Legal design is a trending topic in many jurisdictions, with its contributions increasingly attaining recognition from both public and private sectors. Its simple yet groundbreaking premise is leaving behind a reality designed by legal professionals and lawmakers for themselves, while making the legal system more accessible to its users, from the public sector to companies, legal professionals, and laypeople.
Legal design unleashes empathy and the hidden creativity of professionals all around the world, combining human-centered design and the law to increase the value of legal services, in benefit of society. Instead of guessing what a client desires or using the same centuries-old standards, legal design is about carefully crafting personalized solutions, case-by-case, molding the law to the specific needs and peculiarities of each situation.
Legal information is frequently impenetrable, incomprehensible, confusing, and boring. In this sense, legal design aims not for aesthetics, but enables sound functionality within thoughtful aesthetics, balancing legal certainty and technical precision with plain language and visual communication.
It is important that people feel they are treated fairly and justly by the legal system, reinforcing the equality ideal promised by legislation, and allowing people to acquire higher awareness and control over their legal status and future possibilities.
The expression legal design was coined by Professor Colette Brunschwig, a law professor at the University of Zurich, and author of the first book on legal design, Visualisierung von Rechtsnormen, published in 2001 and containing the results of her PhD research. Years later, in 2013, Stanford University launched its Legal Design Lab, and in 2017, Margaret Hagan published Law by Design – a handbook guide that made the methodology world-famous.
After its European beginning and American outbreak, legal design gained local contours, inspired by local challenges, such as higher levels of bureaucracy, differing risk appetites and openness to innovation. Legal innovation agencies and studios, law firms and design companies are growing in collaboration and pushing the limits for higher-quality legal deliverables. Consequently, an unlimited number of cases surge altogether, while other important technological developments are on the edge of glory.
Legal design helps to solve problems by having user centrality as the starting point for problem-solving, and multidisciplinary collaboration as a way of obtaining meaningful innovation. It’s no surprise then that legal design enables the betterment of other innovation, such as artificial intelligence (AI). Legal design is, in its nature, practical, and is not a mere theory floating over the field of ideas. AI, in its turn, brings concreteness to legal design-inspired solutions.
Those information systems, which develop tasks similarly to human intelligence, and which have autonomy and are able to learn, can have positive impacts within various sectors, including financial services. Their ability to predict the future, such as consumer behavior, becomes of utmost importance in an ever-changing society.
The enlightened aspects of AI include the possibility of promoting advances for different classes of people by improving the quality of their lives. Nevertheless, its negative aspects – which cannot be ignored – include possible violations of fundamental rights, patronizing people’s lives and choices, and reproducing bias and prejudice. Hence, wisely crafted regulations are important to assure economic and creative freedom while safeguarding people’s rights, privacy, and individuality.
The COVID-19 pandemic has accelerated the adoption of AI-based solutions, and its applications can be seen across many stages. AI represents new possibilities for both consumers and companies: processes can be automated and become more efficient, products and services can be better tailored, and procedures such as loss adjustment can be accelerated.
Additionally, AI solutions developed under a legal design perspective can aggregate value to supply chains, including: product design and development; pricing; sales and distribution; and customer service, besides bringing a positive impact in productivity.
AI has been maturing, especially due to the advent of machine learning and deep-learning algorithms. In addition, big data is becoming more widely available, simultaneously increasing the computational power of technology systems. These two factors, combined, lead to more accurate AI applications.
Among others, AI makes viable: anomaly detection and fraud mitigation; speech recognition and natural language generation; recommendation engines and automated product suggestions; image and sound recognition; and automated decision-making systems.
On the other hand, legal design can provide AI programmers, designers and other professionals with plain language, ready-to-use legal content, which is easier to translate into code and transform into easily applicable and user-friendly solutions. Also, legal design-skilled professionals work better in multidisciplinary teams and can provide higher-quality insights when working among teams composed of designers, data, and AI professionals.
Considering most AI solutions’ sources are not public, and that it is not possible yet to understand why most AI-based tools behave in a certain way (the “black box” problem), legal design use can also ensure clear legal content, a transparent rationale for solutions’ adoption, and influence their design to be in the best interests of society.
A more accurate and more complete data analysis (customer and survey) can lead to better products, and new products can arise in light of an improved risk assessment (with sources such as IoT 5G devices) and fraud prevention. Prices can be optimized and personalized according to behavioral data, and a new generation of digital marketing solutions can help to boost sales and increase penetration across different regions.
Customer service is also better, by the implementation of user-friendly virtual assistants and other automated solutions, which could be available without time restrictions and provide meaningful and seamless communication. Finally, robotic process automation (RPA) could obtain data from documents and forward them to the relevant companies or public sector agencies, contributing to a higher Net Promoter Score, and AI analytics could provide diagnostic advice, whose adoption could be awarded in the form of discounts or other benefits.
Additionally, the high capacity of storage of information and processing of data and information can lead to better judicial management, in what is called Justice 4.0. Automated summons, identification of intervening parties in a case, and automated drafting of properly designed notices are some examples of how legal design and AI can add to each other to benefit the advancement of the legal system.
Further, predictive programming could be used to anticipate judicial decisions and allow for parties to build more effective litigation strategies, increasing efficiency and reducing useless lawsuits, while also fostering non-litigious postures, such as the proposals of agreements rather than a contentious stance.
Regarding financial services, there are good examples that showcase how legal design and AI combined work in practice. In Brazil, an Insurtech focused on vehicle and mobile phones insurance decided to draft its products with a human-centered focus, and dedicated a section of its website to a glossary of insurance jargon.
It also made a commitment to super-quick reimbursements – five days for mobile phone insurance and twenty days for vehicle insurance after filing a claim. It is quicker than the average 30-day deadline in Brazil. By the use of machine learning, data also becomes antifraud intelligence.
In addition, the use of an AI solution allows analysis of a request for reimbursement regarding a mobile phone insurance policy within one second) – determining if it can proceed or if a further analysis by human employees is necessary.
This encompasses receiving and interpreting the information referring to the claim, reviewing the insurance coverage to check if it is applicable, performing an antifraud analysis, and sending the payment data for the respective financial institution previously registered by the insured person.
In one situation, a Brazilian man had his mobile phone stolen while waiting for a cab at Rio de Janeiro. The process was so quick that the respective insurance indemnification was made available in his bank account within only 15 seconds! The system used by this insurer reaches a level of precision of up to 96%.
Although it is currently able to automatically approve one of every 10 reimbursement requests, in the future, it should be able to instantaneously approve 30% of them, reducing the number of cases that would demand a more-detailed analysis, and also would be able to handle vehicle insurance claims.
The combination of legal design and AI generated many benefits: this insurtech was elected among the 100 best insurtechs in the world, considering people, product and performance. It was also awarded a certification for the quality of its customer service and attained 100,000 customers in only four years. It also was the first insurtech participant of the regulatory sandbox enacted by the Brazilian Private Insurance Authority to become a regular insurer.
Examples like this can be summarized as follows: no matter how challenging the days to come, legal design and AI are ways to support people entitling legal professionals to cocreate artificial intelligence, improving the legal system, and shaping the future.
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About the Author
Anthony Charles de Novaes da Silva is a Brazilian insurance, reinsurance and private pensions attorney, and author of the first academic investigation about legal design and insurance. Contact him at anthonyavlis@hotmail.com.