Episode 3. AI slop in court and the costs risk for law firms.

0:08 A former Lord Chancellor stood up at Lincoln's Inn last Thursday and said that nobody needs a new rule for AI in litigation.

0:16 The court already holds the answer, and it is the oldest question in civil procedure.

0:23 Who pays.

0:26 Good morning, and welcome to The Legal AI Brief, the Monday round of the AI news that matters to smaller law firms.

0:33 I am Saqib Khan. My legal career began in large commercial law firms and includes fourteen years as an owner of a law firm and four years as a fee-paid county court judge.

0:48 I run Adliora, an AI consultancy that helps small and mid-sized firms adopt AI safely, profitably and within the rules.

0:58 Every Monday I take the developments from the past week, separate the noise from the parts that touch your practice, and set out in plain terms what a sensible firm does about them.

1:11 Let us get into the week.

1:14 Four things worth your attention. On Thursday the twenty fourth of September Sir Robert Buckland, Lord Chancellor from 2019 to 2021, gave the keynote at the Costs Law Reports conference and proposed that the courts use their existing costs powers to discipline the volume of AI generated material now reaching them.

1:39 That is the main story. On Monday the twenty first Mr Justice Butcher held in the High Court that the SRA cannot use its statutory production power to make a firm hand over a client's privileged documents unless the client waives privilege.

2:00 I come back to that one from the bench. At Southwark Crown Court a judge has allowed all six counsel in a criminal trial to record the evidence and transcribe it, on strict terms about where the recording is kept, when it is deleted and whether anyone may use it to train a model.

2:19 Legal Futures reported the ruling this morning, and the conditions read like a checklist for any AI note taker your firm already uses.

2:28 And the government's Advisory AI Growth Lab, the sandbox in which the SRA, the Legal Services Board, the Council for Licensed Conveyancers and the Information Commissioner work with firms testing AI products, closed to applications at midnight last night.

2:46 If you applied, the regulators now hold your proposal. If you did not, the lab still matters, because what it learns will shape the guidance the rest of us receive.

2:58 The occasion was the annual Costs Law Reports conference, held at Lincoln's Inn, and the speaker was a man who has held the office responsible for the courts.

3:08 The Law Society Gazette reported the speech on Saturday. His starting point was the litigant in person with a chatbot.

3:16 Anyone who has run a case against one this year knows the pattern.

3:20 A person without a lawyer can now produce in an evening more pages than a trainee drafts in a week.

3:27 Some of it is sound. Much of it is not, and some of the authorities do not exist.

3:34 Every page of it lands on the desk of the other side's solicitor, who has to read it, check it and answer it, and on the desk of a judge who has to decide what matters in it.

3:46 His point about why this happens was a sharp one. A tired human lawyer eventually decides that an argument is not worth making.

3:55 The machine never tires, and it has no sense of when to stop.

4:01 What he proposed was not a new rule. He said, in terms, that he opposed special rules for AI, because the court already has the powers it needs.

4:13 Part 44 of the Civil Procedure Rules lets the court look at the conduct of the parties when it decides who pays and how much, and it lets the court disallow costs or order them where a party has behaved unreasonably.

4:29 His suggestion was that courts make the position plain at the outset of a case.

4:35 You may use AI to help you prepare. You remain responsible for the accuracy of what you file.

4:42 Authorities must be verified and facts checked. Documents must be proportionate to the dispute.

4:49 And if your use of AI runs up costs that were unreasonable, the court may take that into account when it comes to costs.

4:58 He drew a distinction that matters. A litigant in person who uses a tool without understanding its limits is in a different position from one who uses it irresponsibly, and he argued against any blanket sanction on people who act for themselves.

5:15 Access to justice is the reason those people are in court at all, and a rule that punished them for using the only help they can afford would defeat its own purpose.

5:28 Then he turned to the profession, and here the distinction falls away.

5:33 Lawyers, he said, cannot plead ignorance of what these tools do.

5:38 His phrase, reported by the Gazette, was that if you put it before the court, you own it.

5:46 Place that beside what else has happened this year and the pattern is clear.

5:51 In May the Law Society asked the SRA and the courts service for clear rules on AI in court documents, and the Civil Justice Council has consulted on declarations where AI helped prepare evidence.

6:07 In the same month a circuit judge in the West Midlands referred two solicitors to the SRA after false citations reached the court, saying that admonishment alone was not enough.

6:21 And at the start of this month the Solicitors Disciplinary Tribunal struck a foreign lawyer off the register after he used AI to write his own defence and it invented his authorities.

6:36 Every one of those responses runs through conduct. Buckland's speech proposes something different.

6:44 It routes the problem through money, and money is where a small firm feels a problem first.

6:52 Two things make this more than a speech. The first is who gave it.

6:56 A former Lord Chancellor speaking to a room of costs lawyers and judges is not floating an idea for the sake of it.

7:04 The second is that nothing in his proposal needs anyone's permission.

7:08 No consultation, no statutory instrument, no rule committee.

7:13 A district judge is free to give that direction at the next case management conference, and I expect some will.

7:27 A word about what I do. Adliora advises small and mid-sized law firms on adopting AI without falling foul of the rules that govern you. Where to begin, which tools earn their place, what your duties on supervision and confidentiality mean in practice, and how to write a policy your people will follow. If this subject sits on your desk and nobody in the firm owns it, that is the problem I am paid to solve.

8:02 The speech bears on a smaller firm from two sides, and most firms stand on both.

8:09 Take first the firm on the receiving end. If you act against litigants in person, and most high street practices do, you already know the cost of answering material a machine produced.

8:22 Until now that cost has been close to invisible. It sits inside ordinary time entries marked perusal or preparation, and when costs come to be assessed nobody can tell how much of the bill came from reading pages that should never have been written.

8:41 Buckland's approach only helps you if you can show the court what the excess cost your client.

8:48 A firm that cannot separate that time from the rest will find the power exists and it has no evidence to put behind an application.

8:58 Now take the firm on the other side. The same logic applies to what you file.

9:04 If your own skeleton runs to thirty pages because a tool made thirty pages easy, and eight would have done, a costs judge is entitled to ask why your client, or your opponent, should pay for the other twenty two.

9:20 That question has always existed under the rules on proportionality.

9:25 What changes is that a judge now has a public reason to ask it, and a former Lord Chancellor's words to quote when asking.

9:35 For the lawyer who files something false, the exposure goes further, because the court's power to make a wasted costs order against a legal representative personally has not gone anywhere.

9:49 And there is a third position that small firms know well, which is the client who arrives with a bundle already drafted by a chatbot and asks you to file it.

9:58 If you file it, you own it. That means you read every authority, you check every fact, and you cut it to what the case needs, and you charge for that time with a clear explanation of why.

10:11 Start with your time recording. Open a separate activity code this week for time spent dealing with AI generated material from the other side, reading it, checking its authorities and answering it.

10:24 Tell your fee earners to use it whenever a document from an opponent bears the marks of a machine, the repeated headings, the authorities nobody has heard of, the length out of all proportion to the claim.

10:37 Without that record you cannot ask for the cost back. Next, when you face a litigant in person in a case that is already filling up with this material, ask the court at the first hearing for a direction in the terms Buckland described.

10:53 Keep it neutral and fair to the other side. Accuracy is the filer's responsibility, authorities must be checked, documents must be proportionate.

11:04 A judge is far more likely to give a direction that protects both parties than one aimed at the person without a lawyer.

11:12 Then look at your own side. Every document going to court with a machine's hand in it should carry a named person who checked the authorities against a source they opened themselves.

11:24 Put that on the file. It is the same discipline the regulator asks of you, and now it protects your costs as well as your practising certificate.

11:33 Here is the one instruction to take from today. Before Friday, create the time recording code and send one line to every fee earner telling them when to use it.

11:45 The ruling of the week is Carter-Ruck against the Solicitors Regulation Authority, decided by Mr Justice Butcher on the twenty first of September.

11:56 The SRA had served notices under section 44B of the Solicitors Act demanding documents from a client's files, and the firm said the documents were privileged.

12:08 The judge agreed with the firm. The section contains no express words overriding privilege, and privilege is a fundamental right, so it takes clear words or a necessary implication to displace it.

12:24 At best for the SRA, he said, the section was equivocal, and equivocal is not enough.

12:32 Read that as a judge reads it. The court did not decide that the regulator is unimportant.

12:39 It decided that privilege belongs to the client and yields only to words that are unmistakable, and the High Court has declined to make an exception for the regulator of the profession.

12:52 Hold that thought the next time someone in your firm pastes a client's privileged advice into a tool whose terms nobody has read.

13:02 The law guards that material against the regulator itself. It deserves at least the same care inside your own office.

13:18 And a word about my technological venture, so you know where I stand. Bracton is a case management system for firms in England and Wales with agentic AI designed in from the ground up, rather than bolted onto software written twenty years ago. Overnight it reads every live matter, so the morning list is waiting with the action drafted and the research carrying a source you can open. A person signs everything off. Bracton legal dot co dot uk.

13:54 That is the week. If you take one point from it, take this. A person in your firm has to own what these tools produce, and that will not change whatever the tools cost or how capable they become.

14:11 If you want an honest view of where your firm stands, there is a two-minute readiness check on the Adliora site, and you are welcome to send a short message and talk it through with me directly.

14:24 I am Saqib Khan, this has been The Legal AI Brief, and I will be back next Monday with the week that was.

14:31 Thank you for listening.

14:33 The transcript of this episode, with a timestamp on every line, sits beside the two minute readiness check at adliora dot com. Have a great week.