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The American Arbitration Association (“AAA”) recently introduced an AI-assisted arbitration platform known as the “AI Arbitrator.” The technology is designed to help streamline arbitration, particularly in two-party, documents-only construction disputes, by using artificial intelligence to analyze filings, summarize evidence, and generate draft decisions for a human arbitrator to review.

Under the AAA’s framework, AI does not replace the arbitrator; rather, it assists with reviewing submissions, identifying claims and issues, summarizing evidence, and preparing a proposed award. A human AAA arbitrator reviews, revises if necessary, and ultimately issues the final binding decision.

The platform reflects a broader effort within the ADR community to reduce costs and improve efficiency in high-volume disputes. Early AAA estimates suggest AI-assisted arbitration may resolve cases 20-25% faster and reduce costs by roughly 35% or more in certain document-based cases.

Potential Advantages

Organizations considering arbitration clauses that incorporate AI-assisted processes should evaluate several potential benefits:

• Cost savings and efficiency: Automated analysis of pleadings and exhibits may significantly reduce the time required for case review and award drafting.
• Faster dispute resolution: Streamlined workflows can shorten the time from filing to award in straightforward cases.
• Improved analytical consistency: AI tools can systematically organize claims, evidence, and legal authorities, potentially improving clarity for arbitrators and parties.
• Strategic insights before filing: AAA has also developed tools such as a “Resolution Simulator,” which can model how an arbitrator might analyze a dispute to help parties assess risk before initiating arbitration.

Potential Risks & Considerations

Despite these advantages, companies should carefully consider potential limitations before agreeing to AI-assisted arbitration:

• Transparency concerns: Parties may not have full visibility into how AI analyzes issues or drafts its recommendations.
• Reliance on emerging technology: AI systems may carry risks of bias, errors, or incomplete analysis if not carefully supervised.
• Limited applicability: The current platform is designed primarily for documents-only disputes, meaning more complex matters involving live witness testimony may not be appropriate.
• Contractual implications: Because the process is opt-in, arbitration clauses must specifically allow for AI-assisted arbitration if parties wish to use it.

Takeaway

AI-assisted arbitration represents a notable development in alternative dispute resolution. While it may offer meaningful efficiency and cost benefits – particularly for straightforward, document-based commercial disputes – companies should carefully consider whether the process aligns with their dispute resolution strategy, risk tolerance, and existing contractual provisions before electing to use it.

If you have questions about incorporating AI-assisted arbitration into dispute resolution clauses or evaluating its use in a pending dispute, please contact BMD Partner Krista Osterfeld at kwosterfeld@bmdllc.com.