Generative artificial intelligence (AI) is transforming the future of work across several sectors, with the legal field being a prominent one among them and, in particular, arbitration. AI has the potential to make arbitration a more efficient and cost-effective process and is already being utilized by both counsel and arbitrators for many applications.

This report explores the benefits, challenges, and potential solutions of implementing AI in arbitration.

Current Applications of AI in Arbitration

In our field, we are mainly seeing generative AI being used for legal research, drafting documents, conducting document reviews, summarizing information, and assisting with procedural aspects.

As technology evolves, AI may be utilized to summarize pleadings, generate case theories, and even assist arbitrators in processing procedural documents.

Challenges of Implementing AI in Arbitration

Accuracy of Outputs

With the incorporation of AI in legal processes, ensuring the accuracy and reliability of the outputs it generates is essential. The outputs depend largely on the input data quality—”garbage in, garbage out” is a key principle here. Until input accuracy is guaranteed, parties should avoid relying solely on AI-generated content.

Data Privacy Concerns

Data privacy remains a critical concern, especially with the sensitive information in legal practices. Many AI systems operating outside jurisdictional boundaries may present risks of data breaches. It is crucial to protect sensitive information during arbitration proceedings.

Need for Transparency and Regulations

Law firms should discuss the use of AI openly with clients to maintain transparency. Clients expect that legal fees cover not just AI-derived outputs but also the lawyers’ strategic input.

Arbitrators must ensure that their use of AI tools in decision-making is disclosed and consented to by all parties involved in the arbitration to uphold the integrity of the process.

Conclusion

AI’s applications in arbitration will likely continue to expand, but it is crucial to enforce regulatory and transparent practices to maintain arbitrators’ accountability. This is essential to safeguard the primary role of arbitrators in issuing well-reasoned decisions based on thorough analysis.

The author is a partner at Addleshaw Goddard.

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