Part 1 of this series examined how generative artificial intelligence, paid search advertising and sophisticated digital targeting are helping plaintiffs’ firms reach injured motorists before insurers or fleet operators can respond. For Part 2, we explore the widening chasm between how the plaintiffs’ bar and the defense are deploying AI.
Plaintiffs’ attorneys are using AI not only to make claimant acquisition faster and more scalable, but also to identify the cases with the greatest potential value, coordinate litigation strategies and increase pressure on insurers before early investigations are complete.
Defense and claims experts told Insurance Business that this is widening the technology gap between plaintiffs’ firms and the insurance defense ecosystem, where comparable tools have yet to be adopted consistently or at scale.
“The plaintiff’s bar tends to be much more agile in adapting to new tools, new environments, and even just new arguments and new approaches,” said Ashley Fetyko (pictured on the right), a senior partner at insurance defense firm Tyson & Mendes. “On the flip side, the defense, particularly insurance defense, is very slow to change.”
According to Fetyko, plaintiffs’ firms are using AI to identify potential clients and assess which claims are most likely to produce a nuclear verdict. That allows them to concentrate money, personnel and other resources on cases with the highest perceived value.
“What we hear on the plaintiffs’ side is that they are using AI to identify claims that have more value or from which they feel they can obtain a larger settlement,” said Steve Ellis (pictured on the left), vice president of liability practice at Sedgwick.
Automated tools are also helping plaintiffs’ attorneys communicate and collaborate more quickly. That can provide a significant advantage because, despite competing aggressively for clients, plaintiffs’ lawyers have shown a willingness to share tactics and information across firms.
The technological imbalance is emerging as the time available to investigate and resolve liability claims continues to contract.
Ellis described the trend as a “compressed liability lifecycle,” in which earlier attorney involvement and faster lawsuit filings give insurers less time to assess claims before formal litigation begins. Sedgwick's data shows that among bodily injury claimants who ultimately retain counsel and file suit, 70% have attorney representation in place within the first two weeks of first notice of loss.
According to Sedgwick's Summer 2026 "Liability litigation observations and trends" report, the average time from first notice of loss to the filing of a lawsuit has fallen sharply, from approximately 550 days in 2016 to around 120 days today.
Earlier filings can prevent insurers from completing the type of investigation they would ordinarily conduct before appointing defense counsel. Carriers must then bring attorneys into the process sooner, increasing defense costs earlier in the life of the claim.
AI is not the only force compressing the claims cycle. Ellis also pointed to the growing use of time-limited demands and third-party litigation funding.
External capital is disproportionately directed toward complex or serious claims with the potential for large recoveries, he said, allowing plaintiffs to sustain litigation for longer and reducing the immediate pressure to settle.
Since 2022, the use of third-party funding in auto liability claims has grown at an average annual rate of 44%, and funded litigated auto bodily injury claims run 9.6 times longer in duration, with total incurred costs 361% higher than non-funded claims. The report identifies commercial trucking, alongside retail and product liability, as generating a disproportionate share of high-severity outcomes.
The result is a difficult combination for insurers: less time to investigate at the beginning of a claim, but potentially longer and more expensive litigation once a case is underway.
Sedgwick’s data also suggests the perceived threat of a nuclear verdict may be influencing settlement behavior more broadly than the verdicts themselves. Only about 1.25% of litigated bodily injury cases reached a verdict in 2025, down from a peak of roughly 12% in 2016, according to the report. Over the past five years, verdict severity has risen at an average annual rate of roughly 3.7%, broadly in line with inflation, while settlement severity has climbed 12.6% annually over the same period, according to the report.
Artificial intelligence is also beginning to influence how cases are developed after they have been filed.
Fetyko said defense teams are seeing plaintiffs’ attorneys use generative AI to produce large volumes of discovery requests, creating what she described as an effort to “paper the defense.”
Responding to extensive discovery can lengthen litigation and increase legal expenses. In some cases, Fetyko said, the attorney responsible for the file may not be fully familiar with the information contained in subsequent AI-assisted exchanges.
Fetyko has also noted encountering similar AI-generated language across unrelated cases. “We’re definitely seeing that beyond just the case generation stage, but even in discovery,” she told Insurance Business.
Insurers and claims organizations are not ignoring the technology. Ellis said Sedgwick uses predictive analytics to identify more serious claims earlier and direct them into different workflows. The company also uses data to evaluate jurisdictions, judges and plaintiffs’ attorneys.
Available datasets can show, for example, how frequently a judge has ruled for defendants on particular motions or granted summary judgment. That information can form part of a broader risk assessment when deciding whether to settle a claim or prepare it for trial.
However, Ellis believes the two sides are generally applying AI toward different objectives. “The plaintiffs’ bar uses it to maximize its outcome,” he explained. “On the defense side, we use it primarily to improve efficiency.”
The next step for insurers will be using AI not merely to automate administrative work, but to help control indemnity costs and respond to plaintiffs’ litigation strategies. However, funding remains a significant obstacle. Defense firms must invest in systems, data and technical expertise to keep pace with the change in the litigation landscape. Ellis expects that constraint to contribute to consolidation among insurance defense firms. Larger national firms may be better positioned to finance the technology and infrastructure required to use AI for substantive litigation and claims analysis.
“There is more we can do,” he said. “We need to focus on how we can leverage AI to combat the tactics we’re seeing on the plaintiffs’ side.”
Fetyko argued that the industry also needs a more collaborative approach. Carriers, claims organizations and defense firms frequently possess useful information, but do not always share it as effectively as the plaintiffs’ bar shares tactics and intelligence.
She said AI could free claims professionals and attorneys from routine tasks, giving them more time to communicate directly with claimants, opposing counsel and jurors. Its use, however, must include safeguards for confidential information and preserve the role of human judgment and empathy.
“The AI tools that are available for the plaintiff’s bar are available for us too,” Fetyko said. “I’m concerned if the defense doesn’t begin to make the hard choice to change and to adapt. I think that we’re getting there.”
