Artificial intelligence is at the forefront of a wave of innovations, from suggesting films on Netflix, to processing insurance claims in Japan, and driving our cars. But as we continue to delegate more and more of the decision-making to machines, and provide them with the means to execute those decisions in the physical world (via robotics), who is responsible when things go wrong?
This is not a question for the far off future, indeed the National Transport Commission is already working on regulations for self-driving cars.
Such questions need practical answers, with an approach that will grow with the increasing sophistication of AI technology.
Ashley Kelso will be presenting a paper at the Joint International Conference on Artificial Intelligence to address the issues of:
Who is liable when a robot causes injury or damage?
What are the legal risks involved in introducing robots for use by the general public?
How can these legal risks be managed as part of the design process to improve safety and minimise litigation?
This will be discussed by reference to a real world case study where a company was sued in Australia for injuries caused by a robot.
It is a problem common to most businesses: How to resolve payment disputes without:
irreparably damaging business relationships;
spending all your money on lawyers; and
losing countless hours responding to legal paperwork.
In times gone by, the lawyer’s answer to any dispute was to file in court and let the judge decide. But times have changed, businesses must do more with less, and being tied up in litigation is something to be avoided by both sides if possible.
Types of ADR
Thankfully, we now have a full range of methods for resolving disputes outside of court, and often these methods will be mandated in the contract as a prerequisite to taking the matter to court. Known collectively as ADR (Alternative Dispute Resolution), the most common methods are:
Negotiation / Informal Settlement Conference
Other common methods include conciliation, neutral evaluation, and arbitration. However, this article focuses on negotiation and mediation as they are the more flexible and inexpensive options.
Business benefits of ADR
ADR offers the chance to:
Preserve business relationships
Minimise the time required to resolve a dispute
Keep the dispute confidential
Keep legal costs to a minimum
Arrive at a mutually agreeable solution, rather than having a judge impose a solution on you
Avoid the hassle of complex court procedures
However, the effectiveness of ADR largely relies on the skill of the lawyers involved. ADR is a very different game to litigation.
The key difference is that in litigation the solution that ends the dispute must be accepted by the judge, whereas in ADR the solution must be accepted by the other party. For this reason, the adversarial and combative tactics of litigation are usually completely counter-productive in most ADR. Quite simply, it is difficult to get agreement on anything if you get the other party’s back up.
To give disputes the best chance of settling with a minimum of time and expense requires a lawyer who can:
(1) Apply emotional intelligence in their dealings with the other parties, to keep the negotiations rational and productive
(2) See the dispute from all angles and advise on strategically reasonable offers
(3) Narrow the issues in dispute before the parties meet so that negotiations can run efficiently and focus on the real issues
(4) Reverse engineer the positions of tight lipped opponents to identify oversights and weaknesses in their assessment of the dispute
(5) Tactfully discuss your position and propose solutions to the other parties
(6) Apply creativity and adaptability in the use of pressure and strategy
(7) Make full use of a mediator to overcome sticking points and regain momentum
Without this, negotiations can quickly become a waste of time. However, with skilled legal representation ADR provides an excellent opportunity to maximise the outcome for your business, both financially and in the preservation of business relationships.
ADR exists as one tool in a range of strategies that can be used to contain the expense and time lost to disputes. Contact AustraLaw today to find out how we can help.
There has been a lot of talk about how ‘blockchain’, ‘machine learning’, and ‘Internet of Things’ (IoT) will ‘disrupt’ everything. How it will automate jobs, challenge existing business models, and overhaul the legal industry. But there haven’t been a lot of tangible examples of how this will occur.
This article aims to provide a snapshot of some of the technologies that are being developed, their practical applications, and the implications for businesses and legal advisers.
Automating Contract Administration
At a recent BIM (Building Information Modelling) seminar for Engineers Australia, Daniel Kalnins of Ridley demonstrated the fruits of a hackathon between Ridley and Google company Flux. The system allowed users to document the progress of work on site with mobile phones and tablets. This was then automatically processed and presented for project controls staff in an easy to follow dashboard.
This technology has tremendous promise, automating the leg work of reporting and allowing for tighter management of projects. Building on this functionality, additional capabilities could be readily added, such as:
Automatically generating chronologies of the actual progress of the project, which would link to the data used to produce the chronologies (to assist with continual improvement and dispute resolution);
Use of algorithms to detect when the risk of schedule slip reaches a certain level, and automatically identify the source of those risks;
Faster generation of payment claims and payment schedules;
Cutting the cost and delay of dispute resolution by functioning as an automatically generated ‘agreed bundle’ for the mediator/arbitrator/judge;
Automatically alerting users when notification requirements are triggered by events in the project. This would be assisted if these requirements were written in pseudo code in the contract, which would allow a computer to reliably scan contracts and automatically set up the alerts;
Electronic scoring of work by site inspectors where payments are a function of factors such as quality of materials and workmanship.
Automating Copyright Infringement Detection
Samuel Brooks of Sydney-based company, Veredictum, is solving the problem of copyright infringement where videos are copied without consent and shared on social media.
The service embeds an artist’s video with a unique marker which Veredictum searches for when users pay it to look for any infringing copies of the video. The task of searching such a large space is divided up by Veredictum and automatically outsourced to private computers. Veredictum then uses the Ethereum blockchain to record and verify the correctness of the search results. When infringements are detected the system generates infringement notices which can then be sent to the owner of the site that is hosting the infringing copies of the videos. It also employs a ‘Minority Report’ style procedure to resolve disputes – for example, when three computers search the same block of data but only one asserts that it detected an infringement.
Veredictum demonstrates how decentralised computing can be used to tackle huge repetitive tasks that are simply too time-consuming and expensive to do manually. Services like this are critical for maintaining the value copyrighted works in the social media age.
This technology could also potentially be employed to search social media sites for any comments made by a claimant relevant to their claim – a useful tool for plaintiff and defendant firms alike.
Property and Security Registries
The core function of blockchain technology is to serve as a reliable registry to record changes in the state of something (e.g. ownership of property). for instance, the Bitcoin blockchain records the changes in ownership, and issuing, of bitcoins.
The Ethereum blockchain is the next generation, it allows users to write ‘smart contracts’ so that more sophisticated transactions can be recorded on a blockchain. Smart contracts allow us to customise the attributes of the object to be tracked on the blockchain, the conditions and constraints on who can make changes to the attributes of that object, and what the effect of those changes will be. For example, smart contracts can be used to record interests in property, establish private carbon trading schemes, or issue vouchers and gift cards for retailers.
The problem that blockchain solves can be explained by reference to the old system for tracking ownership and interests in land. The risks of fraud, lost records, and subsequent discovery of third-party interests led to the necessity of establishing the Torrens system. Similarly, blockchain performs this roll of a common registry that can reliably track the changing ownership and interests in an object. However, the cost is reduced by having computers administrate the registry, and data preservation is improved by decentralised storage of the registry.
The next step is the development of contracts that are increasingly self-executing. For example, sensors (e.g. temperature, accelerometers, humidity etc) can be installed to measure the status of freight or buildings, that data can be transmitted to the cloud using low-power wide-area (LPWA) IoT communications technology, then fed into a smart contract via Oracalize or processed on an IoT platform like IBM Watson IoT. Australian businesses like Wisen are already offering IoT solutions that could be integrated with smart contracts.
We are also seeing other Australian IoT businesses, such as Wirefree and Blue IoT, offering IoT solutions for homes and offices. This makes the ‘infrastructure as a service’ business model available to the commercial and residential market, and in turn enables payment to be a function of on-going performance (e.g. running costs, maintenance costs, air temperature and humidity thresholds etc etc).
As the sophistication of these business models develops, it will become necessary to express the basis for calculating performance payments in code and demonstrate it to avoid disagreements (starting out, this could be done in an Excel document, or a smart contract stored on the blockchain).
Another foreseeable application would be in the construction industry. Project bank accounts might be administered using smart contracts. Or sub-contractors could receive an alert if the head contractor or employer’s account drops below a certain level, they might then be entitled to stop work until there are sufficient funds in the account to cover the rest of the work.
Wills as Smart Contracts
Imagine a world where wills were self-interpreting (i.e. enter in the facts and it tells you the division of assets and interests) and could not be misplaced?
It is foreseeable that a will could be converted into a smart contract and stored on the blockchain. Converting a will into code would also allow for it to be tested in advance to ensure that it divided up the assets as intended. This would allow lawyers to demonstrate the will for their clients, applying the various scenarios, and to confirm that it functions in accordance with their wishes. Concerns over bugs etc could be addressed with proper commenting of the code, and storage of the final version of the code using IPFS.
Machine Learning as an Assistant
The other major area of change will be where services and systems employ machine learning to cut down the leg work of traditionally time-intensive activities such as tender evaluations, contract analysis, discovery, and progress reporting. Computers can be trained to do a first pass over a large volume of documents and flag parts of those documents for risks, relevance, or general importance to the decisions the user needs to make.
This could also be applied in personal injury matters to reduce the work of evidence gathering. For example, the client enters in the details of their health care providers and the program automatically fills out the record requests to be sent out.
The future is uncertain, but that just makes it interesting
What all this means is that the game is changing:
Advisers need to be able to understand how these innovations work so that they can anticipate and deal with the issues that will arise, as established business models are threatened and legislators struggle to keep up. (i.e. ‘you can’t manage what you don’t understand’).
And the role of computer scientists and engineers as expert witnesses will likely increase, where questions arise as to the cause of unexpected results from autonomous systems and smart contracts.
If you’re working with smart contracts, IoT, or autonomous systems, Contact Us, we want to work with you. We can help with advice, dispute resolution, and assist with the development of hybrid legal instruments.
Legal disputes are a critical element of effective risk management. Disputes have the capacity to completely derail a project; blowing out the time, budget and the political capital (or social license to operate). Just like other risks on a project, there are factors that increase the likelihood of disputes occurring, and there are processes that can be implemented to mitigate the extent of their occurrence and impact on the project.
A few general observations can be made about construction and engineering disputes:
(1) Uncertainty combined with large sums of money is a recipe for disputes.
(2) Most disputes turn primarily on their facts.
(3) Time-pressures often undermine the ability of contractors to properly examine the contract or site conditions before work commences.
(4) Lawyers are often seen as an expense (rather than an insurance) and will more readily be engaged to fight claims, rather than prevent them.
(5) Legal disputes have the capacity to multiply the cost of a project.
Dispute Risk Management – Addressing Uncertainty
Therefore, an effect risk management strategy requires setting up systems and practices to mitigate the likelihood and duration of disputes. This is done primarily by addressing sources of uncertainty:
(1) Uncertainty in time limits and notice requirements for claims (e.g. extension of time, delay costs, variations, progress payments etc etc)
As soon as possible, make a list of all the prerequisites for making claims and extending time under the contract and keep it handy. You want to avoid having to rely on a verbal assurance from the other party that they won’t hold you to the strict contract time limits.
(2) Uncertainty of scope or performance requirements.
At the earliest opportunity, identify and clarify any points of uncertainty in the customer’s expectations (e.g. vague elements of the spec, boundaries of the scope etc etc) and confirm this with them in writing (be as specific as possible).
It is all well and good to just ‘leave the contract in the draw’, but if a dispute arises all that good will and mutual understanding will evaporate. If you have not thoroughly documented these mutually agreed departures from (or clarifications of) the contract, the other party will pull that contract out of the draw and rely on it with impunity (or you’ll be facing their own documentation of what you supposedly said you would do).
(3) Uncertainty in your ability to prove the facts you rely on should a dispute escalate.
It is a lesson that many learn the hard way – ‘document everything’. Don’t rely on verbal assurances (at the very least confirm them in writing by sending that person an email with any relevant pictures or documents attached). When a disagreement arises it will be critical that you can provide a clear and reliable documented chronology of what was said, who said it, what their authority was to say it, when it was said, and the circumstances of the communication that impacted on how it was understood.
Benefits of Effective Dispute Risk Management
The best way to address this is by having effective systems to keep you organised and make it easy to reliably document everything. This way, when a dispute does escalate you will have records of everything, and be able to quickly identify the relevant documents. This will:
(1) Allow your lawyer to more quickly advise you of the strength of your position.
(2) Reduce the legal costs involved in case preparation.
(3) Allow quick and comprehensive responses to claims (e.g. security of payment, EOT, delay etc etc).
(4) Minimise uncertainty over the strength of your position, allowing your lawyer to take a more forceful and decisive approach in negotiations.
(5) Ensure that you are able to meet the timetable set by the dispute resolution clauses.
As a result, the average cost and duration of disputes will reduce, you will establish a reputation that discourages other parties from ‘trying it on’ which will reduce the number of disputes, and you will have more time and energy to devote to growing your business.
Tools to Manage Dispute Risk
Much of the above revolves around having robust systems to document everything and keep you organised. Two project management tools that were prominent at the Sydney Build Expo this year (30-31 March 2017) were Procore and Aconex (Aconex also integrates with BidContender).
Critically, tools like these are:
(1) Cloud-based: So you won’t lose your data if you lose your device.
(2) Optimised for mobile devices: So you can document developments on the fly while on site.
(3) Simultaneously accessible by multiple parties: So you can ensure that everyone is kept on the same page as the project inevitably evolves.
(4) Designed to keep you organised: Maintaining a clear filing system and chronology of project developments so that you (and your lawyer) can quickly find those critical documents.
Remember, disputes are not resolved on the basis of what actually happened, they are resolved on what can be proved by hard evidence. The best response to that letter of demand from the other party’s lawyers is solid documentary evidence showing their case to be baseless.
Document everything, be specific, your lawyer will thank you – and most of all, you will place your self in the best possible position to protect your interests and resolve disputes economically.
Contact Us for assistance with dispute resolution and advice.