Patel: Simplifying and standardising documents both have big roles to play
Lawyers need to make consumer-facing legal documents more engaging, and regulators and industry should consider measures to ensure they are intelligible, a report has recommended.
Artificial intelligence (AI) and machine learning will be at the heart of this shift and so there need to be rules to govern its use, Amplified Global said.
Amplified was one of the businesses that took part in LawtechUK’s lawtech sandbox pilot, during which it held roundtables about the purpose and effectiveness of terms and conditions (T&Cs), the development and application of measures to assess intelligibility and to simplify documents, and the development and deployment of AI to understand consumer behaviour.
“T&Cs must do much more to fulfil their most important and legally required purpose – to inform and protect consumers,” the report said.
“In their long and complex current form, T&Cs are not often read (seemingly even by experts), and when they are, they are not easily intelligible, despite this being a key regulatory and legal requirement.”
The report said there were a variety of ways to simplify key information and make T&Cs more engaging for customers – simplifying the language; providing a shorter, simpler version alongside the base document; and using a “richer mix” of media or by standardising non-differentiated sections.
AI and machine learning meant there were now the means to assess intelligibility objectively, and regulators and industry should consider developing minimum standards or an outcome-focused regulatory approach, Amplified said.
“The requirement to ensure documents are intelligible is a key legal requirement. However, lawyers do not write documents that are suited to the purpose, industry does not demand better for its customers, and the requirements are not measured or enforced by regulators.”
But AI and machine-learning techniques needed to be used in “an ethical and consumer-focused way”.
The report said: “The tools AI-driven techniques can provide are powerful, and can result in a range of positive consumer outcomes, from better and more targeted engagement by organisations ensuring customers understand their choices, rights and responsibilities to better identify and support potentially vulnerable customers.
“However, there are insufficient principles and standards in place to ensure this happens in a consumer-positive way at present.”
While they were not intended to identify specific recommendations, Amplified said four clear steps emerged: the need to develop rules for the use of AI; greater collaboration between industry, regulators and the legal profession; applying new tools to aid the consumer; and making better data available to ai developers.
Amplified itself uses natural language processing and machine learning to help customers engage with and assess lengthy, technical legal information.
Founder Minesh Patel said: “Going into the sandbox we knew there is an issue that needs addressing – that very few people engage with terms and conditions or other complex contractual documents.
“We wanted to bring stakeholders together, both industry experts and regulators, to explore why that is, and what can be done to better support and engage consumers.
“What emerged were some strong messages. It was clear that simplifying and standardising documents both have big roles to play.
“Participants agreed that AI and machine learning technologies can hugely benefit the consumer, but also that the lawtech community needs clearer guidance to ensure this happens in the right way.
“And finally, that collaboration is critical to enable access to high quality data able to drive innovation.”
There were three roundtables. One with industry, ranging from Vodafone and HSBC to the Legal Services Consumer Panel and Financial Ombudsman service; one with AI and ethics experts, including from the Law Society and Solicitors Regulation Authority; and one with regulators, such as Ofcom, the Competition and Markets Authority, Information Commissioner’s Office, as well as legal regulators.
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