July 29, 2026
The most expensive line item in any dispute never appears on the invoice.
It’s fear.
I’ve sat on every side of that table — the sibling who bought the family business, the franchisee, the claims manager at 2 a.m., the engineer handed an impossible deadline. No dispute I’ve ever seen started the day someone called a lawyer. It started about a year earlier, in three moves.
One. The relationship does the work the contract should be doing.
The round is closing. Everyone likes each other. Hard clauses get waved through because raising them feels like distrust.
Two. Execution narrows the field of view.
Once the work starts, communication becomes event-driven. People talk when something breaks. Not before.
Three. Someone notices something is wrong — and says nothing.
This is the move that costs the money. Not the bad clause. The silence after it.
We call it “waiting to hear back.” We call it “a systems issue.” We call it “let’s not make this bigger than it needs to be.” We tell ourselves we’re being patient or professional.
We’re not. We’re afraid — of the answer, of the invoice, of being the one who blew up the relationship. And the problem keeps compounding the entire time.
What people are staying quiet about right now
Not predictions — live issues in 2026:
The thing you built on changed. Your vendor updated or retired the model under your product. Nothing broke. It just quietly stopped doing what it did when you bought it. Your notice period may be 90 days. Your testing takes longer.
You paid to customize it, and you don’t own it. Training a system on your data feels like it makes it yours. That does not follow automatically. The contract that assigned you “the software” often never reached the part you actually paid for.
Something acted, and no human approved it. The old defense was “the system did that on its own.” In California, that defense is gone as of January 1 — Civil Code § 1714.46 bars a defendant who developed, modified, or used AI from arguing the AI autonomously caused the harm. It does not decide who is liable. It just takes away the sentence everyone was planning to say.
Your contract measures the wrong thing. It guarantees the service stays switched on. It says nothing about whether the output stays correct. Nobody defined “worse,” so nobody owes you anything when it gets worse.
Your insurance may have quietly stopped covering all of it. Generative-AI exclusions started appearing on standard liability forms this year. Most people will find out at renewal, in a form number nobody read. Pull yours. Look for CG 40 47.
You don’t have to be in AI for this to apply. Substitute your own industry’s fast-moving clause — the one everyone signs and nobody negotiates. It’s there, and someone on your team has already noticed it.
Name it early
Prevent what you can. Name it early. Being the person who raises it is not being difficult. It’s being the cheapest person in the room.
And when the conversation stops moving, bring in someone whose entire job is to make it move again.
Mediation isn’t the last resort. It’s the one you use while it’s still a conversation.
Sources
California Civil Code § 1714.46, added by AB 316 (Krell), Chapter 672, Statutes of 2025; effective January 1, 2026. leginfo.legislature.ca.gov
ISO form CG 40 47 01 26, “Exclusion — Generative Artificial Intelligence,” an endorsement to the Commercial General Liability Coverage Part. Companion forms CG 40 48 (Coverage B only) and CG 35 08 (products/completed operations) address related exposures.
Ariadne Latorre is a Florida Supreme Court certified mediator and a software engineer. She mediates business and commercial, insurance and risk allocation, LegalTech and information governance, HOA and community, and court-ordered matters, in English and Spanish, in Miami and virtually worldwide.