successfully managing the legal issues of ai adoption kemp ......nov 09, 2016  · case study 1 –...

SuccessfullyManagingtheLegalIssuesofAIAdoption

KempITLawBreakfastSeminar

London9November2016

• 09.05– 09.25:TheapplicationofAI/cognitivecomputinginlegalservicesandcompliancemarkets,TimHarty,GlobalHeadofActionableIntelligence,ThomsonReuters

• 09.25- 09.45:LegalIssuesinAI– casestudies,DeirdreMoynihan,KITL• 09.45- 10.00:coffee/networking• 10.00– 10.20:novellegalissuesandkeypointstowatchoutfor,RichardKemp,KITL• 10.00– 10.30:Q&A,discussion• 10.30:sessioncloses

Agenda

The Application of Artificial Intelligence in Legal & Compliance

Tim Harty, Thomson Reuters

REUTERS / Firstname Lastname

Covering

• Introduction to Artificial Intelligence / Cognitive Computing

• Application of Cognitive Computing in Legal and Compliance

• Cognitive Computing at Thomson Reuters

The Fourth Industrial Revolution

Disruptive, pervasive, fast evolving and line-blurring

• Artificial Intelligence• Robotics• 3-D printing• Biotechnology• Cloud computing• Internet of Things• More...

What is AI / Cognitive Computing?

Cognitive systems understand human expressions – textual, verbal, visualBy reasoning about the actual intention or problem being addressed They learn how to recognise patterns of meaning through examples and feedbackAnd they interact with humans on their own terms

… and do so at scale.

Cognitive systems aim to amplify

human cognition

The simulation of human thought processes in a computerised model

• Information need• Events (triggers)• Exploratory• Experience-based

Find

• Model-based• Hypothesis

generation• Inferring/Reasoning• Evaluation

Analyse• Scenario generation• Optimization• Answering• Deciding• Advice

Decide

The simulation of human thought processes in a computerised model

What is AI / Cognitive Computing?

Component Technologies

Natural Language Processing – Machine Learning – Search/Q&A – Knowledge Base –Inference Engines – Deep Learning

AI Examples – Controlled Experiments

Act like a chess master (1997)

Act like a Jeopardy contestant(2011)

Act like a Go champion(2016)

• Moore’s Law – computing power doubles every two years

• What happens when AI starts training itself?

AI Examples – Coming in From the Wild?

Act like a driver

Act like a teenager

Act like an assistant

• Pervasive

• Taking action

• Garbage-in, garbage-out

Components of AI are already in use legal & compliance

Answer compliance questions Conduct more thorough legal research

Find relevant documents Identify hidden risks

Suggest research avenues and documents based on understanding of your research path

Technology assisted review tags relevant documents based on a trained seed set

Contract management systems that transform documents into structured data and provide actionable intelligence on risk levels

Natural language Q&A over complex and shifting regulations

Near Term Legal & Compliance Examples

Legal Assistant Solve Disputes

Technology assisted decision support, such as to suggest the best order in which to renegotiate a series of corporate contracts

Online dispute resolution systems use previous decisions to improve on settlements

Looking Ahead

Persistent Assistant Automate ComplianceRecommend Legal Strategies

Coming in the not too distant future

• Accelerate the development of Cognitive solutions by providing dedicated focus and resources

• Explore and develop in house capabilities in the rapidly developing field of cognitive computing

• Act as a clearing house for potential applications of cognitive computing across Thomson Reuters

• Based in Toronto, Canada, with satellite teams in business hubs

Led by Khalid Al-Kofahi, Head of R&D for Thomson Reuters

Thomson Reuters has a unique combination of assets to develop differentiated Cognitive Computing solutions

Thomson Reuters – Centre for Cognitive Computing

Data

Data

13

Cognitive computing enables TR to automate and accelerate knowledge work

Cognitive ComputingInputs

Finde.g. What regulatory obligations were created last month?

Comparee.g. How do those obligations relate to pre-existing obligations?

Understande.g. What happens if I don’t comply with these obligations?

Decidee.g. What do I have to do to comply with these obligations?

Tasks

Machine Learning

Natural Language Processing

Knowledge Models

+Reasoning

Engines

Data

Taxonomies

Dictionaries

What are we heading?

Intelligent Agents that understand the domain, the task and learn from the user. Always on, responsive and proactive

• Answer questions

• Analyse scenarios

• Measure risk

• Provide advice

Big questions remain to be answered

• What are the likely impacts on business models?

• What are the impacts on legal & compliance careers?

• Who are the winners, who are the losers?

• What should organisations be doing to prepare?

DeirdreMoynihan,KITL

• Casestudy1:legalservices• Casestudy2:autonomousvehicles• Casestudy3:smartcontracts

LegalissuesinAI:casestudies

• UKMarketforLegalServices

• £30bnUKindustry• 2%ofGDP• SubstantialinvestmentinAIinlegalservicesin2015/2016

Casestudy1– AIinLegalServices

• AIdevelopingasatooltosupportrepetitive,processintensive,standardisablecomponentsoflegalwork:

• Corporateandfinanceduediligence• E-discovery• Contractreview,draftingandanalysis

Casestudy1– AIinLegalServices

• 4maincharacteristicsoflegalservicesAI:

• Naturallanguageuserinterface• Contextawaremachinelearning• Abilitytogenerateevidencedbasedresponses• Cognitiveanddynamic

Casestudy1– AIinLegalServices

• RegulatorybackgroundforLegalServices

• SolicitorsRegulationAuthority• Clients’Regulators• SRA’sCodeofConduct– Outsourcing• TermsofEngagement• Insurance

Casestudy1– AIinLegalServices

Casestudy2- vehicles

HandsOn,EyesOn

HandsTemporarilyOff

HandsOff,EyesOff

Casestudy2- vehicles

Source:adaptedfromOECDInternationalTransportForumpaper,‘AutonomousandAutomatedDriving– Regulationunderuncertainty,page11,http://www.itf-oecd.org/automated-and-autonomous-driving

Typesofsensorsrequiredforanautonomousvehicletoreplicatehumanskillsandexperience:

Casestudy2- vehicles

• UKRegulatoryApproach

• DfT hassetuptheCentreforConnectedandAutonomousVehicles

• RegulationReviewFeb2015• CodeofPracticeforTestingJuly2015• ConsultationJuly2016

• PermissibletotestautonomousvehiclesintheUKwithoutlicenseorpriornotification

• Needto(i)amendinsurancelegislation,(ii)clarifyprovisionsrelationtothebuildanduseofnew/neartomarkettechnologies,(iii)provideguidancetodriversregardingsafeandappropriateuseofautonomousvehicles

Casestudy2- vehicles

Casestudy3– smartcontracts

• Blockchain

• TechnologybehindBitcoin• Comprehensive,alwaysuptodate,distributedrecordorledgerofwhoholdswhatorwhotransferredwhattowhom

• Worksthroughcryptography• Eachuserhasacompleteandcurrentcopyoftheblockchain

Casestudy3– smartcontracts

• Smartcontracts

• Softwarecoderepresentingaself-executingcontractasanarrangementthatacomputercanmake,verify,executeandenforceautomaticallyunderspecifiedconditions

• Benefitsincludelowercosts,latencyanderrorrates• Evolutionnotrevolution

Casestudy3– smartcontracts

• Issues

• Regulatoryissuessurroundcommercialadoptionofblockchaintechnology• Technologyisfragmentedandcommonstandardsneedtobeagreedandadopted• Scalability• Needtorepresentcontractualrulesassoftware• Relationshipsbetweensoftwarebuilders,operators,contractingpartiesandotherusers• Ensurethatsmartcontracthasthesamestatusascurrentcontractualforms

Casestudy3– smartcontracts

DeirdreMoynihan

deirdre.moynihan@kempitlaw.com02030111627

RichardKemp,KITL

• Somecommonmisconceptions– agency,entitiesandlegalpersonality• ContractingforAI:whataretherisksandhowaretheybestmanaged• Regulation– disappearingdownathousandfoxholes?

AI– novellegalissuesandkeypointstowatchoutfor

• AnthropomorphisingAI– the‘IRobot’fallacy• Thinkbigdataandsoftwareratherthanhumanandbrain

• Imputingrightsanddutiesfromactions– the‘agencyfallacy’• AnagentmustbeapersonandanAIsystemisnotofitselfaperson

• The‘entityfallacy’:platformsandDAOspossessseparatelegalpersonality• Asmartcontractplatformwillbeoperatedby,butisunlikelytobe,aperson

AI– somecommonmisconceptionsclarified

• WhatinterestsshouldAIregulationprotect?• “AIhasapplicationsinmanyproducts,suchascarsandaircraft,whicharesubjecttoregulationdesignedtoprotectthepublicfromharmandensurefairnessineconomiccompetition”(USFutureofAIReport,Oct2016)

• Shouldexistingregulatorystructuresbeadaptedornewonesputinplace?• “Ifan[AI-related]riskfallswithintheboundsofanexistingregulatoryregime,thepolicydiscussionshouldstartbyconsideringwhethertheexistingregulationsalreadyadequatelyaddresstherisk,orwhethertheyneedtobeadaptedtotheadditionofAI”

AIandregulation

• Howshouldregulatoryburdensbekeptproportionate?• “whereregulatoryresponsestotheadditionofAIthreatentoincreasethecostofcompliance,orslowthedevelopmentoradoptionofbeneficialinnovations,policymakersshouldconsiderhowthoseresponsescouldbeadjustedtolowercostsandbarrierstoinnovationwithoutadverselyimpactingsafetyormarketfairness”

• Whatroleshouldcentralgovernmentplay?• “itistoosoontosetdownsector-wideregulationsinthisnascentfield”(UKHoC selectcommitteereport,Oct2016

• UKfavourssettingupaCommissiononAIandaRASLeadershipCouncil• USreportadvocatescommongoalsforgovernmentandagencies

• AI,the4th industrialrevolutionandBrexit– badtimingfortheUK?

AIandregulation

• Autonomousvehicles– theUK’sapproach• Ensuretherearenoobstaclestotestingvehicletechnology• Consultwidely• BreakregulatoryelementsdownintobitesizeschunkstopragmaticallyalignregulationtoADASandAVSdevelopment

• Legalservices• BoughtinAIfallswithinthecurrentregulatorystructureasoutsourcing(O7.10)• AllotherSRACodeofConductrequirementsapplyanyway

AIregulation:autonomousvehiclesandlegalservices

• Commercialcontractsforthedevelopment,provisionanduseofB2BAIsystemsbetweendeveloper/licensor/providerandlicensee/customer

• Largelyindistinguishablefromothersoftwarecontracts,whetherprovidedon-premiseasalicenceorintheCloudasaservice.

• Smartcontracts– morecomplex• Codingthecontractualecosystem– ‘Chittyoncontractsincode’• Developer/platformoperatoragreement• Platformoperator/useragreement

AIandcontractlaw

• Copyright• ‘Inthecaseofaliterary,dramatic,musicalorartisticworkwhichiscomputer-generated,theauthorshallbetakentobethepersonbywhomthearrangementsnecessaryforthecreationoftheworkareundertaken’(s.9(3)CDPA)

• ‘computer-generated’means‘thattheworkisgeneratedbycomputerincircumstancessuchthatthereisnohumanauthorofthework’(s.178CDPA)

• Patents• Computerimplementedinventionscontributingtothetechnicalfieldofknowledge(potentiallypatentable)beyondcomputerprogramassuch(notpatentable)(Macrossan,etc)

• Ifpotentiallypatentable,‘“inventor”meanstheactualdeviseroftheinventionand“jointinventor”shallbeconstruedaccordingly”‘(s.7(3)PA)

• Solution• Legislatecontractuallyforownership,assignment,licensingofcomputergeneratedworksandcomputerimplementedinventions

AIandIPlaw:computergeneratedworks&implementedinventions

• Negligence• Thecommonlawduty‘tobecareful’• ‘thecategoriesofnegligenceareneverclosed’• LikelytoapplytomostAIs?

• Nuisance• Interferencewiththeuseorenjoymentofland• AIrunningamokanalogisedtostrayinganimal?• Rylands vFletcher – escapeof‘dangerousthing’?

• Productliabilityandbreachofstatutoryduty• Willfollowregulation?

AIandtortlaw

RichardKemp

richard.kemp@kempitlaw.com02030111670