Mediation & Arbitration / 3 min read
Artificial intelligence (AI) is reshaping operations across industries, introducing new layers of legal complexity alongside rapid innovation. As AI use grows, so does arbitration—spanning routine contract disputes to complex, technology-driven consumer protection issues. While AI is transforming industry dynamics, agreements involving AI technologies are increasingly subject to both established and novel legal challenges. These developments are raising concerns in the business sector.
In January 2025, Baker McKenzie unveiled the results of its eighth annual Global Disputes Forecast. The forecast provides an analysis of the dispute landscape for the upcoming year, drawing on insights from 600 senior in-house counsel at leading multinational corporations. According to the survey, technology-related issues were the leading concern for businesses as we entered 2025. The rapid acceleration of digital transformation—particularly the adoption of AI in business operations—further amplifies litigation and compliance challenges related to data governance, privacy, and ethical considerations.
Similarly, Dentons also issued its own report that highlighted emerging AI trends in the context of disputes and liability management. The firm noted that litigation involving AI is accelerating as the technology becomes increasingly integrated across industries. Looking ahead, Dentons anticipates that courts will continue to grapple with the complex legal issues posed by AI—particularly around assigning responsibility for AI-driven decisions and mitigating algorithmic bias.
To stay ahead, businesses and legal professionals must anticipate the unique challenges posed by AI. This includes drafting contracts that account for technological risks, defining accountability for AI-driven outcomes, and ensuring arbitration clauses are equipped to handle complex, tech-centric disputes.
AI-related legal disputes often center on complex technical matters—such as data handling, algorithm design, and system architecture—that may fall outside the typical expertise of judges and juries. This is where Alternative Dispute Resolution (ADR) proves especially valuable. ADR allows the parties to choose a neutral arbitrator or mediator with specialized knowledge and experience in AI, offering a more informed and nuanced approach to resolving these sophisticated issues.
Proactive planning and informed arbitrators and mediators can help manage the legal uncertainties that come with AI's continued evolution. With the growing integration of AI, arbitration cases involving AI systems, developers, and users are becoming more frequent. These disputes often center on critical legal questions such as contract enforcement, data usage rights, liability for algorithmic decisions, and regulatory compliance. This trend underscores the importance of clear contractual language, effective dispute resolution mechanisms, and arbitrators with a working knowledge of AI.
The American Arbitration Association (AAA), along with its global division, the International Centre for Dispute Resolution (ICDR), has published standards to guide neutrals, advocates, and ADR administrators in the ethical, effective, and human-centered use of AI in their work. Both institutions aim to provide practical guidance on the use of AI in ADR, with the goal of fostering an environment where AI enhances—rather than undermines—fairness, transparency, and trust in the dispute resolution process.
Recognizing the increasing role of AI in ADR, AAA and ICDR emphasizes the need for guiding principles to ensure its responsible and ethical use. AI systems used in ADR should be developed with ethical and human-centered design, ensuring meaningful human oversight and preserving the independent judgment of dispute resolution professionals. Privacy and data security must be prioritized, with robust protection measures in place for all AI users. To maintain trust, accuracy and reliability are essential—AI-generated outputs should always be verified against trusted, authoritative sources. Transparency and explainability are also critical; AI processes must be clear enough to allow users to understand, review, and, when necessary, challenge the results. Accountability requires that human responsibility remains central, with technology serving to support—not replace—the decision-making process. Finally, adaptability and continuous improvement are key, as ongoing evaluation and learning help ensure AI systems evolve responsibly alongside rapid technological change.
As AI continues to reshape the landscape of ADR, it is imperative that these technologies are integrated thoughtfully and responsibly. By adhering to principles of ethics, transparency, accountability, and human-centered design, the ADR community can harness AI's potential to enhance fairness and efficiency without compromising trust or integrity. The guidance provided by AAA and ICDR serves as a vital foundation to navigate this evolving terrain, ensuring that AI remains a tool that supports—not supplants—the critical human judgment at the heart of dispute resolution.