Costs Lawyers will have more strategic role in litigation in the ChatGPT world, says High Court judge

25 October 2023

The emergence of artificial intelligence (AI) like ChatGPT is likely to push Costs Lawyers towards giving clients “strategic advice” rather than handling the nuts and bolts of costs, Mrs Justice Joanna Smith told the ACL London Conference last week.

The High Court judge – who was a member of the Civil Justice Council’s costs review – said AI could reduce the need for detailed assessments significantly.

“Many of the tasks undertaken by Costs Lawyers involve crunching data and transposing data from one form to another. No doubt you will all spend time drafting bills of costs and costs budgets. But these are exactly the sort of tasks that could be undertaken using a specialist AI, appropriately trained on rules and precedents in the costs domain.

“Indeed, the arena of costs management over the course of litigation would appear to be obviously suited to the use of new technology. Commentators who know a great deal more about this subject than I do have suggested that costs management systems could be embedded into case management systems, making accurate real-time costs management an achievable objective and ensuring that legal teams are alerted to cost overruns almost immediately.

“It has also been suggested that, properly instructed, AI could suggest changes to budgets as they are drafted, informed by the mining of information about cases with similar characteristics.”

Citing the comments of the Senior Costs Judge, Andrew Gordon-Saker, Dame Joanna said innovations of this type could even render detailed assessment unnecessary save in respect of discrete points, perhaps requiring evidence or detailed arguments about the retainer.

“Questions of reasonableness and proportionality might even be capable of being dealt with by an algorithm, at least in simple cases.”

But she argued that the increasing use of AI would not deprive Costs Lawyers of work, “although I do think that there will be a real imperative to find new ways to add value, including, perhaps, learning new IT skills; a combination of legal and technical expertise seems likely to prove attractive in this brave new world”.

Costs Lawyers would be needed first to supervise the AI, especially in its early days, “ensuring the input of accurate information (including any changes to relevant rules and guidance that the AI needs to take into account) and monitoring output, including authenticating that output”.

“On top of that, and much more interesting, is the role that Costs Lawyers have always played to a greater or lesser degree in delivering strategic advice to clients. This is a role that I believe to be increasingly important as the costs of litigation continue to rise.”

The increased focus on costs brought about by costs budgeting “can only be a good thing for Costs Lawyers, who can clearly add significant value to clients in the development of high-level litigation strategy, including by the application of a cost-benefit type analysis at an early stage in the litigation process”.

Dame Joanna added: “Additionally, there is plainly scope for Costs Lawyers to become involved in negotiations (particularly where costs are a potential obstacle to settlement). This is likely to involve offering effective ADR, including mediation in disputes over costs.”

More broadly, she stressed that AI was “a tool to be used to enhance human reasoning capabilities rather than replacing them”.

While there were still several issues with AI, “refuseniks should be under no illusions – ways will soon be found to mitigate and work around these problems, even if they cannot be eradicated”.

She warned: “The increasing understanding and use of specialist legal AI tools, together with the development of appropriate regulations and safeguards, is likely, in my view, to herald greater efficiencies in litigation and the very substantial reduction in costs, leading, it is to be hoped, to much improved access to justice.”

To read the full speech, click here.

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25 Oct 2023

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