Litigation is increasingly understood, by litigants, litigators, and litigation funders alike, as a form of asset management. A claim is an asset, and the claimant (and any funder) seeks to maximise its value, through settlement or judgment. Conversely, the defendant (and any claims insurer) seeks to minimise its potential liability.

The most successful asset managers invariably lean heavily on their experience and instincts. But they also rely on data. It would be an unusual investor in stocks or bonds who did not consult their Bloomberg terminal, to help ground their thinking in the most relevant trends, patterns and individual data points.    

In that context, it is curious that the same has not always applied to litigation. Litigators deploy considerable legal acumen. They often have a well-developed feel for how certain claims, witnesses, or arguments might fare, and for how particular judges might behave. But traditionally this has not been supplemented by the data and analytics which could calibrate, confirm or contradict a litigator’s instincts.

And yet there is a wealth of such data. And litigation is particularly ripe for this kind of analysis, because of one unique feature. Unlike stocks or bonds, the ultimate value of a claim is determined (if it fights to a conclusion) by a single person: the judge. As Ronald Dworkin observed over thirty years ago, “people often stand to gain or lose more by one judge’s nod than they could by any general act of Congress or Parliament”. And judges’ previous decisions are publicly available. That makes it possible to analyse how individual judges, or groups of judges, have behaved in the past, and to ground decision-making in that data.

And more data is available on lawyers, expert witnesses, settlements (showing which parties, and which claim types, are settling most often, and within what timeframe), and so on.

In the USA, 75% of the top 100 law firms now use analytics to inform key decisions (Financial Times, 6 February 2019: Big data: legal firms play ‘moneyball’). As James Merklinger, President, Association of Corporate Counsel Credentialing Institute, notes, “Corporates are running their legal department like businesses – corporates use data to run businesses, law firms are being forced to catch up”.

In the UK, law firms are now pioneering its use, with firms like Herbert Smith Freehills and Stewarts at the forefront. Both have partnered with Solomonic, a litigation analytics company whose first module focuses on the Commercial Court.

Alexander Oddy, HSF dispute partner, says that analytics “provide us with the base rates that allow us to think in much more precise and statistically informed ways about how we advise our clients. It has become a valuable tool. Gut instinct alone is not enough.

Julian Chamberlayne, disputes partner and head of knowledge management at Stewarts, highlights the value: “A key part of litigating successfully is making the best possible decisions on everything from tactics to personnel, from arguments to settlement or taking a case to trial. The outcome of cases is influenced by the cumulative effect of those decisions. The use of data extracted from judgments, and smart analytics derived from that data, is one more way to supplement our expertise and further enhance our innovative approach to litigation – including litigation funding”.

While there is much speculation about robot lawyers and artificial intelligence out-lawyering lawyers, in practice the analytics is far more valuable in augmenting the expertise of the litigator, allowing him or her to bring a layer of data to key business conversations and decisions, and to tailor strategy, tactics and advice by reference to what the data says about particular lawyers, experts or judges.