AI and the law

TL;DR

This paper explores how generative AI impacts legal processes, potentially reducing or increasing litigation depending on the legal area, and suggests it will accelerate tort law's evolution toward efficiency.

Contribution

It analyzes the uneven effects of generative AI on law, highlighting its dual role in reducing contract litigation but increasing tort litigation, and predicts accelerated tort law evolution.

Findings

Contracts become more complete, reducing litigation in some areas.

In tort law, litigation is likely to increase due to AI effects.

AI accelerates the evolution of tort law toward efficiency.

Abstract

I argue that generative AI will have an uneven effect on the evolution of the law. To do so, I consider generative AI as a labor-augmenting technology that reduces the cost of both writing more complete contracts and litigating in court. The contracting effect reduces the demand for court services by making contracts more complete. The litigation effect, by contrast, increases the demand for court services by a) making contracts less complete and b) reducing litigants' incentive to settle, all else equal. Where contracts are common, as in property and contract law, the change in the quantity of litigation is uncertain due to offsetting contracting and litigation effects. However, in areas where contracts are rare, as in tort law, the amount of litigation is likely to rise. Following Rubin (1977) and Priest (1977) generative AI will accelerate the evolution of tort law toward efficiency.