Attorney Jack Cohen knows both sides of the blame and claim game. He’s spent nearly 40 years practicing law, much of it trying injury suits for insurance companies. But he’s also written a novel called “Bad Faith,” which tells the story from the victim’s side.
Cohen knows his limitations—you can’t fight artificial intelligence (AI). You have to work with it. When he gets a new case, he sits down at his computer and goes straight to Lex Machina—Latin legalese for “Law Machine” and a company that provides litigation data and analytics.
Artificial intelligence has profoundly changed the legal landscape in ways almost incomprehensible to people injured in car accidents and forced into the court system each year by unfortunate and hurtful circumstances. “Injured in an accident? We can help,” blare the televised legal ads, followed by the multimillion-dollar settlements they’ve won.
The Merciless Yardstick
In many cases it’s artificial intelligence—rather than your lawyer—that could determine how much your injury, pain, suffering and, perhaps, disability is worth. And unlike your sympathetic attorney, AI is a merciless yardstick.
Think of AI as a miner who tunnels through billions of pieces of litigation data in all the major courts of the nation for gold: relevant information about decisions, motions, lawyers, judges, the parties filing suits and the subject of the cases themselves. It then tells how to use that information to win cases or—more likely—what kind of settlement is likely.
The lawyers representing both sides in an injury case—the insurance company and the victim—may thrash and posture, but in the end an estimated 97% of these cases are settled, while only a handful actually go to trial.
And even in the courtroom, artificial intelligence may be wearing the black robes, because in many instances it knows exactly how a certain judge will rule. AI already knows which state, city and local courts are more favorable to workers compensation and auto insurers, and which jurisdictions these carriers call “judicial hellholes.”
Artificial intelligence extends even further into the legal profession. It can predict which lawyers and law firms are going to be hard-nosed and which are likely to broker a cheap settlement. Big law firms now pitch major insurers and companies on how good they are—a practice known as “beauty contests”—using AI data to highlight their won/loss record and timeliness in getting the right judgment.
“If you’re responding to a [plaintiff’s] brief and not using a tool like this, you’re probably committing malpractice,” says Joe Breda, who is president of Bloomberg Law, which is part of Bloomberg L.P. and one of the three biggest AI firms. It’s also seen as leverage that big companies have over the public, which seldom gets to see this data.
If this seems troubling to a 50-year-old office worker who has just broken her shoulder in a fall and is afraid to do battle with the AI-equipped insurance company, she’s not alone. Consumer advocates are troubled too. “AI is ubiquitous,” says Executive Director Birny Birnbaum of the Center for Economic Justice. “The need for consumer protections is obvious.”
“Who knows what shenanigans are going on in that space,” says Robert Hunter, director of insurance at the Consumer Federation of America.
The Big Players
The lawyers who handle injury cases for the public better be equipped with more than a traditional set of green and beige law books. Familiarity with one of the three major information services available to lawyers—Bloomberg Law, WestLaw Edge owned by Thomson Reuters, or Lex Machina, a part of LexisNexis— is becoming essential.
AI providers don’t come cheap, but some of the major players in AI say they make price allowances for a country lawyer’s practice. “Our price depends on the size of the legal department,” says Carla Rydholm, director of product management for Lex Machina, “and we include small law firms.” But she wouldn’t divulge specific rates.
Access to a complete Bloomberg Terminal is $24,000 a year. But that includes additional services such as financial data and worldwide news, which could also be useful to an attorney.
The Rocky Road to an Insurance Settlement
A personal injury case starts when someone is injured. A serious injury, such as one sustained in a car accident, is almost always reported to insurers. Then an insurance adjuster gets to work.
They estimate the extent of the injury, the likely pain, the slow or speedy recovery, the possibility of long-term disability, as well as the potential loss of future income, which could span the rest of that person’s life. The victim’s age, current income, length of time off, the need for ongoing medical treatment, possibility of retraining for another career and even loss of marital relations are all factored in.
The adjuster “blackboards” this information, which is then handled by either an in-house computer program or dispatched to an AI system like Colossus, which is owned by Computer Services Corp. Colossus will evaluate the damage and devise a settlement figure.
Those who’ve confronted Colossus describe it as a powerhouse. “It’s believed to be used by many of the largest insurance companies in the country, including Allstate,” says David Goguen, a legal editor with Nolo, an online legal service. “Insurers don’t publicize . . . that it results in lower settlement payouts,” he adds.
Up to 70% of car accident claims in California are evaluated by its software, estimates Krasney Law’s website.
Allstate agreed to pay a $10 million settlement to 45 states in 2010 after an investigation by the National Association of Insurance Commissioners found that the nation’s fourth largest insurer failed to “modify” the Colossus software program to make it more consistent across the country. Representatives for Colossus declined to comment on this or any other subject.
“Before you settle, ask to see the calculation used to arrive at the offer,” says Hunter. “It’s often below what the real payout should be.” For an idea of what that calculation should include, see this Nolo settlement calculator.
After a computer program generates its analysis, accident victims have a choice. Negotiate with an insurer who’s armed with AI’s findings and perhaps an unwillingness to compromise, or look for an attorney. More than half of accident victims attempt to find their own lawyer. Even so, it’s likely to be a long process getting to court, if it ever reaches a courtroom.
When the actual insurer’s attorney does enter the courtroom, he or she comes with “data-driven insights” that will be used “to show off [their] experience or to discredit an unworthy opponent,” according to Lex Machina’s Rydholm. One easy question AI can answer is: Has the opposing counsel ever handled a similar case?
Highlighted in Blue
If the case comes before a judge who’s already heard similar motions, AI allows an attorney to quickly sort through thousands of documents with that judge’s name on them. Through “natural language processing,” a lawyer can find the judge’s exact words, often highlighted in blue, pull them out of a prior motion, and insert them into this motion.
Judges could be impressed or flattered, but in any case are likely to agree with their own words. This may encourage the insurer’s attorney to ask for a “bench trial” where the judge will decide. Want to appeal? AI will also evaluate the appeals court and how its judges are likely to rule.
If going to trial is the option, be aware that AI may not only be used against you, but turned against you personally. AI can troll court records that show every time you’ve previously been involved in any court matter.
“There are no secrets in American life,” warns attorney Cohen.