For
an
established
dispute-resolution
organization
that
is
turning
100
next
year,
the
American
Arbitration
Association
seems
to
be
doing
everything
but
acting
its
age.
Long
among
the
world’s
leading
providers
of
human
arbitrators
and
mediators
for
a
range
of
disputes,
the
AAA
is
now
preparing
to
launch
its
first
AI-powered
arbitrator
in
November.
The
AI
arbitrator
will
initially
handle
documents-only
construction
cases,
a
high-volume
area
where
the
organization
sees
efficiency
and
speed
as
particularly
valuable.
The
system
is
designed
to
automatically
evaluate
case
merits,
generate
recommendations,
and
prepare
draft
awards
—
to
be
reviewed
by
human
arbitrators
before
they
are
issued.
In
an
interview
for
my
LawNext
podcast
that
will
air
next
week,
Bridget
Mary
McCormack,
the
AAA’s
president
and
CEO,
projected
that
the
AI
arbitrator
could
reduce
the
cost
to
parties
of
construction
arbitration
by
30
to
50
percent
and
the
time
required
for
a
case
by
25
to
30
percent
at
launch,
with
those
metrics
improving
as
the
technology
advances.
Eventually,
the
AAA
plans
to
expand
the
AI
arbitrator
into
other
types
of
disputes.
Diana
Didia,
executive
vice
president
and
chief
technology
and
innovation
officer,
in
that
same
LawNext
interview,
said
that
the
next
area
of
development
will
be
insurance
cases,
and
specifically
payer-provider
disputes,
where
there
is
a
high
volume
of
cases,
usually
involving
claims
of
lower
dollar
amounts.
Trained
On
Actual
Cases
The
AI
arbitrator
was
developed
through
an
extensive
training
process
using
more
than
1,500
actual
construction
awards
from
AAA-ICDR’s
case
repository.
The
system
was
specifically
designed
around
legal
reasoning
as
its
foundation,
Didia
said,
with
human
arbitrators
providing
input
throughout
the
development
process.
The
training
dataset
was
chosen
strategically,
Didia
said.
Construction
cases
typically
include
reasoned
awards
that
allow
the
AI
system
to
map
the
decision-making
chain
of
thought
that
human
arbitrators
use
when
analyzing
evidence
and
reaching
conclusions.
Although
the
system
—
which
was
developed
in
collaboration
with
QuantumBlack,
AI
by
McKinsey
—
has
not
yet
been
tested
in
actual
cases,
the
AAA
has
tested
it
across
over
1,000
simulated
cases
using
actual
completed
disputes
from
AAA’s
data
repository,
with
arbitrators,
lawyers,
and
law
school
students
playing
the
roles
of
the
parties
and
neutrals
in
the
disputes.
Human-in-the-Loop
Framework
A
key
component
of
the
system
is
its
“human-in-the-loop”
framework.
After
the
AI
generates
its
draft
decision,
human
arbitrators
review
the
results,
with
full
access
to
the
case
materials,
and
can
revise
the
AI-generated
decisions
before
they
are
finalized.
When
parties
submit
their
materials,
the
AI
system
deconstructs
their
submissions,
identifying
claims,
evidence
and
legal
frameworks.
Crucially,
this
analysis
is
presented
back
to
the
parties
for
validation.
“The
parties
get
to
say,
yes,
that’s
right,
or
no,
this
part’s
wrong,”
McCormack
said,
“and
they
get
to
move
it
to
a
place
where
they
are
satisfied
that
it
fully
understands
what
they
think
their
case
is.”
This
validation
step
is
a
fundamental
game
changer
compared
to
traditional
dispute
resolution,
McCormack
said,
where
parties
often
feel
that
decision-makers
did
not
understand
or
address
their
most
important
arguments.
The
AI
arbitrator’s
transparent
breakdown
ensures
parties
know
they
have
been
heard
and
understood
before
any
decision
is
rendered.
Once
all
submissions
are
complete,
a
human
arbitrator
from
AAA’s
permanent
panel
is
appointed
through
a
traditional
round-robin
system,
maintaining
the
same
disclosure
and
conflict-checking
procedures
as
would
apply
in
any
AAA
case.
‘A
Muscular
Co-pilot’
The
appointed
arbitrator
gets
access
to
what
Didia
described
as
“a
very
muscular
co-pilot”
interface,
featuring
organized
case
summaries,
timeline
views,
claims
analysis,
and,
crucially,
a
complete
draft
award.
The
system
gives
arbitrators
access
to
all
relevant
evidence
in
an
organized
format,
allowing
them
to
click
through
to
source
documents
while
reviewing
the
AI’s
reasoning.
Once
the
human
arbitrator
reviews
the
draft
award
and
supporting
analysis,
the
arbitrator
can
make
any
adjustments
and
edits.
These
modifications
feed
back
into
the
AI
system
for
continuous
improvement.
The
final,
issued
award
carries
the
arbitrator’s
name
and
certification
—
they
are
issuing
the
decision,
not
merely
reviewing
an
AI
output,
the
AAA
emphasizes.
Arbitrators
participating
in
the
testing
process
reported
reviewing
case
materials
30
to
50
percent
faster
than
they
would
normally,
while
still
maintaining
confidence
in
the
outcomes.
“The
AI
is
issuing
an
award,
but
the
human
is
validating
it
and
the
human
is
signing,”
Didia
said.
Potential
to
Enhance
Access
The
AI
arbitrator’s
benefits
to
litigants
could
be
substantial.
McCormack
estimates
that
the
process
could
cut
the
cost
of
construction
cases
by
30
to
50
percent
and
the
time
by
25
to
30
percent.
Beyond
the
immediate
benefits
to
the
parties,
the
AI
arbitrator,
by
reducing
costs
and
complexity,
could
open
dispute
resolution
to
parties
who
currently
cannot
afford
traditional
processes.
“By
bringing
the
cost
down
and
the
time
down
and
also
making
the
process
just
simpler
for
users,
it’s
going
to
mean
that
if
right
now
we
resolve
half
a
million
disputes
a
year,
we
can
resolve
10x
that,”
McCormack
said.
“That’s
amazing,
right?
And
it’s
just
going
to
open
up
completely
new
frontiers
for
dispute
resolution.”
Impact
on
Arbitrators
Does
the
advent
of
AI
arbitrators
mark
the
beginning
of
the
end
for
human
arbitrators?
“I
don’t
think
so
at
all,”
McCormack
told
me,
but
they
will
have
to
change
their
business
models.
“I
do
think
that
you
want
to
be
able
to
be
one
of
those
arbitrators
who’s
able
to
accommodate
an
AI-native
process
because
you’re
going
to
continue
to
have
a
big
career,”
she
said.
Because
AI
is
going
to
open
the
arbitration
process
to
more
people,
she
emphasized,
that
means
more
opportunities
for
arbitrators.
“It’s
not
going
to
put
you
out
of
business.
Quite
the
opposite.
It’s
going
to
allow
significantly
more
disputes
to
come
our
way.
“But
you
do
have
to
come
along
for
the
ride.
I
do
think
that
if
you’re
not
along
for
the
ride,
then
you
might
want
to
think
about
what
the
next
phase
of
life
looks
like.”
A
Century
of
Innovation
The
AAA’s
launch
of
the
AI
arbitrator
represents
the
culmination
of
a
broader
generative
AI
and
innovation
initiative
it
has
been
pursuing
for
the
past
several
years,
and
which
has
already
produced
several
tools,
including
chatbots
for
rules
and
customer
support,
AI-enhanced
panelist
search
capabilities,
document
summary
and
Q&A
functions,
and
various
case
management
enhancements.
It
also
comes
as
the
AAA
approaches
its
centennial
anniversary.
In
these
latest
innovations,
McCormack
draws
parallels
to
the
organization’s
founding,
noting
that
arbitration
itself
was
considered
an
innovation
100
years
ago,
designed
to
provide
broad
access
to
dispute
resolution
for
all
parties,
not
just
large
businesses.
“We
think
this
technology
allows
us
to
deliver
on
that
in
a
modern
world,”
she
said.
“Arbitration
is
a
really
important
process
for
lots
of
users,
but
the
world
has
gotten
significantly
more
complicated
and
we
need
more
options,
and
we’re
ready
to
deliver.”
[Disclosure:
I
am
an
arbitrator
listed
on
the
AAA’s
labor
relations
roster.
I
receive
case
appointments
through
the
AAA,
but
any
compensation
I
receive
is
paid
by
the
parties
to
the
dispute,
not
by
the
AAA.]