The integration of Artificial Intelligence (AI) into the arbitration process is on the rise, but it should be restricted from making final decisions in disputes, advised Oliver Armas, Global Head of International Arbitration at Hogan Lovells. Speaking at a Young Singapore International Arbitration Centre (YSIAC) session titled “Who Moved My Cheese? How Legal Tech is Changing Your Arbitration Practice,” Armas emphasized the importance of maintaining human oversight in decision-making roles despite AI’s increasing presence in administrative tasks.
AI’s Evolving Role in Arbitration
Armas noted that the use of AI by arbitration tribunals is becoming more common, necessitating clearer guidelines on the roles technology can assume. “I believe it’s entirely appropriate to utilize AI for everything except the final decision-making. Ultimately, that’s the role we are compensated for as arbitrators,” he stated. Moderator Aditya Singh, a Partner at White & Case Singapore and YSIAC Council Member, inquired about how Armas defines the boundary between permissible administrative assistance and substantive decision-making.
Armas explained that tribunals are increasingly incorporating AI-related clauses in their procedural orders. “Our procedural orders now include provisions about AI, specifying what’s allowed and what’s not, and the disclosure requirements,” he elaborated.
The Importance of Transparency and Data Security
Michele Sonen, Head of APAC & MENA at Jus Mundi, stressed the importance of transparency regarding AI use in arbitration. While advocating for transparency, she cautioned against making disclosure an institutional mandate. She encouraged parties to engage in discussions with tribunals about permissible AI use, with institutions potentially offering model clauses or guidance. “Ensuring data security is critical. When discussing AI in procedural orders, it’s essential to include provisions to maintain the confidentiality of submissions, evidence, emails, and other data,” Sonen highlighted.
Alexander Fenner, Regional Counsel for Southeast Asia and India at Boeing Company, argued for the necessity of informing parties about AI use by tribunals. Ng Jern-Fei KC, Advocate at Duxton Hill Chambers, highlighted the core issue as one of delegation, questioning whether tasks reserved for arbitrators are being assigned elsewhere, either to humans or machines.
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Client Pressure and AI Adoption in Law Firms
The panel also discussed the rising client pressure on law firms to demonstrate tangible benefits from AI adoption. Fenner observed that clients demand cost-effective legal services without compromising on responsibility. “We are conservative by nature. If an issue arises due to AI use, it cannot serve as an excuse, similar to how it wouldn’t be acceptable from external counsel,” Fenner remarked. He stated that the effectiveness of AI use is gauged by the results, not merely the sophistication of the technology.
Armas noted that some clients are insisting on AI adoption when selecting external counsel and are using AI themselves to assess the quality of work provided by their legal representatives. This shift is reshaping the dynamic between law firms and their clients.
Singh posed a critical question to Armas about accountability if AI-generated work goes awry. Armas responded, “If a client insists on AI use without any attorney review, then who bears the malpractice risk?” He explained that the reluctance to fully embrace AI is not solely due to the traditional billable-hour model but also because of the risks and the technology’s novelty.
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AI’s Impact on Junior Lawyers
Sonen remarked on AI’s transformative impact on arbitration research, allowing for cross-jurisdictional searches and faster task completion. She noted that AI could significantly change arbitrator research by providing insights into an arbitrator’s past cases and track records, moving beyond traditional reliance on word of mouth and personal experience.
Jern-Fei commented that technology can empower smaller practices to compete with larger firms by reducing resource demands for labor-intensive work. The panel also examined whether AI’s efficiency in handling routine legal tasks might deprive junior lawyers of essential advocacy skill-building opportunities.
Singh asked Jern-Fei about the potential impacts on junior advocates if AI takes over initial tasks like reading records, constructing chronologies, and preparing cross-examinations. Jern-Fei responded, “AI provides time savings. Though junior lawyers may miss out on more mundane tasks, it doesn’t mean they have fewer opportunities to hone their skills. Instead, AI allows them to engage in more meaningful, substantive-driven work.”
Armas warned that law firms must find ways to compensate for the learning lost from routine tasks. Fenner echoed this concern, cautioning that improper use of AI by juniors might short-circuit their development and understanding of issues.
