How will AI impact arbitration proceedings?

It is critical, however, that anyone involved in legal proceedings need not put blind trust in AI tools, says the author.

It is critical, however, that anyone involved in legal proceedings need not put blind trust in AI tools, says the author.

Published Jun 11, 2024


By Siphokazi Kayana and Nomfundo Mkatshwa

As artificial intelligence (AI) has become increasingly sophisticated and mainstream, it is also clear that it will have a significant impact on almost every industry and field of business. That includes legal proceedings such as arbitrations.

The emergence of generative AI is an exciting development that has the potential to make lawyers and legal work more efficient and set forth a new era of legal services. It goes without saying that while the legislative and regulatory landscape of AI is yet to be developed, it is worth looking at how AI, particularly generative AI tools, will impact arbitrations. Will these tools be a help or a hindrance?

A helping hand

There are several areas within arbitrations where AI tools could be incredibly helpful. Generative AI tools may be useful across the entire arbitration process and may aid in, amongst others, project management and high-level issue analysis, particularly in an urgent legal matter.

In the preparation stage, generative AI tools have the potential to assist in making research simpler. For lawyers involved in arbitration proceedings, being able to efficiently analyse massive databases of case law, statutes, regulations, and legal literature could save a lot of costs for clients. This also has the potential to further ease the burden at the preparation stage and add to the overall efficiency of running an arbitration.

During arbitration proceedings, AI tools can also be used to better handle the often large document management process. Additionally, these AI tools can also provide transcripts, and summaries of each day’s events during the arbitration process.

Hallucinations and hindrances

Although AI has the potential of being extremely useful in arbitration proceedings, it can also cause potential hindrances. That is especially true for any parties who blindly put their trust in what is still an emerging field of technology.

In utilising generative AI tools, lawyers ought to consider the potential risks and benefits of utilising such tools. Many AI algorithms, for example, have the biases of the users. That can, in turn, lead to unfair or discriminatory outcomes, eroding trust in the arbitration process. Additionally, those built-in biases could compromise the ability of lawyers to conduct fair and impartial proceedings.

Generative AI tools are also occasionally prone to so-called “hallucinations”, whereby they present incorrect or misleading information as being factual. These have an effect of dismally affecting legal proceedings and the integrity therein. There have already been a few instances of fake legal cases making their way into real-world courtroom arguments, sometimes with disastrous results.

A tool that must be used carefully

As AI continues to permeate and evolve, its potential to reshape and transform the legal profession is a worthwhile consideration. However, this poses unique risks for companies, governments and society as a whole. The opportunities presented by AI ought to be balanced with the legal risks presented such as a wide range of ethical, legal and regulatory challenges.

There is no doubt that AI will continue to advance in capability and its applications. There is also no doubt that it is already proving itself useful across a broad range of legal procedures, including arbitration. It is critical, however, that anyone involved in legal proceedings to not put blind trust in AI tools. Lawyers should be judicious in which AI tools they use and how they use them.

Doing so will result in faster, fairer arbitration proceedings. Failure to do so, on the other hand, could have serious negative consequences for all parties, both in the immediate sense and in the long term.

Siphokazi Kayana, Director, Head of Dispute Resolution, CMS South Africa and Nomfundo Mkatshwa, Senior Associate, CMS South Africa