Executive Summary
- The Brazilian supplier should offer the hypothetical English firm an assistant for its own ordinary commercial-contract work. The firm should retain client instructions, legal judgment and release of advice. English law reserves specified activities, rather than all legal advice; the actual documents and functions determine whether authorisation is required. (Legal Services Act 2007, ss 12–14 and Sch 2.)
- Solicitor review must involve competent people with time, source access and authority to reject outputs. The firm remains responsible for supervision, confidentiality and client information, while the supplier remains answerable for its contractual and statutory duties. Managed review by supplier staff requires a fresh assessment in both countries. (SRA Codes of Conduct, individual paras 3.2, 3.5 and 6.3; firms paras 2.3 and 4.4; Lei nº 8.906/1994, arts 1, 3 and 16.)
- Confidential processing can support a limited disclosure of existing privileged advice. It cannot make every uploaded contract or generated answer privileged. Client information and authority must address the actual foreign access and purpose; neither a generic AI clause nor a privacy consent resolves every issue. (Jet2 [2020] EWCA Civ 35, [96], [107]–[108]; Berezovsky v Hine [2011] EWCA Civ 1089, [27]–[32]; SRA individual Code, paras 6.3 and 8.6.)
- UK hosting does not remove the transfer created by access for a separate Brazilian supplier. The firm needs a valid UK transfer route, a proportionate assessment of protection after transfer and the required processing terms. Brazil is outside the current UK adequacy arrangements. (UK GDPR, arts 28, 44A, 45A and 46.)
- Brazilian processing also engages Brazil's General Data Protection Law (LGPD). A later disclosure from Brazil to the UK or another country requires its own directional assessment. The Brazilian data regulator's ANPD standard clauses preserve Brazilian law and courts for their disputes, which an English master agreement must respect. (LGPD, arts 3 and 33; Resolução CD/ANPD nº 19/2024, Annex I, arts 8–9, and Annex II, cl 24.)
- Client-content training should be disabled by contract and operation. Any later improvement project needs a separate assessment of actual purposes, permissions, data protection and intellectual property. Customer silence cannot supply rights the firm does not possess. (UK GDPR, arts 5, 6 and 8A; LGPD, arts 6–8; Copyright, Designs and Patents Act 1988, ss 16–17 and 29A.)
- Procurement should turn the legal duties into verifiable controls over sources, access, customer separation, model changes and incidents. Supplier promises should include meaningful remedies, suspension and exit. Caps and insurance need to match the allocated risks; they cannot remove professional duties or statutory claimant rights. (UK GDPR, arts 28, 32 and 82; Unfair Contract Terms Act 1977, ss 2, 3 and 11.)
- A pilot should begin with synthetic or properly cleared material and progress to live documents only after the required permissions and transfer work. Automated client-facing advice, substantive supplier legal analysis and new countries or data uses require fresh decisions before release. Human approval must remain effective throughout the service. (SRA individual Code, paras 3.2 and 3.5; UK GDPR, arts 22A–22C and 35.)
The firm should control the client work
The supplier should contract with the law firm to support the firm's own legal service. The client should continue to instruct the firm, which selects the documents, defines the review and decides what advice leaves the office. This allocation gives the supplier a defined enterprise product without presenting it as the client's solicitor.
The proposed tool flags contract provisions, suggests wording and retrieves the firm's approved precedents. Its Brazilian support team may inspect documents when investigating errors. The supplier also seeks permission, by default, to improve its product using uploaded material. These operations need separate treatment because a permission to troubleshoot one matter does not necessarily authorise using its documents for other customers.
For the initial offering, the firm should control its precedent collection, permitted users, matter access and release of outputs. Supplier personnel should provide technical support within approved tickets. The service description should exclude independent legal advice to the firm's clients and identify document types outside the agreed scope. These are recommended changes to the proposed arrangement, rather than existing safeguards.
The firm's responsibility does not justify exempting the supplier from all consequences. The supplier should undertake to provide the agreed access controls, retrieval restrictions, service quality and incident assistance. The firm should undertake to supply authorised material, configure the permitted use and conduct competent legal review. SRA firm Code paragraph 2.3 preserves accountability for contractors; UK GDPR Article 28 separately requires enforceable processing obligations. Each party therefore needs obligations it can perform and evidence.
Actual functions determine the professional boundary
Ordinary commercial-contract analysis does not automatically require an English reserved-activity authorisation. Section 12 of the Legal Services Act 2007 distinguishes six reserved activities from the broader category of legal activities. The reserved categories include litigation, rights of audience, specified instruments, probate, notarial activities and administering oaths. Entitlement depends on authorisation or exemption for the particular activity. (Legal Services Act 2007, ss 12–14 and Sch 2.)
The description “contract review” is too broad to settle that question. Schedule 2 paragraph 5 reaches specified land transactions and instruments; a document's title does not resolve its treatment. A tool restricted to ordinary commercial agreements can avoid many reserved functions. A service that prepares relevant conveyancing instruments or conducts litigation requires a different assessment. Separate regulated fields, including immigration advice, also have their own restrictions. (Legal Services Act 2007, s 13(4), Sch 2, paras 4–5.)
A managed service deserves closer scrutiny because supplier staff may undertake legal tasks themselves. The Court of Appeal has confirmed that an unauthorised person can perform litigation tasks for an authorised individual who retains formal and professional responsibility. The authorised individual must exercise the required direction, management, supervision and control. The decision permits genuine supervised assistance; its reasoning does not authorise independent reserved practice followed by nominal approval. (CILEX and others v Mazur and others [2026] EWCA Civ 369 Rev 1, [25]–[27], [187](v)–(vii).)
That decision concerns litigation and does not resolve every reserved activity or Brazilian professional rule. The initial product should avoid relying on a contested description of delegated litigation. If the supplier later adds managed work, the parties should identify who accepts instructions, selects legal positions, controls deadlines and decides whether work is complete. The contract, user permissions and actual supervision must give the same answer. The SRA's effective-supervision guidance, updated on 12 June 2026, addresses supervision outside employment and the review of AI-assisted work.
Brazil presents a separate origin-country constraint. Legal consultancy, advisory work and legal direction fall within the activities reserved by Lei nº 8.906/1994. Articles 3–4 address professional qualification and unauthorised acts, while articles 15–16 restrict the organisation of legal practices. A technology company cannot assume it can add substantive legal advice as an ordinary software feature. Technical troubleshooting and supplier staff deciding a client's legal position require different treatment. (Lei nº 8.906/1994, arts 1(II), 3–4 and 15–16.)
English qualifications do not alone authorise someone to practise from Brazil. OAB Provimento nº 91/2000 requires authorisation for foreign-law consultants and limits their permitted work. The managed variant therefore needs a review of staff qualifications, entity structure and the law on which staff advise. An English solicitor's later review does not itself answer those Brazilian questions. (Provimento nº 91/2000, arts 1 and 3.)
Professional review requires time and authority
The firm must give its reviewers enough competence, information and time to assess the generated work. Individual Code paragraphs 3.2 and 3.5 require competent service and effective supervision. Firm Code paragraphs 2.1, 2.3 and 4.4 require appropriate systems and accountability. A workflow that rewards immediate acceptance while withholding the underlying source would undermine that allocation.
The reviewer should be able to inspect the relevant contract passage, identify the precedent used and check legal authorities directly. The tool should distinguish suggested wording from propositions supported by retrieved sources. A genuine citation may still concern the wrong jurisdiction, date or issue. The SRA's warning notice of 17 August 2026 requires lawyers to check that authorities exist, are relevant and support the proposition advanced. Review must also address the commercial instruction and the effect of the proposed change.
The supplier should preserve source identifiers and model versions so the firm can investigate an error. The firm's approval process should record who accepted material changes and why an unusual result was escalated. These controls are recommended ways to perform the legal duties; the SRA does not prescribe one universal interface or testing score. Licentium's guide to contract drafting with AI provides related guidance on checking drafting against its intended meaning.
Professional responsibility also affects pricing and sales claims. The firm must explain its charges and service accurately. The supplier should not describe the product as eliminating professional review while allocating that review to the customer in its contract. The firm's marketing must remain accurate and must explain relevant regulatory status and protections. (SRA individual Code, paras 8.6–8.11.)
Client authority must match the disclosure
The firm should explain material features of the proposed service before relying on authority to disclose client information. Brazilian human access, external model processing and a proposed secondary use can matter to the client's decision. Individual Code paragraph 8.6 requires understandable information about the service and how it will be handled. Paragraph 6.3 protects current and former clients' confidential affairs unless disclosure is required or permitted by law or the client consents.
This does not create a universal requirement for a separate signed AI consent for every software operation. The firm must assess its retainer, existing authority, the information involved and the proposed recipient and purpose. The SRA's confidentiality guidance explains why broad advance language can be insufficient for a later specific disclosure. Its lawtech guidance asks firms to consider whether standard client terms adequately address third-party access.
For this service, the client explanation should describe the purpose of the tool, the firm's review and the relevant external access. Where existing authority does not cover disclosure, the firm should obtain specific informed authority before uploading. A client who permits support access to resolve an error has not necessarily permitted the supplier to reuse negotiations for general model improvement. The firm should offer a different workflow where the necessary authority is unavailable. (SRA individual Code, paras 6.3 and 8.6; SRA, Confidentiality of client information, section on disclosure with consent.)
Client authority is separate from consent under data-protection law. A corporate client cannot provide every employee's, counterparty's or witness's data-subject consent merely by signing the retainer. Processing may instead rely on another applicable lawful basis. The firm must identify that basis and provide the required information, rather than treating a contractual approval as a universal privacy permission. (UK GDPR, arts 6, 13–14; LGPD, arts 7–8.)
Confidentiality and privilege protect different things
The firm should protect confidential documents while assessing privilege communication by communication. A contract can restrict disclosure and use, but it cannot determine a court's decision on privilege. Legal advice privilege generally concerns confidential lawyer–client communications for the dominant purpose of legal advice. A pre-existing commercial contract does not become privileged merely because it is sent to a solicitor. (Civil Aviation Authority v R (Jet2.com Ltd) [2020] EWCA Civ 35, [35], [96], [107]–[108].)
The distinction matters within a single upload. The agreement under review, the solicitor's annotations and a client message explaining litigation concerns can have different status. Information generated by a third party to help a lawyer does not automatically qualify for legal advice privilege. Advice supplied by a nonlawyer professional also does not acquire that protection simply because it concerns law. Litigation privilege has separate conditions and cannot be assumed for routine commercial work. (Jet2, [45]–[48]; R (Prudential plc) v Special Commissioner of Income Tax [2013] UKSC 1, [17]–[19], [51]–[52].)
Existing privileged advice can be disclosed for a limited purpose without a general waiver. The Court of Appeal in Berezovsky v Hine required attention to the circumstances and the restrictions communicated or reasonably understood. Applying that principle, defined confidential processing, controlled recipients and prohibited secondary use support a limited-purpose explanation. They do not guarantee that every AI interaction preserves privilege. Berezovsky concerned disclosure of litigation material, rather than approval of a software architecture. (Berezovsky v Hine [2011] EWCA Civ 1089, [27]–[32].)
The adverse AI warning must also be faced. In UK and R (Munir) v Secretary of State for the Home Department, the Upper Tribunal stated that the public uploading it described breached client confidentiality and waived legal privilege. Paragraph 21 expressly distinguished closed tools that do not publicly disclose information. The judgment arose in the Tribunal's supervision of representatives and did not decide a contested privilege claim involving a restricted enterprise processor. Its warning reinforces the need to examine actual disclosure; product branding, paid status and software licensing labels cannot establish safety. ([2026] UKUT 81 (IAC), [21], [60].)
The recommended agreement should restrict access to people who need it for the defined service, bind subprocessors and prohibit unauthorised onward use. Support tickets should contain the minimum necessary client material. The supplier should notify the firm of disclosure demands where lawful and assist with appropriate objections. Privilege clauses should preserve available rights and procedures without promising that a court must recognise privilege. The firm should exclude material from the service where its particular privilege or confidentiality position cannot support the proposed access.
Allocate data roles for each operation
The firm will ordinarily control why client personal data are used for its legal work. Under the UK General Data Protection Regulation (UK GDPR), the supplier can act as a processor for storage, inference and retrieval only where it processes those data on the firm's instructions. A processor handles data on behalf of a controller; a controller determines purposes and essential means. The parties' labels cannot replace that factual test. (UK GDPR, art 4(1), points (7)–(8), and art 28(10).)
The parties should map document ingestion, hosting, inference, precedent retrieval, support, logs, backups and deletion. The map must identify each entity, location, recipient and purpose. Billing contacts may involve the supplier's own controller activity. Security records need their own field and purpose analysis. A foundation-model provider that retains prompts for its own development cannot be assumed to perform only the firm's instructed processing.
Disabling training helps establish the proposed processor relationship but is not sufficient by itself. A provider may predetermine important purposes and means even within a closed-access product. The UK regulator's published position on generative-AI supply chains raises joint-control concerns in those circumstances. Joint control depends on actual shared decisions and engages Article 26; independent supplier improvement usually requires assessment as a separate controller purpose. (UK GDPR, art 4(1), point (7), and arts 26 and 28(10); Information Commission, Allocating controllership across the generative AI supply chain.)
The firm needs a lawful basis for the personal data it processes. Legitimate interests may support necessary, proportionate processing after balancing affected individuals' rights. Article 6(1)(b) concerns a contract with the data subject; the firm's contract with the supplier does not itself satisfy that condition for everyone named in a document. Legal obligations and legal claims require their own applicable conditions. The firm must also address transparency, minimisation, accuracy and retention. (UK GDPR, arts 5–6 and 13–14.)
Confidential commercial information is not automatically special-category personal data. Article 9 applies to defined categories, including health and certain belief or identity information. Criminal-offence data have a separate Article 10 regime. If documents contain special-category or criminal-offence personal data, the firm must identify the additional condition and any relevant Data Protection Act 2018 requirements. A legal-claims condition cannot become a general licence for product training. (UK GDPR, arts 9–10; Data Protection Act 2018, ss 10–11 and Sch 1, para 33.)
A data protection impact assessment is legally required where the planned processing is likely to create high risk. The recommended procurement process should require a documented assessment before this product handles live client documents. That is a deliberate deployment condition, rather than a claim that every use of AI automatically triggers Article 35. Unresolved high residual risk can require prior consultation under Article 36. The supplier must provide enough technical information for the firm to make that decision. (UK GDPR, arts 28(3)(f), 35–36.)
The contract should also support individuals' rights and the controller's complaints process. Section 164A of the Data Protection Act 2018 requires controllers to facilitate complaints, acknowledge them within 30 days and investigate without undue delay. Supplier assistance needs to cover locating relevant records, explaining processing and implementing justified corrections or deletion. Confidentiality and privilege exemptions require their own conditions; they do not authorise undisclosed reuse. (UK GDPR, arts 13–14 and 28(3)(e); Data Protection Act 2018, s 164A and Sch 2, para 19.)
Brazilian access needs a UK transfer route
The firm should treat access by the separate Brazilian supplier as a restricted international transfer. Data can be made available abroad without moving the hosting server. The same-entity employee distinction does not remove a disclosure to another company's support staff. The UK regulator's transfer guidance expressly addresses remote access and the identity of the recipient.
The current statutory gateway is UK GDPR Article 44A. It requires compliance with the transfer rules and the other applicable GDPR duties. A transfer may rely on adequacy under Article 45A, appropriate safeguards under Article 46 or a specific Article 49 derogation. Brazil is not covered by the current UK adequacy arrangements. Routine support should therefore be designed around safeguards rather than exceptional derogations. EU or Brazilian adequacy decisions do not supply a missing UK decision.
For this bilateral service, the proposed route is the current International Data Transfer Agreement, accompanied by a complete Article 28 processing agreement. The IDTA's tables must identify the real parties, data, purposes and security measures. Clause 1.4 expressly leaves relevant Article 28 terms to the linked agreement. Where the supplier already uses the EU standard clauses, the current UK Addendum is an alternative if the correct module and information are completed. EU clauses alone do not satisfy the UK route. (IDTA, version A1.0, Tables 1–4 and cl 1.4; UK Addendum, version B1.0, Table 2 and Part 2.)
Signing clauses is only part of the test. Article 46 requires the exporter, acting reasonably and proportionately, to consider whether protection after transfer will not be materially lower than the UK standard. The assessment considers the circumstances, including the nature and volume of the data, and protection as a whole. It must address relevant access by public authorities and practical enforceability. The supplier should provide evidence about its operations, subprocessors and ability to comply. (UK GDPR, art 46(1A), (6)–(8).)
The parties should reduce unnecessary access through permissions, limited support sessions, local-copy controls and encryption. Encryption in storage does not prevent disclosure to an authorised support user who can read the document. Where the actual transfer cannot meet the test after additional safeguards, the firm must change the operation or withhold that access. UK hosting with support unable to see client content is a possible redesign only if the technical facts support it.
Onward disclosures need equal attention. The initiating party and its legal role determine the applicable UK duties, while the IDTA imposes contractual restrictions on the importer. The agreement should identify model, hosting and support providers and control changes in their locations. The Brazilian supplier's direct exposure to UK GDPR Article 3 depends on its own activities; serving a UK business does not automatically settle that territorial test. The firm's exporter obligations and the supplier's contractual promises still require performance. (UK GDPR, arts 3, 28 and 44A–46; IDTA, cls 8–9, 16–17.)
Brazil has its own processing and export rules
The supplier should apply the LGPD to personal-data processing undertaken in Brazil. Article 3(I) addresses processing in Brazilian territory, and access is included within the statutory concept of processing. ANPD Resolution 19/2024 expressly addresses foreign-origin data processed there. The British origin of the documents therefore does not itself remove the Brazilian duties. (LGPD, arts 3 and 5(X); Resolução CD/ANPD nº 19/2024, Annex I, arts 7–8.)
The foreign-origin exception is narrower than an ordinary support service. The transit exception requires the absence of communication or sharing with a Brazilian processing agent. A return-only exception depends on further conditions, including an ANPD adequacy decision that expressly exempts that situation and continued application of the origin country's law. The ANPD's adequacy decision for the EU and EEA does not include the UK. Support staff reading client documents cannot rely on the pure-transit exception. (Resolution 19/2024, Annex I, art 8(1); Resolução nº 32/2026, arts 1–2.)
The supplier should act as an operator for the firm's instructed processing where the actual relationship supports that role. It must follow lawful instructions, keep required processing records and implement appropriate technical and administrative security. The controller must verify compliance with its instructions and the applicable data-protection rules. Supplier use for independent training changes the purpose and can change its role. (LGPD, arts 5(VI)–(VII), 6–7, 37, 39 and 46–47.)
Each direction of movement requires its own analysis. The firm's disclosure into Brazil is not automatically a Brazilian export. If the supplier later sends or makes personal data available from Brazil to the UK controller or another foreign provider, the Brazilian transfer rules must be applied to that operation. Resolution 19 requires both a lawful processing basis under LGPD Article 7 or 11 and an Article 33 transfer mechanism. A general customer signature does not replace either requirement. (Resolution 19/2024, Annex I, arts 3–4 and 9.)
Where no other mechanism applies, the parties should use the ANPD standard clauses for the relevant export. They must complete the designated fields and retain the required text. The clauses address the parties' roles, permitted onward transfers, rights, incidents, government demands and suspension. A UK IDTA does not automatically become an ANPD-approved equivalent. The parties must also implement the applicable Portuguese-language transfer information and rights arrangements. (LGPD, arts 33–35; Resolution 19/2024, Annex I, arts 16–20, and Annex II, cls 1–4, 16–19 and 23.)
The Brazilian clauses also affect the master contract. Clause 24 requires Brazilian law and competent Brazilian courts for disputes under those clauses and preserves data subjects' Brazilian remedies. Any agreement to arbitrate those disputes must satisfy the clause's Brazilian conditions. An English-law SaaS agreement should expressly preserve this separate transfer regime. A single exclusive English-forum clause across every document would conflict with that allocation. (Resolution 19/2024, Annex II, cl 24.)
Product improvement needs separate permission
The supplier should remove the proposed default permission to reuse client content. The initial contract should permit only the processing needed to provide, secure and support the agreed service. It should prohibit training, fine-tuning, general evaluation and cross-customer retrieval using client contracts, prompts, precedents, outputs and support records. These restrictions are a recommended allocation for this deployment; the law does not prohibit every properly authorised improvement project.
A customer opt-out does not establish the underlying authority. The law firm may hold documents for a restricted client purpose and may not own the counterparty's drafting or licensed precedent material. Its client's authority may cover advice and necessary support without extending to supplier development. Broad reuse can also undermine the limited-disclosure explanation relied on for privileged material. (SRA individual Code, para 6.3; Berezovsky v Hine, [27]–[32].)
For personal data, the supplier must identify its actual role and lawful basis. A new purpose requires the current Article 8A compatibility assessment where applicable, including the relationship between purposes, the collection circumstances, the data and the consequences. Compatibility does not itself establish every other requirement of lawfulness. The LGPD likewise restricts incompatible subsequent processing and rejects generic consent permissions. (UK GDPR, arts 5(1)(b), 5(3), 6 and 8A; LGPD, arts 6(I)–(III), 7 and 8(4).)
The strongest improvement argument is that better models benefit customers and can involve research. UK law can recognise qualifying commercial scientific research, but that description does not automatically attach to ordinary product development. The specific research conditions and safeguards still apply, alongside confidentiality, rights and transfer rules. A supplier cannot convert its independent purpose into instructed processing merely by pointing to a future customer benefit. (UK GDPR, arts 4(2)–(3), 8A(3)(b), 84B–84C and 28(10).)
Copyright requires a separate territorial analysis. UK copying and electronic storage can engage the copyright owner's rights. The computational-analysis exception in section 29A requires lawful access and research solely for a noncommercial purpose. It does not supply a general commercial model-training licence. Brazilian law also regulates reproduction and storage, distinguishes different uses and limits exceptions. Not every contract clause is protected expression, but ownership of a copy does not confer every right in its contents. (Copyright, Designs and Patents Act 1988, ss 16–17 and 29A; Lei nº 9.610/1998, arts 5(VI), 7–8, 29–31, 37 and 46.)
A later improvement project should identify the selected material, permitted acts, beneficiaries, retention and recipients. It should proceed only after the necessary client authority, privacy analysis and intellectual-property permissions. Removing names is insufficient where people remain identifiable or confidential negotiations remain recognisable. LGPD Article 12 requires attention to reversal using the agent's own means or reasonable efforts. UK GDPR Article 4(1), point (1), and recital 26 likewise require a real identifiability assessment. Anonymous data can still contain confidential business information or protected expression.
The licence for normal operation should remain narrow enough to reflect the service. The supplier should grant the firm usable rights in outputs to the extent it can grant them, while addressing third-party claims and restrictions. An assignment of whatever rights the supplier owns cannot guarantee exclusivity or cure copied third-party wording. The firm needs source checks and a remedy for prohibited reuse in addition to a licence clause.
Procurement must turn promises into evidence
The firm should require evidence that the service can perform the agreed duties before accepting live document access. Article 28 requires sufficient guarantees from processors and specified contractual terms. Those terms cover instructions, confidentiality, security, subprocessors, assistance, deletion or return and audit information. Article 32 requires security appropriate to risk; neither provision declares that a particular certificate alone establishes compliance. (UK GDPR, arts 28 and 32.)
The service specification should describe document and jurisdiction limits, supported retrieval sources and the treatment of uncertain answers. Acceptance testing should use representative contracts and test false authorities, incorrect cross-references, missed qualifications and retrieval from the wrong matter. The parties should agree measures and acceptance criteria appropriate to the intended work. The supplier should report observed limits rather than promise error-free legal analysis. These are commercial performance obligations supporting the firm's competence duties.
Customer and matter separation should cover the source corpus, search index, embeddings, cached outputs, logs and support tools. An embedding is a numerical representation used for retrieval; its different format does not establish anonymity or permission to share it. The firm should receive evidence of access tests, administrative privileges and deletion behaviour. Technical access should use approved accounts, strong authentication and time-limited permissions linked to a support purpose. (UK GDPR, arts 5(1)(c), 25, 28 and 32; LGPD, arts 6 and 46.)
Model and retrieval changes can alter an accepted service. The contract should require notice of material changes, enough information for retesting and a right to suspend an unsuitable release. New subprocessors need the agreed Article 28 authorisation and objection process, with equivalent obligations passed down. The initial processor remains responsible to the controller for its subprocessor's performance under Article 28(4). Commercial subcontracting freedom should not erase these duties.
Audit rights must be usable without indiscriminate disclosure of client material. The supplier should provide relevant reports, control evidence and necessary access, with proportionate confidentiality and security arrangements. The firm needs information required for SRA supervision, subject to legal professional privilege and other applicable restrictions. (UK GDPR, art 28(3)(h); SRA firm Code, paras 2.1–2.3 and 3.3(b).)
Retention promises need precision. The parties should set periods for prompts, outputs, support attachments, backups and technical records, then verify deletion across subprocessors. LGPD Articles 15–16 require deletion when processing ends, subject to their specified retention exceptions and technical limits. Brazilian application providers can have a statutory duty to retain specified access logs for six months. That duty concerns defined application-access information and does not authorise retaining every client document. Any legally required record should be segregated, protected and used only for its permitted purpose. (LGPD, arts 15–16 and 46–47; Marco Civil da Internet, Lei nº 12.965/2014, arts 5(VIII), 10 and 15; UK GDPR, arts 5(1)(e) and 28(3)(g).)
The supplier should also assess the complaint-channel, representation and service-terms duties applicable to its Brazilian internet application. Decree nº 12.975/2026 introduced further requirements under Decree nº 8.771/2016. A closed professional product should not be assumed exempt from every general application-provider duty. The agreement should allocate compliance information and necessary assistance without creating an unrestricted right to inspect or reuse client content. (Decreto nº 8.771/2016, as amended, arts 16-A and 20-A.)
A false authority and a leaked clause need different responses
If the firm relies on an invented authority, the responsible solicitor should stop further reliance and verify the underlying legal issue. The supplier should identify the relevant model version, retrieval sources and affected outputs. The firm must assess whether advice, negotiations, filings or deadlines need correction. Service credits alone cannot repair defective advice. (SRA individual Code, paras 3.2, 3.5 and 7.11; firm Code, paras 3.5 and 4.4.)
The firm must be honest and open with clients when things go wrong. If a client suffers loss or harm, it must put matters right where possible and explain fully and promptly what happened and the likely impact. It must also report promptly facts it reasonably believes capable of amounting to a serious regulatory breach, and other matters requiring the regulator's attention under the Codes. Not every AI error satisfies those thresholds, but contractual confidentiality or supplier approval cannot delay a required report. Supplier cooperation should include prompt facts, containment and proportionate evidence preservation. (SRA individual Code, paras 7.7–7.8 and 7.11; firm Code, paras 3.5 and 3.9–3.10.)
Retrieval of another client's wording adds a disclosure problem. The supplier should disable the affected retrieval or access path and preserve evidence under restricted access. The firm must identify the source matter, recipients and consequences without spreading the leaked material further. Confidentiality can be breached even where the wording contains no personal data. Copyright and privilege require their own analysis.
Where personal data have been compromised, the UK GDPR notification rules apply separately. A processor must notify its controller without undue delay after becoming aware of a personal data breach. The controller must notify the Information Commission without undue delay and, where feasible, within 72 hours after becoming aware of the breach, unless it is unlikely to risk individuals' rights and freedoms. A high-risk breach can also require notice to affected people, subject to Article 34's exceptions. The controller must document the breach and its response. (UK GDPR, arts 33–34.)
Brazil requires the controller to notify ANPD and affected individuals when an incident could significantly affect their interests and fundamental rights and also involves a listed data criterion. Those criteria include personal data protected by professional secrecy. The general deadline for both notices is three business days from the controller's knowledge that the incident affected personal data, subject to applicable special rules and conditional small-agent extensions. A startup cannot assume that it qualifies for an extension. (LGPD, art 48; Resolução CD/ANPD nº 15/2024, Annex, arts 4–6 and 9.)
The supplier's contractual first notice should arrive quickly enough for the responsible controllers to meet both systems. The parties can negotiate a shorter internal deadline, but should not label it a statutory 24-hour rule. They should allocate investigation, notices, insurer contact, remediation costs and evidence access without purporting to transfer a controller's legal responsibility to an operator. A fabricated legal authority without compromised personal data may remain a professional-quality incident rather than a data breach.
Liability should follow the promises each party controls
The supplier should accept liability for breach of its defined service, security, access and permitted-use promises. The firm should remain responsible for its legal advice and the review it undertakes. A client claim against the firm and the firm's claim against the supplier involve different duties and contracts. Neither the supplier's error nor the firm's review establishes the final allocation of loss without breach, causation and the applicable terms.
For a relevant business-service contract, section 13 of the Supply of Goods and Services Act 1982 implies reasonable care and skill. The treatment of a mixed licence and hosted service depends on the contract's substance. Express performance commitments should therefore cover the features on which the firm relies. A disclaimer that transfers every output risk while cancelling those promises would need close scrutiny.
The Unfair Contract Terms Act 1977 controls specified exclusions. Section 27(1) disapplies sections 2–7 where UK law governs only by party choice and the law of a country outside the UK would otherwise govern. In the absence of a choice, UK Rome I Articles 4 and 19 ordinarily point a services contract to the law of the country where the supplier has its habitual residence, generally its central administration for a company, subject to the relevant branch and manifestly closer-connection rules. Schedule 1 paragraph 1(c) also excludes sections 2 and 3 so far as the contract relates to the creation, transfer or termination of intellectual-property rights or interests. It does not automatically exclude every hosted-service obligation. Those scope questions must be resolved before relying on the following controls. Section 2 prohibits excluding liability for death or personal injury caused by negligence and subjects other negligence exclusions to reasonableness. Section 3 applies to relevant restrictions where a party contracts on the other's written standard terms. Section 11's reasonableness assessment includes the contracting circumstances and, for a monetary limit, resources and available insurance. The Act does not prescribe one valid cap for all enterprise AI agreements. (Unfair Contract Terms Act 1977, ss 2, 3 and 11, subject to s 27(1) and Sch 1, para 1(c); UK Rome I, arts 4 and 19.)
The parties should negotiate an ordinary cap by reference to the service's risk and available resources, with non-excludable liabilities preserved. Confidentiality breaches, prohibited training, security failures and intellectual-property claims may justify higher limits or separate protection. Indemnities should identify covered claims, defence control, cooperation and settlement restrictions. They should also address first-party investigation and restoration costs expressly where intended. No clause should purport to limit data subjects' statutory compensation or remove regulatory powers. (UK GDPR, art 82; LGPD, arts 42–43; IDTA, cls 32–33.)
Insurance should be checked against the proposed promises. The SRA minimum terms prevent a broad cyber or data exclusion from removing specified core civil-liability protection, including where automated technology is used. They also permit specified exclusions for liabilities assumed under supply contracts and for fines and penalties. It would therefore be inaccurate either to assume all AI-related liability is uninsured or to assume every indemnity and incident expense is covered. (SRA Indemnity Insurance Rules, Annex 1, cls 1.1–1.4, 6.6(b), 6.7 and 6.12.)
The firm should obtain its insurer's or broker's assessment of the actual use, notification duties and assumed liabilities. The supplier should provide evidence of appropriate technology professional-indemnity and cyber cover, including relevant territories, limits and exclusions. A certificate of insurance cannot replace the policy wording or prove that a particular claim will be paid.
Suspension and exit should work before a dispute is finally resolved. The firm needs a right to stop unsafe access or processing and obtain its documents, approved precedents and necessary records in a usable form. The contract should address deletion, backups, statutory retention and continuing confidentiality. Supplier incident duties should survive termination for affected processing. The IDTA also contains breach, suspension, termination and return or deletion provisions that ordinary service terms must respect. (UK GDPR, art 28(3)(g); IDTA, cls 26–31; LGPD, arts 46–47.)
English contract law does not displace Brazilian protections
English law and the courts of England and Wales provide a sensible starting choice for ordinary SaaS disputes with an English firm. The parties should make that choice expressly and identify service and notice arrangements. UK Rome I permits a choice of governing law while preserving applicable overriding mandatory provisions. It does not make Brazilian processing or professional rules disappear. (Regulation (EC) No 593/2008 as applicable in the UK, arts 3 and 9.)
An exclusive foreign-forum clause in an international contract can exclude Brazilian civil jurisdiction when the defendant invokes it in the defence and the statutory conditions are met. The English firm's domicile supplies a connection, but the clause must satisfy the written, transaction-specific requirements. For an internet-service contract of adhesion concerning services provided in Brazil, Marco Civil da Internet Article 8, sole paragraph (II), also invalidates a clause that offers no Brazilian forum alternative. Brazilian exclusive jurisdiction and the ANPD standard clauses' own forum provisions require separate treatment. (Código de Processo Civil, Lei nº 13.105/2015, arts 25 and 63; Resolution 19/2024, Annex II, cl 24; Marco Civil da Internet (Lei nº 12.965/2014), art 8, sole paragraph (II).)
An English judgment also does not become automatically executable against Brazilian assets. Recognition and enforcement require the applicable Brazilian procedure, including proper service and public-policy conditions. Brazilian choice-of-law rules can raise further questions if proceedings occur there. The commercial negotiation should therefore consider the location of assets, service arrangements and the cost of enforcement alongside the cap. (Código de Processo Civil, arts 960–965; LINDB, Decreto-Lei nº 4.657/1942, arts 9 and 17.)
Automated client delivery changes the product
The supplier should treat completed client-facing legal output as a separate product decision. Removing effective solicitor review changes the factual basis for the initial allocation. Direct dealings with clients also change who accepts instructions, owes duties and explains the service. English unreserved advice remains distinguishable from reserved work, while the Brazilian professional restrictions still require analysis of the supplier's actual functions. (Legal Services Act 2007, ss 12–14; Lei nº 8.906/1994, arts 1, 3 and 16.)
Where a law firm offers the automated interface as its own service, its competence, confidentiality and client-information duties continue. (SRA individual Code, paras 3.2, 6.3, 8.6–8.8 and 8.10–8.11.) For direct supplier sales, the terms and marketing should identify the supplier's actual status, service limits and available protections. Consumer-facing claims about qualifications or regulatory protection must also satisfy the unfair-commercial-practices rules. A warning does not by itself correct an overall misleading presentation. (Digital Markets, Competition and Consumers Act 2024, ss 225–227.)
A consumer variant also changes the contract analysis. An individual acting wholly or mainly outside a trade or profession can be a consumer. The Consumer Rights Act 2015 imposes relevant quality and description duties for digital content within its scope and reasonable care and skill for services. Its restrictions on exclusion and its unfair-terms test can invalidate attempted risk transfers. The original business purchase by a law firm does not automatically attract those consumer rules. (Consumer Rights Act 2015, ss 2(3), 33–36, 47, 49, 57 and 62.)
Marketing to consumers must also satisfy the current unfair-commercial-practices rules. Misleading claims about accuracy, qualifications or regulatory protection, and material omissions likely to affect a transactional decision, can engage those rules. The supplier should assess the overall presentation, including onboarding and payment pages. (Digital Markets, Competition and Consumers Act 2024, ss 225–227.)
Automated-decision restrictions depend on what the system decides about individuals. Current UK GDPR Article 22A defines a solely automated decision by the absence of meaningful human involvement. A significant decision has legal or similarly significant effects on the individual. Articles 22B–22C impose additional restrictions involving special-category data and require safeguards for significant solely automated decisions. Those safeguards include information, representations, human intervention and a means to contest the decision. Suggesting a clause for a company is not automatically such a decision. Automatically determining an individual's entitlement or comparable legal position may engage the rules, and superficial approval cannot supply meaningful involvement.
Brazil separately gives individuals a right to request review of decisions based solely on automated processing of personal data that affect their interests. It also requires information about the criteria and procedures on request, subject to commercial and industrial secrecy. That test differs from the UK's significant-effect test and does not automatically capture an ordinary company-clause suggestion. (LGPD, art 20.)
The wider territorial reach must follow the changed facts. An English customer alone does not establish EU AI Act application. Placing the system on the Union market, deployment there, or use of outputs in the Union can create relevant connections. Those changes should trigger a separate assessment before expansion. (Regulation (EU) 2024/1689, as amended, art 2(1).)
Release should depend on demonstrated controls
The recommended launch sequence begins with synthetic or properly cleared test material. The supplier and firm should first define the permitted work, actual data operations, staff roles and upstream providers. They should test sources, customer separation and error handling before deciding whether the product is suitable for live matters. The sequence gives practical effect to the firm's competence duties and the processor-selection and security requirements. (SRA firm Code, paras 2.1, 4.2 and 4.4; UK GDPR, arts 28 and 32.)
Live use should begin only after the firm has the necessary client authority, lawful processing basis and documented transfer arrangements. The parties should complete the actual access and retention settings, identify accountable reviewers and rehearse incident escalation. A restricted pilot can then test whether the promised review and support process works in practice. Expansion should depend on the observed errors, the effectiveness of corrections and the agreed acceptance criteria.
Brazilian scrutiny reinforces the need for genuine professional control. Resolution nº 16/2026 of the Brazilian Bar's Federal Council sets parameters for voluntary conduct-adjustment agreements with legal AI companies. It emphasises the material service, effective supervision and lawyer independence; an agreement gives no product certification, licence or approval. In a separate action concerning a Brazilian mass-litigation platform, the federal court's 21 October 2026 interim order required preservation of contracts, model and review records. It expressly made no final finding on the business model's legality and left further relief for evidential consideration. The decision does not decide this English contract-review arrangement. The practical implication is to preserve evidence that the firm controls legal work in substance. (Resolução CFOAB nº 16/2026, arts 1–3 and 5; ACP nº 5031169-20.2026.4.03.6100, 4ª Vara Cível Federal de São Paulo, decision of 21 October 2026, §§ 5 and 8, pp 4–6.)
These constraints favour an initial service in which the firm can reject the output and control the legal work in substance. New supplier legal-analysis functions, direct client delivery, expanded document classes, new model providers or countries, and any client-content improvement project should require a documented reassessment before activation. The parties should give that requirement operational force through permissions, change approval and suspension rights.