Preventing legal disputes at the press of a button
Can algorithms function as a tool for lawyers and their clients to negotiate contracts? Georgios Stathis' PhD research shows that it can be done in the field of preventive law. Gradually, more stages of the workflow will be automated.
Georgios Stathis studied law at various universities before working in the industry, including TNO. Having examined the commercial application of algorithms as a tool, he was recently awarded a doctorate at Leiden University on the subject of avoiding legal disputes. The topic of his PhD research is ‘Preventive Legal Technology’: minimising risks, known in the business world as legal risk management, using algorithms.
The outcome, in short: artificial intelligence is up to the job in small use cases. However, providers of legal services must ensure that the technical side of their business is structured in such a way that all parties negotiating a contract can communicate properly with each other, allowing no room for misunderstandings.
Inspired by Onassis
There is a reason why he focuses on applying algorithms in the field of preventive law. Georgios Stathis was born in the Greek city of Ioannina, descending from generations of lawyers. ‘Growing up, I’d accompany my dad to the courts or client meetings. I saw that there’s a risk in what people do which can lead to disputes needing to be resolved. That’s a complicated matter. Usually, the people involved in a dispute are affected emotionally and experience distress. That made a big impression on me when I was young – seeing people in such distress. Later, I was doing an internship and my father bought me a book about the lawyer of Aristotle Onassis which taught me about the notion of prevention. I realised that this could actually be a solution to the problems I'd noticed. Maybe if we could do more on the prevention side, there would be less emotional distress.’
The Greek shipping tycoon Onassis, together with his directors and lawyer, was a master in the prevention of financial losses by managing risks in contracts. Onassis actually earned money with these preventive clauses.
Research development and collaboration
The research of Stathis developed through various collaborations, including working with Jaap van den Herik, the professor famous for stirring up his audience back in the 1990s by declaring that computers can judge court cases. Van den Herik became his supervisor, together with Jan Adriaanse. The collaboration led to his thesis on legal risk management with technology, as it had become clear from his previous master's thesis that automating legal risk management was feasible.
A great deal of the manual work that we see today will gradually be replaced by technology
Stathis linked preventive law to the emergence of the automation of contracts, which he refers to as intelligent contracts or ‘iContracts’: ‘They show how it’s possible to automate a contract based on risk and communication data, enabling the application of preventive law on contracts through the use of technology.’ He developed these under the guidance of his supervisors as well as an open-source collaboration with TNO.
Intelligent contracts
The aim is to negotiate and conclude contracts securely with minimal or no human intervention. For instance, the case study used by Stathis in his research was an agreement between a freelance web designer and a client – a simple, common service agreement. The automated negotiation of this type of contract should then include preventive clauses where the web designer and the client agree, for instance, that the freelancer will only be paid after the website has been delivered, only if there is explicit agreement on milestones delivered. The outcome of the case study was that it was possible to design a reliable Preventive Legal Technology.
Language model instead of lawyer
On the basis of his research, Stathis expects that iContracts will gradually automate most stages of the legal workflow. Lawyers, however, will not yet be able to fully benefit from the outcomes of this research. ‘Technology has not advanced to the point where this work can be fully automated’, explains Stathis. ‘But, with the progression of time and advancements in technology, a great deal of the manual work that we see today will gradually be replaced by technology.’
So, could it be that in time, we’ll no longer need experts? Just someone who can hit a button and let the algorithm take care of the negotiations? Only time will tell.
Jan-Willem Oomen