By: Layan Al Fatayri[1]
As new AI tools develop in the area of law, particularly in the domain of arbitration, it becomes more essential for arbitrators to be up to date on the newest technological developments that are rapidly gaining recognition.[2] ChatGPT is an example of a technology that has gained popularity in the legal community and is gradually making its mark in the legal profession. This most recent generation of AI has transformed several sectors, including arbitration. The incorporation of AI technology has had a profound influence on arbitrators, their functions, and the overall arbitration system.
AI technologies represent a significant shift in how legal specialists, particularly arbitrators, approach their responsibilities. This technology, which is based on strong language comprehension and generating skills, has the potential to reshape the arbitration process in a variety of ways. Nonetheless, this shift carries with it numerous advantages and challenges. As a result, this blog post will investigate the noticeable effects of AI technology on arbitrators, looking into both the benefits and challenges they pose to this area.
ADVANTAGES OF AI TOOLS IN THE ARBITRATION PROCESS
Over the years, the area of arbitration has evolved tremendously. Arbitration has undergone a revolutionary transition as a result of the fast growth of technology, especially in the current generation of Artificial Intelligence. AI tools are now playing a fundamental role in arbitration, offering several advantages that have revolutionized the dispute resolution process. This section will highlight some of these advantages.
Efficiency and Speed
One of the most striking advantages of employing AI tools in arbitration is the dramatic improvement in efficiency and speed[3]. Arbitration often involves numerous amounts of documentation, legal research, and data analysis. AI systems are adept at processing and analyzing this large data with remarkable speed and accuracy, reducing the time required for the entire arbitration process. Legal research tasks that once took days or even weeks can now be completed within hours with the involvement and the use of new AI tools. This not only expedites the resolution process but also reduces the overall cost associated with prolonged arbitration proceedings.
Enhanced Decision-Making
AI technologies provide crucial data analytics and prediction insights to arbitrators. Machine learning algorithms have proven useful in the arbitration industry by evaluating past arbitration cases, legal precedents, and applicable legislation to offer arbitrators an in-depth understanding of the legal environment. Arbitrators can make well-informed, evidence-based judgments using this data-driven method. As a result, the quality of arbitration rulings increases, lowering the possibility of mistakes and increasing the overall credibility of the process.[4]
Cost Reduction
Arbitration may be a costly exercise, with parties spending large legal and administrative costs. By automating regular and time-consuming processes, AI may significantly reduce these expenses. AI-powered solutions may expedite document review, contract analysis, and due diligence, allowing parties to use their resources more efficiently. Therefore, the support that AI tools provide helps in the reduction in costs which makes arbitration more accessible and attractive to a wider range of businesses and individuals.[5]
Data and Document Management
The arbitration process often involves managing numerous amounts of data and evidence. Several AI tools excel at this task, ensuring that no critical information is overlooked. It organizes, indexes, and retrieves documents efficiently, streamlining the workflow for arbitrators and legal professionals.[6] This detailed data management also aids in maintaining the integrity of the arbitration process and facilitates strong fact-finding. Moreover, AI’s ability to analyze vast datasets extends to predicting potential outcomes of arbitration cases.[7] By examining the specifics of a current dispute alongside historical cases with similar attributes, AI can offer valuable insights into the likely results of arbitration. Parties can use this predictive capability to assess risks and benefits, make informed decisions, and even consider the possibility of settlement, saving time and resources. Moreover, AI-driven document management systems are essential in the arbitration field. These systems efficiently organize and retrieve documents, making it easier for arbitrators and legal professionals to access relevant information swiftly.[8] This not only saves time but also reduces the risk of critical documents being overlooked or lost.
Scalability
AI technologies are very flexible and can handle several scenarios at the same time. This scalability is especially beneficial for arbitration institutions and arbitrators with heavy caseloads. It enables quick case administration without sacrificing quality, ensuring that each disagreement is handled with care.[9]
Remote Arbitration
AI-powered video conferencing and virtual arbitration systems have become essential, particularly in post-pandemic environments [10]. Remote arbitration is enabled by these instruments, making the procedure accessible and simple for participants from various geographical places. This assures that arbitration can continue indefinitely, even under difficult situations.
Transparency
Artificial intelligence (AI) solutions can give real-time information on the status of arbitration proceedings, making the process more transparent for all parties involved. Investors may watch critical milestones and obtain insights into the decision-making process, increasing overall transparency and trust in arbitration.[11]
Therefore, we may conclude from what has been stated above that the use of AI technologies in the field of arbitration marked a new era of efficiency, justice, and accessibility. These technologies have resulted in a variety of benefits, ranging from accelerating the settlement process and lowering expenses to improving decision-making and preserving the integrity of processes. As technology advances, AI’s involvement in arbitration is expected to grow, making arbitration more efficient, effective, and appealing to a greater range of users. However, in addition to the benefits AI technologies bring to the arbitral process, there are also challenges to such modernization that should be considered. Those challenges will be addressed in the section following.
CHALLENGES OF AI TOOLS IN THE ARBITRATION PROCESS
Data Quality and Availability
To make knowledgeable conclusions, AI programs rely on massive amounts of data. Obtaining high-quality and relevant data in arbitration can be difficult, especially in situations involving sensitive or classified information. Ensuring data quality and dependability is critical for the success of AI applications in arbitration since it serves as the foundation for equitable outcomes and unbiased adjudications. The careful management and preservation of data support the integrity and reliability of AI-powered arbitration procedures, building trust among all parties engaged in the pursuit of fair and reasonable conclusions.[12]
Bias and Fairness
AI systems can inherit biases from the data they are trained on, which can lead to unfair outcomes in arbitration.[13] Bias can be especially problematic when it comes to decisions related to disputes involving individuals from diverse backgrounds. Ensuring that AI tools are trained on diverse and representative data and implementing bias mitigation techniques is crucial.
Privacy and Confidentiality
Given the essentially delicate nature of the material involved, confidentiality and privacy are key factors in arbitration disputes.[14] To protect those principles, AI systems used in the arbitration process must be strictly designed and implemented. This requires establishing strong data protection measures, such as modern encryption techniques, to secure sensitive data from unauthorized access. Furthermore, strict access controls should be implemented to ensure that only authorized individuals have access to secret information. Aside from these technological precautions, AI-driven arbitration systems must completely comply with significant data protection legislation such as GDPR, which establishes stringent criteria for the processing of personal and sensitive data.[15] These extensive safeguards, taken together, establish an effective foundation for preserving the secrecy and confidentiality essential to arbitration proceedings.
Human-AI Collaboration
Achieving an optimal balance between human expertise and AI assistance appears as an urgent necessity in the field of arbitration.[16] The delicate combination of utilizing AI’s capabilities while maintaining the crucial function of human oversight is a complex duty that requires our complete attention. On the one hand, an overreliance on AI technologies in the absence of watchful human oversight can lead to serious errors and misjudgments. In contrast, neglecting to realize the entire scope of AI’s potential could lead us to lost chances. The delicate skill of balancing these features, as well as the accurate boundaries of humans and AI’s various responsibilities in the arbitration process, remains a profound and ongoing challenge in the constantly evolving context of international arbitration and dispute resolution in general.[17]
Adaptability and Customization
The field of arbitration is significantly diverse, the practice and use of arbitration as a way of settling conflicts spans a wide range of fields, organizations, and scenarios with each case providing its own set of complexity and details. As a result, there is a high need for AI tools and algorithms that can adapt and customize themselves to meet the unique demands of each arbitration case. Given the fundamentally changeable nature of arbitration conflicts, developing such adaptable AI systems offers a significant challenge. The challenge is that meeting the multifarious needs of the arbitration process will always fall short.
Ethical Considerations
Incorporating AI features into the arbitration field requires a consistent commitment to respecting ethical norms and principles. The application of AI into arbitration proceedings should be carefully managed to avoid any unintentional compromise of essential principles such as due process, justice, and impartiality. In the ever-changing environment of AI-powered arbitration, ethical issues take priority. To address and reduce these critical problems, it is not only preferable but also necessary to establish strong ethical rules and execute severe supervision systems.
Legal and Regulatory Framework
The inclusion of artificial intelligence (AI) into the field of arbitration raises a number of complex legal and regulatory issues. These cover a wide range of issues, such as determining the legality of evidence created by AI systems and aligning AI usage with current arbitration rules and regulations. This is especially true given that the existing legal structure regulating arbitration is essentially designed for human decision-makers, making the adoption of AI a unique and difficult task.[18] The lack of a well-defined legal framework for AI in arbitration provides a severe challenge that must be carefully addressed. Failure to create explicit standards and protocols for the use of AI technologies in arbitration could threaten arbitration’s standing as the preferred conflict resolution process. This complex issue highlights the critical need for comprehensive and forward-thinking legislation in order to preserve the integrity and efficacy of arbitration in the fast-expanding field of AI technology.
To conclude, AI technologies have definitely influenced arbitrators and the arbitration process. While they provide several benefits, such as increased efficiency and cost savings, they also pose ethical and practical challenges. To take advantage of the benefits of AI while reducing its negative outcomes, arbitrators, legal experts, and institutions must work together to develop ethical principles and envision a future in which AI supplements, rather than replaces, human judgment in arbitration. The intelligent use of AI tools can eventually lead to more efficient and successful conflict resolution methods.
[1] Layan Al Fatayri holds an LL.B. from the Université La Sagesse with honors and further acquired her master’s degree (LL.M.) from the Université La Sagesse with honors. Layan is completing her Ph.D. studies in International and Commercial Arbitration at the University of Debrecen, Marton Géza Doctoral School of Legal Studies, Hungary, Europe. Layan worked at several professional institutions including the United Nations High Commissioner for Refugees and participated in several international legal conferences. Layan is also a member of Young ICCA, an organization functioning under the International Council for Commercial Arbitration, the Hungarian Arbitration Association, and the Australian Center for International Commercial Arbitration.
[2] Linda L. Beyea, “The Rise of Chatgpt: Why Arbitrators Need to Take Notice.”, American Arbitration Association, (March 17, 2023).
www.adr.org/blog/The-Rise-of-ChatGPT-Why-Arbitrators-Need-to-Take-Notice
[3] MAHNOOR WAQAR, “The Use of AI in Arbitral Proceedings”, LUMS Law Journal (page 345). https://moritzlaw.osu.edu/sites/default/files/2022-09/Waqar.pdf
[4] Scherer, Maxi, Artificial Intelligence and Legal Decision-Making: The Wide Open? Study on the Example of International Arbitration (May 22, 2019). Queen Mary School of Law Legal Studies Research Paper No. 318/2019, Available at SSRN: https://ssrn.com/abstract=3392669
[5] “Artificial Intelligence in Arbitration: Advantages and Legal Boundaries.”
https://thefranklinlaw.com/artificial-intelligence-in-arbitration-advantages-and-legal-boundaries/.
[6] Zekos, G.I. (2022). “AI in Arbitration and Courts. In: Advanced Artificial Intelligence and Robo-Justice”. Springer, Cham. https://doi.org/10.1007/978-3-030-98206-5_10
[7]“Faster Dispute Resolution: How AI Could Impact the Future of Arbitration – Journal of High Technology Law.” Sites.suffolk.edu.
[8]“AI Document Processing Remains a Subtle but Powerful Use Case | TechTarget.” Enterprise AI. https://www.techtarget.com/searchenterpriseai/feature/AI-document-processing-remains-a-subtle-but-powerful-use-case.
[9]Nunn, Dr Jeremy, “Council Post: The Future of AI-Powered Document Processing.” Forbes. https://www.forbes.com/sites/forbestechcouncil/2021/11/17/the-future-of-ai-powered-document-processing/.
[10] Wedderburn-Day, Jamie Maples, Christopher Marks, Zoë, “The Growth of Virtual Hearings in International Arbitration.” In Brief: European Disputes Blog. February 1, 2021. https://european-disputes-blog.weil.com/england-uk/the-growth-of-virtual-hearings-in-international-arbitration/.
[11] “Technology and Arbitration: New Trends in Law.” 2023. Econlib. https://www.econlib.org/technology-and-arbitration-the-new-trends-of-law/#:~:text=With%20the%20fundamental%20purpose%20of%20making%20the%20arbitration,as%20a%20judging%20entity%20in%20its%20own%20right.
[12] Chauhan, Aditya Singh. 2020. “Future of AI in Arbitration: The Fine Line between Fiction and Reality.” Kluwer Arbitration Blog. September 26, 2020. https://arbitrationblog.kluwerarbitration.com/2020/09/26/future-of-ai-in-arbitration-the-fine-line-between-fiction-and-reality/.
[13] Gesley, Jenny, “Artificial ‘Judges’? – Thoughts on AI in Arbitration Law”, The Library of Congress, January 13, 2021. https://blogs.loc.gov/law/2021/01/artificial-judges-thoughts-on-ai-in-arbitration-law/.
[14] Id.
[15] “The GDPR and AI: Ensuring Data Protection from the Start.” News.bloomberglaw.com. https://news.bloomberglaw.com/privacy-and-data-security/the-gdpr-and-ai-ensuring-data-protection-from-the-start-16.
[16] Maxi Scherer, “Artificial Intelligence and Legal Decision-Making: The Wide Open? Study on the Example of International Arbitration”, Queen Mary University of London, School of Law Legal Studies Research Paper No. 318/2019. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3392669
[17] Gesley, Jenny. 2021. “Artificial ‘Judges’? – Thoughts on AI in Arbitration Law | in Custodia Legis.” The Library of Congress. January 13, 2021. https://blogs.loc.gov/law/2021/01/artificial-judges-thoughts-on-ai-in-arbitration-law/.
[18] Gizem Halis Kasap, “Can Artificial Intelligence (“AI”) Replace Human Arbitrators? Technological Concerns and Legal Implications”, 2021 J. Disp. Resol. (2021) https://scholarship.law.missouri.edu/jdr/vol2021/iss2/5
Image Source: https://www.caltech.edu/about/news/can-ai-be-fair