Bishop: Lot of litigation still arise from ‘bog standard’ disputes
There has been a “rapid uptake” of artificial intelligence (AI) by in-house legal teams in the past year, with four out of 10 adopting it for the first time to manage litigation, new research has found.
Meanwhile, the proportion of in-house lawyers involved in disputes in England and Wales jumped from less than two-thirds to more than three-quarters.
Researchers from national firm Shoosmiths said: “Many UK businesses took the plunge and implemented AI for litigation management for the first time in the past year.”
AI had already been adopted for document discovery and e-disclosure by seven out of 10 in-house lawyers, with 41% having done so in the past year.
“For other key tasks – identifying litigation risks and opportunities, assessing claims, and scanning the legal horizon – around a third of respondents had applied AI, with most of those having done so in the past 12 months”.
Meanwhile, AI headed the list of litigation risks that cause the greatest concern to company boards, ahead of regulation, employment, competition and environmental.
Shoosmiths spoke to more than 360 general counsel and senior in-house lawyers from large UK-based businesses, all with annual revenues of over £100m, for the report Litigation Risk 2025.
The proportion of in-house lawyers engaged in disputes in England and Wales jumped from 62% in 2023 to 76% in 2024.
This growing volume was expected to continue, with three-quarters of in-house lawyers expecting to be involved in disputes in England and Wales in the next 12 months.
Half of in-house lawyers said their firm was involved in at least one regulatory dispute in the past year, up from 36% in 2023, with 42% engaged in competition disputes, up from 24%.
Regulatory disputes were especially common in the financial services sector (58%).
Nearly six out of 10 in-house lawyers expected the risk of intellectual property disputes to increase in the next three years, more than any other area of dispute including group litigation (55%), AI (54%) and employment disputes (52%).
Despite this upward trend, only 45% of in-house departments increased spending on disputes, with the average cost of a claim valued at over £1m put at £600,000-plus.
The main consideration in deciding whether to pursue a claim was the cost (66%), followed by the expected duration and reputational damage. To mitigate cost challenges, 46% of in-house lawyers said they would consider litigation funding, down from 56% last year.
In contrast to the take-up of AI, researchers said that the adoption of measures to manage litigation risk had “barely moved” since last year.
The most popular tools were setting aside time and resource for litigation risk analysis, undertaken by 67% of in-house lawyers, investing in litigation risk analysis technology (57%) and horizon scanning for legal changes (52%).
Alex Bishop, head of dispute resolution and litigation at Shoosmiths, said company boards “should not lose sight of the fact that a lot of litigation arises from ‘bog-standard’ commercial disputes or contract breaches”.
She went on: “This is likely to remain the case for some time. It is important that boards do not lose sight of that just because the new and emerging risks are occupying a lot of brain power.”
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