AI Driving Rise In Low Merit Legal Claims Against UK Businesses

New research from Irwin Mitchell reveals that more than a third of UK businesses are facing a surge in AI generated low merit legal claims - driving up costs, draining management time and pushing data privacy risks to the top of their litigation concerns.

Drawing on a survey of more than 80 senior in-house lawyers, the research highlights the key issues currently facing legal teams, including rising complaint volumes, cyber risk and growing pressure on resources.

Key findings include

• 35% of in‑house legal teams say they are seeing an increase in AI‑generated claims, particularly from customers.

• 55% rank data‑protection and privacy violations as the most significant AI‑related litigation risk to their organisation.

• 69% report rising cyber insurance premiums; 67% are expanding cyber cover or revisiting liability limits.

Commenting on the findings, Katie Byrne, Head of Commercial Dispute Resolution at Irwin Mitchell, said: 

“Our research shows in‑house teams are being hit by a tsunami of AI‑generated, low‑merit claims. Many are long, legalistic, and often built from templates. Businesses say they don’t’ stand up, but they absorb time and budget, forcing them to divert spend into cyber cover and claims handling.”

Despite the volume challenge, the research also finds legal teams are turning AI to their advantage in litigation workflows: 64% already use AI tools to streamline internal processes such as disclosure and document review, while 51% have introduced internal guidelines for AI use in litigation contexts.

Katie added: “Boards shouldn’t panic, they should prepare. The immediate priorities we’re seeing are clear governance for AI use, staff training to avoid data‑leakage, and practical triage to separate credible claims from AI‑padded complaints. At the same time, the smart move is to deploy AI in disclosure and early case assessment to regain the efficiency edge.” 

The research, which was conducted with legal industry publication The Lawyer, highlights a broad range of legal pressures facing UK businesses. 

Cyber related risks were cited most frequently (35%), followed by supply chain disruption (21%) and regulatory divergence (17%), while data privacy and cyber litigation emerged as the leading areas of legal exposure (32%). Environmental and greenwashing claims were identified as the most prominent ESG concern (33%), with nearly half of businesses (48%) saying they now have clear processes in place to manage ESG related risks. 

Many businesses also appear to be taking a more pragmatic view of litigation, with 69% describing it as an operational necessity or strategic investment rather than a last resort. However, uncertainty over outcomes, pressure on internal resources and time constraints continue to influence decision-making.

Highlighting a possible lack of understanding about alternative litigation funding, more than half of respondents (52%) said they use alternative litigation funding at least occasionally, although complexity, cost and concerns around control remain key considerations.

Methodology

The research cmbines a quantitative survey of 81 in‑house legal leaders (General Counsel, CLOs and senior litigation decision‑makers) and 17 qualitative interviews across multiple sectors. Fieldwork and interviews were conducted in collaboration with The Lawyer magazine. Respondents were predominantly UK‑headquartered organisations (84%).