Boulle: Help with the burden of compliance
A lawtech company that offers generative AI-driven title checking for property transactions has launched a groundbreaking insurance-backed accuracy guarantee for its product.
Orbital Witness said the policy provided by First Title Insurance was the first of its kind anywhere in the world and effectively outsourced the compliance demands for law firms to be happy using the technology.
First Title will initially underwrite Orbital Witness’s residential property product, meaning that in the event of an error which results in a claim for compensation, the law firm would not have to claim on its own professional indemnity insurance.
Most of the company’s residential property clients are regulated by the Council for Licensed Conveyancers and so the policy matches the minimum cover it requires – £2m. It is an optional add-on which costs less than £10 per policy.
The Orbital Witness system checks title documentation and flags up issues the conveyancer needs to consider, for example a short lease. It produces its report in about a minute.
Co-founder Ed Boulle said First Title spent a lot of time last year examining the technology before agreeing to underwrite it, and would continue to evaluate it: “It’s a very deep level of scrutiny.”
With the “landscape for AI regulation shifting”, he said the burden was on law firms to satisfy their regulator and their own insurers that any new technology was safe to use and would not create additional risks to their clients.
“The challenge facing most firms, however, is that they simply don’t have the necessary expertise in-house to deeply evaluate and continuously monitor generative AI products.
“Insurance isn’t just about downside protection, it can also help with the burden of compliance. First Title will continue to test and monitor our generative AI output on an ongoing basis.”
The insurer was able to undertake more due diligence than any one law firm could, Mr Boulle explained.
He said they would look in time to offer insurance on commercial property transactions too, although obviously the cover required would be much larger.
Orbital Witness was also looking at extending the technology to searches, TA6 forms and other documents, he added.
The company says its technology is used daily by over 4,000 lawyers and property professionals, including the real estate teams at all five of the magic circle law firms and the UK’s largest conveyancing and remortgage businesses.
Mr Boulle added: “We might be the first AI provider to integrate insurance into our product, but we won’t be the last.
“Before long, insurance will – and indeed, should – form part of the framework within which businesses will be expected to use AI in a way that is guaranteed, financially accountable and compliant.”
In other AI news, Ashurst has rolled out legal AI platform Harvey globally, giving access to all of its 4,000-plus lawyers and business services staff.
The firm undertook one of the most extensive global trial and pilot of Harvey, involving over 525 users, drawn from across 23 offices worldwide, running over 4,000 queries in the pilot phase.
This helped inform the report Ashurst published earlier this month on the use of AI in the legal market, which said the greatest initial value for the technology in a law firm context was in helping lawyers to create first drafts quicker and more efficiently.
First Title sold a “HOPP” (home owners protection policy) widely throughout USA and Canada and tried to introduce it to the UK without success due mainly because of the legal profession – it was a great product. It woold be interesting to establish if this is a similar model.