Third Party Funding: Can AI Help?

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Recently Alan Freeman wrote about the use of artificial intelligence in third party funding of litigation, in his article “Intelligent Funding: Could AI Drive the Future of Litigation Finance”. Litigation funding, also known as third party funding, provides financing to plaintiffs and law firms to enable them to pursue their claims in return for a piece of the recovery.

For a court to approve a third party funding agreement, the party must show that (a) the agreement is necessary to provide access to justice, (b) that access to justice is facilitated by the third party funding agreement in a meaningful way, (c) the agreement is fair and reasonable by enabling access to justice while protecting the interests of the defendants, (d) the third party funder is not over-compensated, and (e) the third party funder is not interfering with the solicitor-client relationship, including the duty of loyalty.  Typically in class action law suits the third party funder takes about 10% or less of the recovery. (Houle v St. Jude Medical Inc., 2018 ONSC 6352 at paras 34, 63-64)

Through applying artificial intelligence to thousands of cases, third party funders may be able to better determine which cases to “bet” on. Freeman writes that by using artificial intelligence programs, like Blue J Legal, third party funders may be able to determine the likely outcome of a case. He further quotes Professor Alarie (also a founder of Blue J Legal) that using artificial intelligence programs may become common place for third party funders.

I also predict that predictive programs will become more prevalent in the law. However, as long as humans are the judges, artificial intelligence programs will have its limitations in predicting the outcome of cases. There are many influencing factors beyond precedent in deciding a case. The evidence that is admitted and how witnesses are perceived also play a major role in the outcome of the case.

Additionally, there are opportunities for artificial intelligence programs to make mistakes. In the New Yorker article The Hidden Costs of Automated Thinking, Jonathan Zittrain writes that machine learning systems (subset of artificial intelligence) can be tricked into making inaccurate judgments. “Seduced by the predictive power of such systems, we may stand down the human judges whom they promise to replace. But they will remain susceptible to hijacking—and we will have no easy process for validating the answers they continue to produce.”

(This article was originally posted on slaw.ca. Views are my own and do not reflect the views of any organization.)

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Cost Award from Blogging: Blake v Blake

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If you or your firm blogs about a court decision, then the court will infer that you knew about the case.

In Blake v. Blake, 2019 ONSC 4062, Justice Daley wrote about the consequences of blogging about a case but failing to bring that case to the court’s attention.  Counsel for the respondent blogged about a leading case, but did not tell the court about it. Instead, through research of his own, Justice Daley found the leading case and then found the firm blog post on it. As a result, Justice Daley awarded substantial indemnity costs against the respondents.

At paragraph 13, Justice Daley writes that “The conduct of counsel for the respondents gives rise to some very serious concerns regarding counsel’s understanding and recognition of his duty as an officer of the court and his duty of candor with counsel opposite.”

[22]      In the course of considering the law in this area, while my decision was under reserve, an estates litigation blog commentary dated November 16, 2018, also came to my attention entitled “Is a Notice of Objection to Accounts Subject to a Limitation Period?”

[23]      It is most noteworthy that this blog was written by solicitor Charles Wagner on behalf of his law firm Wagner Sidlofsky. This is the one and the same law firm that the respondents’ counsel practices with. This is a small specialized firm practicing in the area of estate litigation.

Justice Daley concluded that counsel for the respondent knew about the case and failed to bring it to his attention. By failing to bring the decision to the attention of the court, Justice Daley held that counsel misled the court.

At paragraphs 31-32, Justice Daley writes: “… while a lawyer does not need to assist an adversary and is permitted to be silent on certain matters, they are not permitted to actively mislead the court.” Counsel are also not permitted to be ignorant of the law. “Thus, while this may not amount to a deliberate misrepresentation, counsel nevertheless may be found to be in breach of their duty to the court for failing to have conducted reasonable research as to relevant authorities.”

The moral of the story is that counsel has a duty to bring to the court’s attention leading, relevant cases, even if it is contrary to their position.

(Views are my own and do not reflect the views of any organization.)

 

Analyzing Court Decisions According to Judges

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“Law is reason free from passion.” – Aristotle

As a precedent based system, law lends itself nicely to predictive analytics. In predictive analytics, historical data is used to build a mathematical model. This model can then be used to predict what will happen next.

As case law becomes easier to access, many companies are developing predictive analytic tools based on case law. Predictive analytics can be focused on different areas of law. For example, predicting the outcomes of cases in employment, tax, insurance, or family law. Another area predictive analytics can be focused on are on the actors. For example, predicting how judges decide cases, how successful lawyers tend to be in court, and the success of repeat litigants.

Recently, France has banned a type of predictive analytics. Article 33 of the Justice Reform Act bans individuals or companies from publicly revealing the patterns of judges’ decisions. Anyone breaking this rule can face a penalty of five years in prison.

Theoretically, it should not matter who hears a case. The law is to be applied the same way. But by banning this type of predictive analytics, France is recognizing that sometimes the judge’s identity makes all the difference.  How do we reconcile identity with a precedent based system?

(Originally posted on slaw.ca. Views are my own and do not represent the views of any organization.)

In Praise of the Honourable Justice Clement Gascon

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Recently, the Honourable Justice Clement Gascon of the Supreme Court of Canada addressed his momentary absence from work on May 8th, 2019.

For over twenty years, I have been dealing with a sometimes insidious illness: depression and anxiety disorders. This is an illness that can be treated and controlled, some days better than others. On the afternoon of Wednesday, May 8, affected both by the recent announcement of a difficult and heart-rending career decision and by a change in medication, I conducted myself in an unprecedented and unaccustomed manner by going out without warning and remaining out of touch for several hours. I can neither explain nor justify what I understand to have been a panic attack, and I wish to apologize most profusely to all those who suffered as a result. This health issue has been taken care of and treated with the necessary medical support. I confirm that I am in good health, and am fully capable of performing my duties as a judge.

Justice Gascon’s remarks are laudable. By being open about his personal health, Justice Gascon has reduced the stigma in our profession around discussing depression and anxiety. Two illnesses which affect many lawyers.

In the CBC article, titled “Successful lawyers more likely to experience mental health problems, Toronto study finds”, the writers note that a University of Toronto study compared two national surveys of thousands of lawyers in both Canada and the United States. “In both countries, researchers found a strong correlation between signs of depression and traditional markers of career success. Lawyers holding down jobs at large firms in the private sector, widely considered to be the most prestigious roles, were most likely to experience depressive symptoms.” The larger the firm, the more lucrative the position, the higher the odds that the lawyer suffered from depressive symptoms. This was partly attributed to the skewed work-life balance at larger firms.

Similarly in the New York Times article, The Lawyer, The Addict, Eilene Zimmerman, discusses the plight of lawyers. Her ex-husband’s death from a drug overdose happened, despite (maybe because of) his success as an intellectual property lawyer in Silicon Valley.

Zimmerman indicates that the heavy stress on him and the pressure to compete, meet client demands, gain clients, all contributed to his drug abuse. “The history on his cellphone shows the last call he ever made was for work. Peter, vomiting, unable to sit up, slipping in and out of consciousness, had managed, somehow, to dial into a conference call.”

Peter’s struggle is not unique. Zimmerman highlights a 2016 report from the Hazelden Betty Ford Foundation and the American Bar Association on substance abuse amongst lawyers. “Over all, the results showed that about 21 percent of lawyers qualify as problem drinkers, while 28 percent struggle with mild or more serious depression and 19 percent struggle with anxiety.”

Professional stress contributes to the rates of substance abuse amongst lawyers. The adversarial process of the opposing side constantly trying to “undo your work” only adds to the stress.

Despite the prevalence of anxiety and depression amongst lawyers, there is a culture of silence. Professor Daniel Angres states in the New York Times article that “Law firms have a culture of keeping things underground, a conspiracy of silence,” he said. “There is a desire not to embarrass people, and as long as they are performing, it’s easier to just avoid it.”

What’s even more troubling is that that the deterioration of lawyers’ health often begins in law school. Zimmerman points out that law students tend to shift their focus in law school. They shift their focus from the value of helping people to extrinsic factors. These extrinsic factors include: grades, honours and potential career income. However, the value of grades, honours, and income have little influence on a lawyer’s overall mental health. In response, law schools are starting to address improving the mental health of their students.

Similarly, as a profession, we are just beginning to break down the “conspiracy of silence” around mental health. I admire Justice Gascon in contributing to the dismantling of this deadly silence.

(Views are my own own and do not reflect the views of any organization. This article was originally posted on slaw.ca.)

Are the Big 4 Accounting Firms Poised to Dominate Law?

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In Tomorrow’s Lawyers, Richard Susskind predicts that the Big Four Accounting Firms would overtake law firms in the years to come. Susskind explains that the accounting firms were forced to deal with disruption earlier than law firms. In the course of adapting to the disruption, the large accounting firms became more streamlined and became more creative in packaging services. As a result, Susskind predicts that the accounting firms would first begin to dominate law firms by eating into more routine legal work.

Yet again, Susskind’s predictions were correct. It was recently announced that Ernst & Young would be buying a legal managed services business from Thomson Reuters, named Pangea3. The company focuses on document review, contract review, financial trade documentation, and regulatory change management.

As technology improves and more legal service providers enter the picture, it begs the question: “will lawyers be forced to end their monopoly on providing legal services?” I think so.

In the Vancouver Sun, Ian Mulgrew discusses this question, and quotes Profession Gillian Hadfield. Hadfield states that the solution to making justice more affordable is to change the regulations. Hadfield argues that law should be a team sport like medical care. Medical care is provided by a “wide variety of medical professionals: nurses, radiologic technologists, pharmacists. The law should be too.”

Hadfield further argues that “Any solution that makes a dent in the problem will also have to involve expanding the types of people and organizations that are authorized to provide legal help. … [I]t is a major mistake for the legal profession to focus exclusively on how to solve the access problem with more money — public or charitable money — and volunteer pro bono efforts alone.”

As the legal market faces more competition from technology and accounting firms, law societies will be forced to confront who and what types of organizations should be regulated.
(Views are my own and do not reflect the views of any organization. This article was originally posted on slaw.ca.)

Law Depot: A Great New Legal Product

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Through the Toronto Public Library, you can now access a licence to use Law Depot. Law Depot is an online program that allows you to create a free will, employment contract, marital contract, and so much more in a matter of minutes. I recently used it and was very impressed with how easy the program was to use.

For example, to create a will, you answer a few simple questions and the document is formed. It is a great alternative to creating simple documents without a lawyer. However, I note that the employment contact template may be inaccurate.

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I see this type of technology expanding beyond contracts and into pleadings. I could even see the government, eventually having their court forms accessible in a similar way to Law Depot. For example, the user answers a few questions and then the document is created, (e.g. an affidavit, a statement of claim, or a notice of motion). Once the document is populated, it can be filed into an electronic court case.

(This is not a sponsored post. Views are my own and do not represent the views of any organization.)

Celebrating the Everyday Lawyer

 

Benchmark Litigation recently posted this list of the top trial lawyers in Canada.

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Twitter was abuzz. Many people questioned the selection of the lawyers. Not over competence. The lawyers selected are all outstanding trial lawyers. But whether a list composed of almost all white men was truly representative and unbiased. IMG_7671IMG_7672.jpgIMG_7673.jpg

In the journal article, “Why Women: Judging Transnational Courts and Tribunals” by Kathryn Stanchi and Bridget J. Crawford, diversity on the Bench is discussed.  In the article, Stanchi and Crawford comment on the selection criteria of judges. They comment that the selection process is tainted by elitism and bias. Their comments about the selection of judges can be applied to the selection of lawyers for awards. In the article, the authors write that:

Federal judges, for example, tend to be chosen from prestigious clerkships and big corporate law firms, two professional enclaves that tend to favor white, wealthy and male candidates. The more than 1300 sitting federal judges overwhelmingly attended Harvard (140 judges) and other elite law schools. These elite law schools – including Yale, Columbia, Stanford, Berkeley, NYU – tend to skew white and wealthy… Every step leading up to that first appointment to the bench – from academic indicators to standardized testing and beyond – embeds race, class and gender bias…

While calling for more “women” in the judiciary may yield a short-term gain, the real work lies in broadening the definition of who is “qualified” to be a judge. That requires open acknowledgment of the biases inherent in the admissions processes that lead to judicial positions: elite law schools, clerkships, prestigious law firms and other gate-keepers. Otherwise, the effort will yield only female judges who “are able to construct a biography that somewhat approximates the male biography…

Why did we think that women would transform institutions without simultaneously — or alternatively — being transformed by them? Why did we believe that women appointed to positions of power would be ‘representative’ of women as a group, rather than being those who most resemble the traditional incumbents and are thus considered least likely to disturb the status quo?” Catharine MacKinnon has long observed that the women who benefit from feminism’s emphasis on formal equality are “mostly women who have been able to construct a biography that somewhat approximates the male norm . . .. They are the qualified, the least of sex discrimination’s victims.”

Stanchi and Crawford recommend that to improve diversity on the bench we should consider people who have faced “discrimination based on race, class, disability, immigration status, gender identity, sexuality or other personal identities beyond biological sex.” 

Similar to the appointment process for judges, we should consider lawyers from various backgrounds in handing out awards. We should celebrate lawyers that perform everyday legal work, and not just award lawyers working on large cases. Helping individuals with everyday matters is just as important and deserving of applause. And should be encouraged. However, the lawyers that tend to work on the sexy projects that get the most attention and award buzz are often the ones that have benefited from a process tainted by bias and elitism. 

(Views are my own and do not represent the views of any organization.)