US appeals court upholds $114,663 legal fee award, ruling AI use alone does not prove overbilling

A federal appeals court has ruled that a law firm's use of artificial intelligence (AI) tools does not automatically mean its legal fees should be reduced. The court rejected an argument from a losing party that the technology had led to inflated legal bills. The decision by the 10th US Circuit Court of Appeals upholds a legal fee award of $114,663.11 given to defence lawyers in a trade-secrets dispute. The court said anyone challenging a legal bill must provide clear evidence of overcharging. Simply pointing out that a law firm used automated legal software is not enough. Writing for a unanimous three-judge panel, Circuit Judge Carolyn McHugh said AI can make legal research and document writing faster. However, the responsibility to prove that using the technology resulted in unreasonable charges lies with the party challenging the bill. The ruling sets an early example of how courts may deal with the use of automated tools in the legal profession. It makes clear that courts will not automatically assume that using software means lawyers have charged for too many hours.Dismissal leads to fee battleThe dispute over legal fees began with a trade-secrets lawsuit filed by Flux Drive I...