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The American Arbitration Association, the largest private provider of alternative dispute resolution services, recently launched its “AI Arbitrator.” It marks yet another step in leveraging AI to save time and costs in the legal field.
Arbitration is an out-of-court dispute resolution process by which, traditionally, a neutral person or panel of people issue a binding decision concerning a dispute between two or more parties. But soon, neutral artificial intelligence may issue binding decisions instead of neutral humans.
The American Arbitration Association recently introduced an “AI Arbitrator” for construction cases, marking a notable shift in how disputes may be managed and decided. Despite the name, the system does not replace the human neutral—yet. Instead, the AI assists the human arbitrator with organizing records, generating summaries, and highlighting potential issues within the parties’ submissions. In construction matters, where there are often thousands of pages of documents relevant to the dispute, the tool may reduce administrative burden and help arbitrators grasp the factual landscape much earlier in the process. This leads to time and cost savings for parties.
Functionally, the AI analyzes the parties’ submissions through the AAA’s secure portal and produces documents to assist the human arbitrator in reaching a decision. The arbitrator retains exclusive decision-making authority. The human neutral may then accept or disregard the AI’s suggestions in reaching a decision. The human arbitrator maintains sole discretion over the outcome of the case.
The AAA reports that use of the AI Arbitrator can lead to savings in excess of 35% and time savings of 20-25% in cases where it’s used. Currently, the AAA has deployed its AI Arbitrator for documents-only construction disputes. That is, cases that are decided based on the documents submitted by the parties, without live testimony. The AI Arbitrator is solely an opt-in feature. All parties must agree to its use, otherwise, the case will proceed under traditional arbitration procedures.
Although AI is not currently deciding disputes on its own, this development may be one of the first steps to a future where parties allow artificial intelligence to decide their disputes.