Module 7

Privacy, ethics and AI in review: running a room responsibly

A data room holds a company’s secrets: its contracts and prices, the pay and health details of its staff, its customer lists, its legal advice and its disputes. The buyer’s team is given access because the deal needs it, and that access carries duties. Personal data must be handled according to the law that applies to it. Competitively sensitive information must not pass to a buyer that competes with the seller in a way that breaches competition law or hands it an advantage. Privileged material can lose its protection by being shared carelessly. The reviewing firm must also check that it has no conflict. Added to these old duties there is a new one: the use of AI tools to review documents, which speeds the work and creates new risks, from sending confidential documents to a service that is not secure to trusting a summary that is wrong. This module teaches the habits of a careful reviewer. It does not state the law of any country; each rule here is a prompt to find out what applies in the place where the deal is. The module ends with the limits of diligence, so that no one, including the reviewer, mistakes a review for a guarantee.

General education on legal due diligence, using invented companies, contracts, people and figures. It states common practice in simplified form and does not describe any one country's law, which differs and changes; rules on disclosure, the effect of a buyer's knowledge, privilege, data protection, competition law and liability in particular vary. It is not legal advice, and it does not replace advice from a qualified lawyer on a real transaction.