Artificial Intelligence is now embedded within many organisations. Employees are using AI to draft emails, summarise reports, review contracts and even obtain preliminary legal guidance.
Whilst the efficiency benefits are obvious, businesses are increasingly overlooking a more important question:
Could the use of AI accidentally expose confidential information?
The Hidden Risk
Most organisations focus on whether AI produces accurate results. Far fewer consider what happens to the information being entered into these systems.
Commercially sensitive information may include:
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Legal advice
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Contract negotiations
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Regulatory investigations
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Employee disputes
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Financial information
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Customer data
Once uploaded into certain AI platforms, businesses may lose control over how that information is stored and processed.
The consequences can extend far beyond simple confidentiality concerns.
Why This Matters During a Dispute
When litigation arises, businesses often assume that all communications relating to lawyers and legal advice are automatically protected. That assumption can be dangerous. English law only protects legal privilege where specific requirements are met.
One of the most important is confidentiality. If confidentiality is lost, privilege may be lost too. This creates an obvious concern where legal advice, witness evidence or litigation documents are uploaded into public AI tools.
Four Common AI Mistakes We Are Seeing
1. Uploading Legal Advice for Summarisation
Employees frequently paste legal advice into AI tools and ask for a summary or action plan. Whilst convenient, this may create arguments that confidentiality has been compromised.
2. Using AI During Internal Investigations
Businesses increasingly use AI to review employee complaints, disciplinary matters and regulatory issues. Without proper safeguards, highly sensitive information may be exposed.
3. AI - Assisted Witness Evidence
Courts are becoming increasingly concerned about the use of AI in witness statements. Witness evidence must reflect the witness's own recollection and account, not content generated by technology.
4. Blind Reliance on AI Legal Research
Recent cases have highlighted the dangers of AI-generated authorities and fabricated legal citations. AI can be a useful research tool, but it should never replace independent verification.
What Are the Courts Saying?
The judiciary has repeatedly acknowledged that AI presents both opportunities and risks. Recent guidance has warned against placing confidential information into public AI systems and highlighted the potential dangers of relying upon AI-generated legal content without verification. AI can assist legal work, but responsibility remains with the human user.
Practical Governance for Businesses
Businesses should now be treating AI governance in the same way they treat cyber security or data protection. Key considerations include:
✓ AI usage policies
✓ Employee training
✓ Restrictions on uploading confidential documents
✓ Approval processes for high-risk use
✓ Verification procedures for AI-generated outputs
✓ Regular compliance reviews
Organisations that fail to implement these safeguards may find themselves exposed to unnecessary legal, regulatory and commercial risk.
Looking Ahead
The law surrounding AI continues to evolve at pace. What is clear, however, is that traditional legal principles such as confidentiality, privilege and professional responsibility have not disappeared simply because new technology exists. Businesses that embrace AI responsibly are likely to benefit significantly. Those that do not may discover that the greatest risk posed by AI is not what it creates, but what it inadvertently reveals.
How Imperia Law Can Help
Our solicitors help businesses navigate emerging legal risks associated with technology, governance and regulatory compliance.
Whether you are implementing AI systems, reviewing internal policies or assessing legal risk exposure, we provide practical and commercially focused advice designed to protect your business whilst supporting innovation.