Key facts
- Lawyers for former Lush CEO Andrew Gerrie have raised their litigation budget to £6.1 million.
- Disclosure fees for the AI-driven document review have increased from an estimated £500,000 to over £1.1 million.
- The legal team is exclusively using senior lawyers to train the AI model, citing risks associated with junior staff.
- A judge questioned the cost increase but ultimately accepted the senior-staff-only approach for AI training.
- The trial, concerning Gerrie's exit from Lush in 2014, is set to begin at the end of the month.
Lawyers representing Andrew Gerrie, the former chief executive of cosmetics company Lush, have significantly increased their requested litigation budget to £6.1 million ahead of a trial this month. The fees for disclosure, which involves using AI to review documents, have more than doubled from an estimated £500,000 to over £1.1 million.
Gerrie's legal team from Brown Rudnick justified the substantial cost hike by stating they would only permit senior lawyers to train the AI model. They expressed concerns that junior staff might improperly program the artificial intelligence, which is tasked with reviewing up to 30,000 disclosure documents. This approach contrasts with the typical practice of using trainee lawyers and junior associates for such tasks.
Insolvency Judge Matthew Parfitt acknowledged the sharp increase since January, remarking that it "raises eyebrows" and questioned the reliance solely on senior fee earners. However, he ultimately stated that he believed this was the "correct way of proceeding" given the risks of AI hallucinations, while also noting the "unbalanced" nature of the high costs.
The legal dispute stems from a falling out between Gerrie and current CEO Mark Constantine before Gerrie's departure in 2014. The upcoming 19-day trial will hear from seven witnesses, including Gerrie and his wife Alison Hawkesley, who remain shareholders, as well as Mark Constantine and his wife Margaret, a co-owner. A key focus will be whether Gerrie voluntarily left the company or was forced out.
The use of AI in legal proceedings has recently drawn scrutiny due to instances of 'hallucinations,' where the technology fabricates information. High-profile cases involving Pinsent Masons and Sullivan & Cromwell have highlighted these issues, leading to judicial criticism and apologies.