography

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