About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Automation has never been just about blue collar workers. In the 20th century, as electric power transformed manufacturing and tractors changed farming, engineers and bureaucrats grappled with newfangled slide rules and typewriters.

In the 21st century, as Amazon disrupted retail and Uber challenged the taxi industry, Salesforce, Oracle and Google streamlined, accelerated and transformed the lives of office workers.

In 2019, the next big round of automation will be in the legal sector, with apps and web-based services replacing a visit to a local solicitor’s firm for many straightforward legal problems.

A smartphone app shows the scales of justice and a loading bar

AI in law is already happening

The law is not just a crucial part of a stable democracy, it’s a multi-billion pound business. And even though every country has its own laws, it’s an export business too. The law of England and Wales, along with the judges, solicitors, barristers and paralegals who work on it, serves clients all around the world.

Some legal firms have experimented with automating processes, particularly in commercial law. For example, artificial intelligences have already shown themselves to be better than human lawyers at checking contracts for potential flaws.

Some simple tasks more visible to consumers are handled by technology too. Dispute resolution on online marketplaces like eBay, which generally follows a defined, structured process, is handled through automated processes. Over 60 million disputes are resolved by eBay alone every year, more than the entire legal system of England and Wales.

But the potential for the use of new machine learning technologies in law is far broader than these niche uses. Today, small businesses and individuals often steer clear of legal processes. They’re too expensive, too time consuming or too bureaucratic. As a result, money is left unclaimed, shoddy work left unpunished, and injustices left to fester.

Low-cost, AI-driven legal services could radically open up access to the legal system for people and companies who are currently excluded. People could reclaim their unpaid invoices, get a refund from a dodgy builder or take a workplace bully to an employment tribunal at a fraction of the current cost. All of these are potentially life-changing problems, yet many face financial, time or knowledge barriers when accessing them. Lawtech has the potential to change lives - not just by cutting back the cost of the law, but by broadening its reach at the same time.

There are already promising early movers in this sector: DoNotPay is a Facebook Messenger bot that helps people challenge parking fines, gain compensation for delayed flights or apply for asylum, among other tasks. California startup HelpSelfLegal automates simple legal tasks like clearing marijuana convictions or taking out restraining orders. Legal Utopia helps consumers understand legal problems by explaining their issue in plain language, without jargon.

Utopian visions don’t tell the whole story

What happened when written communication became cheap - falling from the price of a stamp to the cost of a few electrons and access to a computer? From occasional junk mailings we went to a daily avalanche of spam that fills our inboxes and phones. And more than that: the toxic social media culture of abuse ultimately comes from the anonymity and security of free communication. When speech is free, all speech flourishes, including hate speech.

So there’s another, less palatable future that lawtech could enable: the silencing of #MeToo activists with an avalanche of libel lawsuits; honest tradesmen ripped off by an automatic lawsuit over every invoice; online bullies spinning up endless court cases against their enemies in order to intimidate them into submission; patent trolls automating their hunt for genuinely innovative companies to exploit.

Fortunately, the law is highly regulated. The courts are government institutions; and while solicitors, barristers and law firms are not part of the government, they are tightly controlled. Significant changes in how the law works can’t happen by accident. The more alarming futures that legal AI could bring are unlikely to become reality unless some seriously bad decisions are made.

That’s why Nesta will be working with the Solicitors Regulation Authority in the coming year to explore the issues that surround AI in law - and to ensure that good decisions are made. At the heart of the programme, which is supported by the government’s Regulators’ Pioneer Fund, will be a challenge prize, in which we will identify, nurture, support and reward the best lawtech startups.

How should innovative AI-driven legal services be regulated, in a way which improves access to the law and doesn’t put the vulnerable at risk? In 2019, we’ll find out.

Olivier Usher is Research Manager for Technology & Innovation in the Challenge Prize Centre.

Chris Gorst leads on challenge prizes designed to stimulate and accelerate fintech and data-driven innovations.