In recent years, artificial intelligence (AI) has increasingly found a place in dispute resolution processes, just as it has in many other areas of life. The JAMS event titled “The Double Role of AI in Dispute Resolution” explored how AI could act as both the cause and solution to disputes. A simulated international mediation process during this event demonstrated the synergy between human mediation and AI-assisted tools.
The Simulation: A Complex Case in Search of Resolution
The scenario presented at the event revolved around a complex dispute between two technology companies. Horizon, a subsidiary of a China-based corporation operating in Luxembourg, commissioned Silicon Valley-based Quantum to develop a multilingual artificial language model. However, after the project was completed, Horizon claimed that the model was inadequate and generated potentially damaging “hallucinations.” Horizon withheld payment and demanded $95 million in damages, asserting that the model endangered compliance with regulations and risked reputational harm.
Quantum, on the other hand, argued that it had successfully delivered the project within the specified budget and resources, and that the errors were inherent limitations of current AI technology. As Horizon refused to release the $8 million payment, the parties turned to mediation to resolve the conflict.
The Critical Role of the Human Mediator
In the simulation, the human mediator played a pivotal role. During the initial discussions, tensions between the parties ran high. Horizon’s representatives were adamant in their demands, while Quantum’s representatives flatly rejected them. The mediator intervened by suggesting a short break to defuse the tension and create a more constructive atmosphere.
In private sessions, the mediator focused on understanding the core concerns of each party. Horizon’s priority was to prevent reputational damage in the Chinese market and mitigate regulatory risks. Quantum, meanwhile, sought to secure payment and avoid setting a precedent for unlimited liability. This deep analysis enabled the mediator to propose solutions that targeted the underlying interests of both sides.
AI’s Contribution to the Mediation Process
The event highlighted how AI could contribute to dispute resolution. AI tools can summarize parties’ positions, predict potential outcomes, and suggest bargaining ranges, streamlining the process. However, the simulation also underscored AI’s limitations in addressing complex human factors, such as cultural nuances and emotional dynamics.
For example, Horizon’s stakeholders from China placed a significant emphasis on reputation, while Quantum’s CEO demonstrated empathy for Horizon’s predicament. Understanding and addressing such concerns are challenges for current AI technology. While AI cannot replace human mediators, it can serve as a valuable supporting tool.
Creative Solutions: The Strength of Human Mediation
The mediator in the simulation went beyond addressing financial issues and proposed creative solutions. For instance, a specialized insurance policy was suggested to address Horizon’s concerns. This policy would cover reputational damages caused by AI errors, providing reassurance to Horizon. Quantum accepted this solution, offering Horizon additional security.
Additionally, the mediator crafted a culturally sensitive apology for Horizon’s Chinese stakeholders. Quantum agreed to issue the apology, which not only restored trust but also strengthened their collaborative relationship. These creative solutions underscored the human mediator’s empathy and ability to think outside the box.
The Future of AI-Assisted Mediation
The event indicated that AI is likely to play an increasingly significant role in mediation. AI can support mediators by handling technical tasks such as data analysis, contract reviews, and risk assessments. However, human expertise remains indispensable in areas requiring emotional intelligence, cultural sensitivity, and empathy.
The simulation demonstrated that while AI can be a powerful assisting tool, the best outcomes are achieved when paired with the creativity, empathy, and trust-building skills of human mediators. Looking ahead, hybrid models combining human mediators with AI tools are expected to become more prevalent.
For more information, visit the official JAMS website.
