Illustration depicting the intersection of AI technology and arbitration in construction law.
The use of artificial intelligence (AI) in arbitration processes within the construction industry is on the rise, yet it faces several ethical and practical challenges. While AI tools are currently limited to enhancing remote hearings and database navigation, experts caution against over-reliance. Past cases reveal potential inaccuracies in AI-generated legal documents, further complicating its application. Confidentiality issues also hinder data availability for AI training. Experts advocate for a careful integration of AI, ensuring that human oversight and ethical standards remain a priority as the construction industry evolves.
The integration of Artificial Intelligence (AI) in arbitration has sparked interest and concern among industry professionals, particularly as the trend in construction law evolves. Roberta Downey, a partner and head of an international construction group at a prominent law firm, has highlighted that while AI tools have found their way into arbitration, their use remains limited and mostly confined to specific tasks.
Downey notes that arbitrators have primarily utilized AI during remote hearings and to navigate databases of legal evidence, especially accelerated due to the COVID-19 pandemic. The shift in technology use showed that AI can effectively manage repetitive tasks, handle large volumes of evidence, and assist in translations for international projects. However, skepticism persists regarding AI’s capacity to draft complex legal documents due to the unique circumstances presented by each case and the intricate nature of construction law.
One notable case underscoring the complexities of construction law is the R(Cobalt Data Centre 2 LLP v Revenue and Customs Commissioners from 2024. This Supreme Court decision exemplifies how multifaceted legal issues can impact arbitration and how they demand human ingenuity and interpretation.
Inaccuracies have been documented in AI-generated submissions, leading to publicized mistakes when AI produces flawed outcomes. These errors raise crucial questions regarding the accuracy and reliability of AI in legal contexts. Moreover, the nature of arbitration—often conducted confidentially—limits the data available for training AI models, further complicating the operational landscape.
Despite these challenges, AI is already widely employed across various stages of construction projects, including in tendering, risk management, contract management, planning, and record-keeping. However, Online Dispute Resolution (ODR) platforms, initially viewed as a promising avenue for adopting AI in arbitration, have not achieved significant traction. For instance, the European Union recently discontinued its ODR platform due to low adoption rates.
Certain jurisdictions have implemented legal stipulations mandating that arbitrators must be human, such as in France, the UAE, and Turkey. While the English Arbitration Act does not explicitly mean to restrict AI arbitrators, existing laws pose challenges regarding the personal authority and obligations of arbitrators, complicating wider acceptance of AI in arbitration settings.
AI’s application has the potential to expedite the arbitration process, particularly by reducing trial durations. Reports indicate that the length of trials has decreased from between four to six weeks to a maximum of two weeks during the pandemic, thanks in part to the adoption of remote hearings and digital tools.
Concerns about the use of AI in arbitration extend beyond efficiency to include ethical implications, accuracy, confidentiality, and the imperative for human oversight. A recent survey revealed that 51% of respondents identified AI errors and bias as the primary obstacles to its integration in arbitration practices. Although there is a growing expectation among users of arbitration that AI will play a more significant role in the next five years, hesitation remains about deploying AI for decision-making and complex legal reasoning.
Downey’s observations illustrate a cautious and measured perspective on integrating AI in arbitration processes due to the inherent complexities and ethical considerations. While the administrative use of AI tends to be received more favorably, skepticism thrives over its application in substantive legal decision-making. The construction industry stands at a crossroads where the promise of AI must be balanced against practical realities and ethical concerns to navigate its future effectively.
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