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Essay
AI & the Business Judgment Rule: Heightened Information Duty
Geneviève Helleringer
Professor Geneviève Helleringer, ESSEC Business School-Paris & Oxford University, and research member of ECGI. She is Visiting Professor of Law at Columbia Law School and Paris-Panthéon-Assas University. Her research focuses on comparative Commercial and Corporate Law.

We would like to thank the participants of the How AI Will Change the Law Symposium, cohosted by the Coase-Sandor Institute, the University of Chicago Law Review Online, and Oxford Business Law Blog, for their helpful comments.

Florian Möslein
Florian Möslein is the Director of the Institute for Law and Regulation of Digitalisation and Professor of Law at the Philipps-University Marburg, where he teaches Contract Law, Corporate Law and Securities Regulation.

We would like to thank the participants of the How AI Will Change the Law Symposium, cohosted by the Coase-Sandor Institute, the University of Chicago Law Review Online, and Oxford Business Law Blog, for their helpful comments.

Artificial intelligence (AI) has the potential to alter the interpretation of the duties of care, skill, and diligence. As these duties form the foundation for the BJR and equivalent provisions, the development of AI is also expected to impact the BJR. There is a broadening importance, in an increasingly data-driven business environment, of the requirement to gather sufficient information before making a decision and to use information in a valid manner. Changes are both quantitative (how much information to collect) and qualitative (which types of information to collect). The changes also relate to the methods of decision-making, including the role of measures and statistics over intuition.

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Essay
How Artificial Intelligence Will Shape Securities Regulation
Gabriel V. Rauterberg
Professor of Law, University of Michigan

My views on these subjects owe much to my collaborators, especially Michael Barr, Megan Shearer, and Michael Wellman, with whom I have been studying the behavior of algorithmic traders in financial markets, and Howell Jackson, with whom I have been presenting on social media and capital markets at PIFS-IOSCO’s trainings for securities regulators. All errors are my own. Thanks to the participants at the University of Chicago’s Symposium on “How AI Will Change the Law” for helpful comments, and to the editors of the University of Chicago Law Review for their helpful insights.

This Essay argues that the increasing prevalence and sophistication of artificial intelligence (AI) will push securities regulation toward a more systems-oriented approach. This approach will replace securities law’s emphasis, in areas like manipulation, on forms of enforcement targeted at specific individuals and accompanied by punitive sanctions with a greater focus on ex ante rules designed to shape an ecology of actors and information.

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Essay
A Story of Two Holy Grails: How Artificial Intelligence Will Change the Design and Use of Corporate Insolvency Law
Felix Steffek
Felix Steffek is Professor of Law at the University of Cambridge. He serves as Director of the Centre for Corporate and Commercial Law (3CL) and holds a JM Keynes Fellowship in Financial Economics. He is Global Distinguished Professor of Law at the University of Notre Dame, SGRI Visiting Professor at Singapore Management University, and Senior Member of Newnham College.

The author is grateful for the very helpful comments received at the conference on ‘How AI Will Change the Law’ organized by the University of Chicago Coase-Sandor Institute for Law and Economics, the University of Chicago Law Review, and the Oxford Business Law Blog, in particular from Tony Casey who contributed a formal comment.

This Essay explores the two holy grails of AI and the law: predicting court decisions and predicting contracts. While there is some overlap between the two, because in order to draft contracts one needs to know the law, both issues can be functionally distinguished. These two areas, and their importance in the context of increasing AI development, are explored more deeply within the context of corporate insolvency law.

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Essay
Algorithmic Pricing, Anticompetitive Counterfactuals, and Antitrust Law
Edward M. Iacobucci
Professor and TSE Chair in Capital Markets, Faculty of Law, University of Toronto.

The author wishes to thank Abdi Aidid, Ben Alarie, Francesco Ducci, Anthony Niblett, Tom Ross, and Michael Trebilcock and participants at the How AI Will Change the Law Symposium at the University of Chicago for helpful comments and conversations.

This Essay focuses largely on structural responses to AI pricing in antitrust, outlining the bulk of its argument in the context of merger law but also considers monopolization law and exclusionary conduct. It argues that the relationship between the strictness of the law and the sophistication of AI pricing is not straightforward. In the short run, a stricter approach to merger review might well make sense, but as AI pricing becomes more sophisticated, merger policy ought to become less strict: if anticompetitive outcomes are inevitable with or without a merger because of highly sophisticated AI pricing, antitrust interventions to stop mergers will not affect pricing and instead will create social losses by impeding efficient acquisitions. This Essay considers similar questions in the context of monopolization. It concludes by observing that the rise of AI pricing will strengthen the case for antitrust law to shift its focus away from high prices and static allocative inefficiency and toward innovation and dynamic efficiency.

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Essay
Causal AI—A VISOR for the Law of Torts
Gerhard Wagner
Dr. Gerhard Wagner is the Chair of Civil Law, Commercial Law, and Law and Economics at Humboldt University of Berlin.

He has previously served as visiting professor at University College London, the University of Chicago, and Université Paris-Panthéon-Assas, as well as a visiting scholar at the New York University School of Law. His research focuses include torts, private law theory, and dispute resolution.

Causal AI is within reach. It has the potential to trigger nothing less than a conceptual revolution in the law. This Essay explains why and takes a cautious look into the crystal ball. Causation is an elusive concept in many disciplines—not only the law, but also science and statistics. Even the most up-to-date artificial intelligence systems do not “understand” causation, as they remain limited to the analysis of text and images. It is a long-standing statistical axiom that it is impossible to infer causation from the correlation of variables in datasets. This thwarts the extraction of causal relations from observational data. But important advances in computer science will enable us to distinguish between mere correlation and factual causation. At the same time, artificially intelligent systems are beginning to learn how to “think causally.”

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Essay
Automation Rights: How to Rationally Design Humans-Out-of-the-Loop Law
Orly Lobel
Orly Lobel is the Warren Distinguished Professor of Law and Director of the Center for Employment and Labor Policy (CELP) at the University of San Diego.

She graduated from Tel-Aviv University and Harvard Law School. Named as one of the most cited legal scholars in the United States, and specifically the most cited scholar in employment law and one of the most cited in law and technology, she is influential in her field. Professor Lobel has served on President Obama’s policy team on innovation and labor market competition, has advised the Federal Trade Commission (FTC), and has published multiple books to critical acclaim. Her latest book, The Equality Machine, is an Economist Best Book of the Year.  

This Essay argues for the development of more robust—and balanced—law that focuses not only on the risks, but also the potential, that AI brings. In turn, it argues that there is a need to develop a framework for laws and policies that incentivize and, at times, mandate transitions to AI-based automation. Automation rights—the right to demand and the duty to deploy AI-based technology when it outperforms human-based action—should become part of the legal landscape. A rational analysis of the costs and benefits of AI deployment would suggest that certain high-stakes circumstances compel automation because of the high costs and risks of not adopting the best available technologies. Inevitably, the rapid advancements in machine learning will mean that law soon must embrace AI; accelerate deployment; and, under certain circumstances, prohibit human intervention as a matter of fairness, welfare, and justice.

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Response
Opening Up Intervention to Check Agency Costs
Stephanos Bibas
Stephanos Bibas is a judge on the U.S. Court of Appeals for the Third Circuit and a Senior Fellow at the University of Pennsylvania Law School.

He thanks his clerks Nathan Pinnell and Isabella Soparkar for outstanding research assistance.

Professor Monica Haymond’s Intervention and Universal Remedies article invites scholars to focus on the distinctive ways that public law litigation plays out in practice. This Essay takes up her challenge. By questioning common assumptions at the core of structural-reform litigation, this Essay explains the dangers of consent decrees, settlements, and broad precedents. It then goes on to argue that intervention is an important check on these risks, and should be much more freely available in structural reform cases.

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Essay
The Law of AI is the Law of Risky Agents Without Intentions
Ian Ayres
Oscar M. Ruebhausen Professor, Yale Law School.
Jack M. Balkin
Knight Professor of Constitutional Law and the First Amendment, Yale Law School.

 Harran Deu provided helpful research assistance.

A recurrent problem in adapting law to artificial intelligence (AI) programs is how the law should regulate the use of entities that lack intentions. Many areas of the law, including freedom of speech, copyright, and criminal law, make liability turn on whether the actor who causes harm (or creates a risk of harm) has a certain intention or mens rea. But AI agents—at least the ones we currently have—do not have intentions in the way that humans do. If liability turns on intention, that might immunize the use of AI programs from liability. We think that the best solution is to employ objective standards that are familiar in many different parts of the law. These legal standards either ascribe intention to actors or hold them to objective standards of conduct.

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Essay
AI Judgment Rule(s)
Katja Langenbucher
Katja is a law professor at Goethe-University, Frankfurt; member of Leibniz Institute SAFE; affiliated professor at SciencesPo, Paris; and visiting faculty at Fordham Law School.

This piece has profited enormously from feedback during the University of Chicago Law School’s workshop on “How AI Will Change the Law.” I would like to thank Stephen Bainbridge and Martin Gelter for enlightening me with expert input in the context of the U.S. business judgment rule. Needless to say, all remaining errors are mine.

This Essay explores whether the use of AI to enhance decision-making brings about radical change in legal doctrine or, by contrast, is just another new tool. It focuses on decision-making by board members. This provides an especially relevant example because corporate law has laid out explicit expectations for how board members must go about decision-making.

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Essay
Game Over: Facing the AI Negotiator
Horst Eidenmüller
Statutory Professor for Commercial Law at the University of Oxford and Professorial Fellow of St. Hugh’s College, Oxford.

This Essay is based on my contribution to the University of Chicago Law School symposium on “How AI Will Change the Law” (April 12–13, 2024). I should like to thank the conference participants for their feedback. I am particularly grateful to Omri Ben-Shahar, Genevieve Helleringer, and Klaus Schmidt for detailed comments and suggestions.

AI applications will put an end to negotiation processes as we know them. The typical back-and-forth communication and haggling in a state of information insecurity could soon be a thing of the past. AI applications will increase the information level of the parties and drastically reduce transaction costs. A quick and predictable agreement in the middle of a visible bargaining range could become the new normal. But, sophisticated negotiators will shift this bargaining range to their advantage. They will automate negotiation moves and execute value-claiming strategies with precision, exploiting remaining information asymmetries to their advantage. Negotiations will no longer be open-ended communication processes. They will become machine-driven chess endgames. Large businesses will have the upper hand in these endgames.

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Essay
Holding AI Accountable: Addressing AI-Related Harms Through Existing Tort Doctrines
Anat Lior
Anat Lior is an assistant professor at Drexel University’s Thomas R. Kline School of Law, an AI Schmidt affiliated Scholar with the Jackson School at Yale, and an affiliated fellow at the Yale Information Society Project. Her research focuses on Artificial Intelligence and its interaction with tort law, insurance law, and antitrust law. She commonly confronts issues such as AI regulation and policy, AI liability, and insurance as applied to emerging technologies.

She would like to thank Asaf Lubin, Jessa Feiler, and the participants of “How AI Will Change the Law” symposium for their helpful comments.

This paper examines the distinct features of artificial intelligence (AI) and reaches a broader conclusion as to the availability and applicability of first-order tort rules. It evaluates the accuracy of the argument that AI is similar in essence to other emerging technologies that have entered our lives since the First Industrial Revolution and, therefore, does not require special legal treatment. The paper will explore whether our current tort doctrines can serve us well even when addressing AI liability.

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Essay
Tax Law and Flexible Formalizations
Sarah B. Lawsky
Howard Friedman '64 JD Professor of Law, Northwestern Pritzker School of Law.

Thanks to Joshua Blank, Erin Delaney, Michelle Falkoff, and Denis Merigoux for helpful conversations and for comments on earlier drafts.

Changing technologies render tax law’s intricacy legible in new ways. Advances in large language models, natural language processing, and programming languages designed for the domain of tax law make formalizations, or “representation[s] of [ ] legislation in symbols[ ] using logical connectives,” of tax law that capture much of its substance and structure both possible and realistic. These new formalizations can be used for many different purposes—what one might call flexible formalizations. Flexible formalizations will make law subject to computational analysis, including creating automated explanations of the analysis and testing statutes for consistency and unintended outcomes. This Essay builds upon existing work in computational law and digitalizing legislation.