If your artificial intelligence tools are not litigation ready, then discovery in a lawsuit contesting decisions those tools have made could quickly become a nightmare: Your company may suffer enormous distractions and decreased productivity as it struggles to address litigation requirements that are inconsistent with its AI systems, data and culture; may be subjected to onerous court orders that interfere with its ability to conduct its core businesses; may even suffer adverse judgments on claims that lack merit.
Preparing for disputes is a crucial consideration for any financial services company using AI and big data to make important decisions, such as whether to extend credit to potential borrowers or whether to flag a transaction as posing an anti-money laundering or fraud risk. As every decision-maker knows, once you start making decisions, you cannot please all the people all of time. Thus, litigation over AI decision making is not a question of if, but when.
This article provides a road map for addressing discovery challenges intrinsic to AI, long before any lawsuits are filed, early enough that a thoughtful strategy and modest investment of resources can have a butterfly effect, multiplying to enormous value when disputes later arise.
Below, we first discuss why AI poses unique discovery challenges, different in quantity and quality for those arising from prior disputes over computerized models and decisions. Second, we discuss how savvy plaintiffs lawyers will seek to exploit those challenges to obtain strategic advantages in litigation — particularly in today's world, where some rules governing discovery
and evidence still lag behind technological realities. Third, we set forth practical, actionable steps that financial services companies deploying AI can implement now, to help mitigate serious problems down the road.
We note at the outset that AI is a rapidly developing field and that most litigation over AI has yet to occur. Moreover, judicial efforts to grapple with the unique challenges AI poses are nascent, or even nonexistent. No doubt the future holds surprises. Our experience in other, related litigation contexts informs the article throughout; however, financial services companies will be best served by taking a flexible, nimble approach toward applying the recommendations below.
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