Editor’s Note: The Fourth Seminar of the International Commercial Expert Committee of the Supreme People’s Court and Reappointment (New appointment) Ceremony of Expert Members was held successfully on September 25, 2024. Over 40 experts from more than 20 countries and regions focused on the theme of the “Collaborative Dialogue, Diverse Integration, Peaceful Development” during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the members of expert committee and distinguished guests during the discussion session on Topic Four Innovation in digital era: AI’s application in dispute resolution and its outlook would be posted on the CICC’s website.

Artificial Intelligence (AI) application in dispute resolution and its outlook.

Danny Patrick McFadden 

Director of the Centre for Effective Dispute Resolution in London and Hong Kong

Former Vice Chairperson of HKMAAL

As we all know the use of AI is a hot topic around the globe. Governments and institutions are trying to formulate AI policies to deal with this advance in technology. Universities and publishers for example are concerned that written works may be solely the product of AI and not the author’s own. So how best to utilize and regulate AI has become a pressing global issue.

What do we mean when we talk about AI? One can identify 3 main forms of AI.

1. Artificial Intelligence (AI) Computer systems able to perform tasks normally requiring human intelligence.

2. Generative AI A form of AI which generates new content, which can include text, images, sounds and computer code. Some generative AI tools are designed to take actions.

3. Generative AI Chabot A computer program which simulates an online human conversation using generative AI.

I submit that AI is not a passing fad. Just like online mediation it is going to be part of the future of dispute resolution practice. During the Covid pandemic it was remarkable how quickly courts and mediators transitioned to online operations. In China as one commentator noted “Virtual hearings have become the new norm in Chinese litigation, arbitration and mediation proceedings”

I took part in my first online international commercial mediation in early 2020; I was in Europe, the claimant in the USA and defendant in Asia. I was fortunate in that as a World Bank mediator I had many years of experience of using video conferencing mediation. So I was used to seeing parties on-screen in another country. However as host of the mediation I was initially nervous about using the technology. Thankfully none of the parties’ lawyers had used online mediation before so they were very impressed with my technical skills. The case settled after 2 days of mediation and in spite of participants being in 3 different time zones.

Today without even thinking about it most people use AI at its basic level, for example, using a search engine to locate information or filling in an online form. So it is really a question as to the degree that AI will be used in future in dispute resolution.

Will AI act as the mediator itself or as a tool to assist the human mediator? “Maybe, over time, both?”

Courts have been quick to see the value in using AI as a tool to improve functional systems and reduce case waiting times. In 2022 the Supreme Court of China stated “People’s courts shall, by the year 2025, construct an improved functional system for the application of artificial intelligence in the judicial field, the function of which is to provide all-round intelligent support for serving the people and justice, and to effectively alleviate the high administrative workload” However the Opinion is very clear on AI’s limits. “AI shall not make judicial decision substituting for the judge in any case, disregarding technology advancement.” In the UK’s Judicial Guidance it states that before using any AI tools legal practitioners should “ensure you have a basic understand of AI’s capabilities and potential limitations.” So courts are supportive of using AI but as one might expect taking a cautious approach to using it, keeping a close eye on new technological developments.

In the mediation field AI is currently being used as a processing tool, assisting parties register for mediation, filing of cases and collection of documents.

Going beyond these types of functions brings with it some potential problems for mediators, parties and legal representatives.

First some potential benefits:

1. Some disputes involve large bundles of information. AI can quickly sort this material and save all the parties’ time in reading through volumes of documents, which often repeat themselves.

2. AI can assist parties who wish to use litigation risk assessment tools, able to provide some guidance as to their prospects of winning a case and therefore guide their negotiating tactics. For example, Decision Tree Analysis of a lawsuit is popular with some legal representatives in estimating their litigation risk. Since emotional elements are not factored into the analysis using AI may save lawyers time when constructing this type of case analysis. 

3. Some say if AI Bots were to be used as dispute resolution mediators then because the Bot is a machine it would be less likely to influenced by emotion or human bias.

Potential problems using AI in mediation:

1. Mediators need to understand the underlying needs of each party in order to be effective at assisting them find a solution. These needs are not usually apparent from just reading the mediation documents. The mediator needs to dig deeper and use his/her experience and skills to ascertain what they are. It is not a mechanical exercise it requires patience and is often intuitive.

2. Even in mediation cases involving large commercial enterprises, emotion is involved. All experienced lawyers and mediators know this to be the case. During negotiations understanding the parties emotions are often the key to resolving the dispute. The theory that humans only make rational decisions when making choices has long been disproved.   We are emotional beings when it comes to decision making, human beings are not entirely rational.

3. If AI is used by the parties to conduct research, it may not be possible to check and verify its correctness. Also in the common law system parties often quote precedents from previous case law. If the AI Bot is not using authoritative databases it may not be accurate. This could lead to arguments during the mediation sessions.

4. Garbage in Garbage Out is an old saying about computers. This can apply to using AI research tools as the information parties receive is only as relevant or good as the keywords inputted during the search.

5. Whilst AI may not show bias towards parties it may generate culturally biased information. An American AI search would be likely to focus on material and case law within its own jurisdiction the USA.

6. One key area for caution is in the area of upholding confidentiality and privacy. An AI Chatbot for example will remember all questions it is asked which could lead to the unintentional disclosure of information.

I would submit that currently AI cannot replace the skills of a mediator. So far AI has not been able to replicate the ability of humans to understand and empathise with parties. AI does not have the requisite EQ skills. So at this point in time I would suggest that AI can act as a useful aide to mediation. It can serve as a secondary process to support mediation. However all dispute resolution professionals need to be cautious. Relying on AI completely and not verifying facts and information which is AI generated could lead to lawyers being accused of professional negligence.

AI is here to stay so it will be important for lawyers and mediators to stay technologically aware or they will be in danger of being left behind.