The quality improvement created by AI has had a counterintuitive effect: cases now last longer and cost defendants substantially more to defend, even though pro se plaintiffs lose on the merits at rates exceeding 40-to-1 compared to represented defendants. Settlement rates tell the story—only 29% of pro se cases settle versus 77% for represented ones, with many pro se filings terminated on procedural grounds like statute of limitations violations. The trend gained visibility following the March 2026 Lex Machina Employment Litigation Report, which documented the data. Firms including Fisher Phillips, Seyfarth Shaw, and Littler have flagged AI's role in emboldening unrealistic settlement demands. One notable example: Nippon Life Insurance faced over 60 AI-drafted filings from a single pro se plaintiff, incurring $300,000 in defense costs before suing OpenAI for recovery.
Employers should anticipate higher defense budgets—estimates suggest 10-15% increases—as weak cases now survive longer in litigation pipelines. The economics have shifted: AI-generated filings that would have been dismissed as incomprehensible now require substantive responses, extending discovery and motion practice even in cases defendants will ultimately win. Defense counsel should review intake procedures to identify AI-drafted complaints early and consider whether procedural challenges can narrow issues before costs accumulate.