Don't Kill the Baby: The Case for AI in Arbitration 

Abstract

Since the introduction of Generative AI (GenAI) in 2022, its ability to simulate human intelligence and generate content has generated both excitement and concern. Criticisms often focus on AI's potential to perpetuate bias, create emotional dissonance, displace jobs, and raise ethical questions. However, these concerns frequently overshadow the practical benefits of AI, particularly in legal contexts. This article explores the integration of AI into arbitration, arguing that the Federal Arbitration Act (FAA) permits parties to contractually select AI-driven arbitration, despite traditional reservations.

The article makes three key contributions: (1) It shifts the discourse from debates over AI's personhood to the practicalities of incorporating AI into arbitration, asserting that AI can effectively serve as an arbitrator if both parties consent; (2) It identifies arbitration as an ideal entry point for broader AI adoption in the legal field, given its flexibility and the autonomy it grants parties to define standards of fairness; and (3) It outlines future research directions, emphasizing the need for empirical comparisons between AI and human arbitration, potentially leading to the development of distinct systems.

By advocating for the use of AI in arbitration, the article emphasizes the importance of respecting contractual autonomy and fostering an environment where AI’s potential can be fully realized. Drawing on insights from Judge Richard Posner, it argues that the ethical obligations of AI in arbitration should be considered within the context of its technological strengths and the voluntary nature of arbitration agreements. Ultimately, the article calls for a balanced, open-minded approach to AI in arbitration, recognizing its potential to enhance the efficiency, fairness, and flexibility of dispute resolution.

Keywords: Law and Tech, Arbitration, Alternative Dispute Resolution