{"id":904890,"date":"2025-10-09T15:05:59","date_gmt":"2025-10-09T21:05:59","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904890"},"modified":"2025-10-09T15:06:03","modified_gmt":"2025-10-09T21:06:03","slug":"ai-as-arbitrator-low-value-construction-disputes","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/ai-as-arbitrator-low-value-construction-disputes\/","title":{"rendered":"AI as Arbitrator for Certain Low-value Construction Disputes"},"content":{"rendered":"\n

Katrina Limond, Kirsten O’Connell, Christopher Ryan | A&O Shearman<\/a><\/p>\n\n\n\n

The AAA-ICDR has announced that, beginning on 3 November 2025, parties to certain low-value construction arbitrations<\/a> can elect to have an AI arbitrator resolve the dispute. The AAA-ICDR\u2019s objective is to provide a resource that delivers \u201cfast, cost-effective, and trusted dispute resolution.\u201d While there are clear benefits for consenting parties to be able to determine certain documents-only construction disputes swiftly (to enable projects to keep progressing), the potential benefits of using an AI arbitrator will need to be weighed against risks, including for enforcement and set-aside disputes.<\/p>\n\n\n\n

AI arbitrator \u2013 current and future uses<\/h4>\n\n\n\n

The American Arbitration Association\u2019s international division, the International Centre for Dispute Resolution (AAA-ICDR<\/strong>), has\u00a0announced<\/a>\u00a0that an AI arbitrator will be available from November 2025 in documents-only construction disputes (potentially limited to cases involving $25,000 or less under the\u00a0AAA Construction Rules<\/a>).<\/p>\n\n\n\n

Determination by an AI arbitrator will be available as an opt-in pathway within AAA-ICDR administered cases, requiring the consent of both parties. This builds on previous AAA-ICDR AI innovations, including (i) offering its panel of arbitrators access to Clearbrief, an AI tool designed to allow aid in the drafting and analysis of legal submissions; (ii) its October 2024 announcement of the AI-enabled AAAi Panelist Search to find arbitrators and mediators; (iii) the 2025 AAA-ICDR Guidance on Arbitrators\u2019 Use of AI Tools, and (iv) launching a professional development course on the use of AI for law firm leaders. AAA-ICDR explained that the AI arbitrator has been trained on over 1,500 construction arbitration awards, and developed with input from construction disputes practitioners and arbitrators from AAA-ICDR\u2019s Construction Panel, in collaboration with QuantumBlack, AI by McKinsey.<\/p>\n\n\n\n

The AI arbitrator reportedly will deliver a reasoned decision based on the documentary record, with tools available to explain the basis of the outcome. The AI arbitrator will evaluate the merits of claims, generate explainable recommendations, and prepare draft awards, appearing to have greater functionality than an AI assistant previously\u00a0announced by the Guangzhou Arbitration Commission<\/a>. It also appears to go beyond AAA-ICDR\u2019s Guidance on the use of AI Tools which \u201crequires arbitrators to retain complete control over decision-making<\/a><\/em>\u201d. AAA-ICDR explains that humans will remain in-the-loop to evaluate reasoning as part of its focus on validating results, safeguarding trust, transparency and due process.<\/p>\n\n\n\n

AAA-ICDR has also confirmed that it plans to expand eligibility for the AI arbitrator to other industries (with the insurance sector mentioned as the next possible opportunity<\/a>), dispute types and higher-value claims in 2026.<\/p>\n\n\n\n

Opportunities for construction disputes<\/h4>\n\n\n\n

AAA-ICDR expects the AI arbitrator to dramatically reduce the time and cost of arbitral proceedings, predicting that there will be\u00a0at least 30 to 50% savings in costs and 25 to 30% savings in time<\/a>: material savings in a sector that is especially reliant on cash flow, tight timelines and the ability to continue projects. These potential savings arguably go even further than previous initiatives targeting sectors that need swift dispute resolution to enable relationships to continue (including e.g., the\u00a0UNCITRAL Model Clauses on Specialized Express Dispute Resolution<\/a>; see our previous\u00a0article<\/a>\u00a0on this topic).<\/p>\n\n\n\n

Certain construction disputes appear well-suited as a use case to test AI arbitrators, especially those dependent on documentary records, schedules, quantification, and contractual mechanics, rather than on novel points of law.<\/p>\n\n\n\n

Risks of AI arbitrator<\/h4>\n\n\n\n

But use of an AI arbitrator, even with the parties\u2019 consent, does not come without risks, including those inherent to the general use of generative AI, like\u00a0data privacy and confidentiality, the risk of hallucinations, data biases and regulatory compliance<\/a>.<\/p>\n\n\n\n

Relying on an AI arbitrator could lead to an increased risk of set aside and enforcement issues. Many arbitration laws and rules work on the assumption that human arbitrators exercise independent judgment, and some national arbitration laws go as far as requiring a human arbitrator (e.g.\u00a0Article 1450 of the French Code of Civil Procedure<\/a>\u00a0or\u00a0Article 10(1) of the UAE\u2019s Federal Law No 6 of 3 May 2018<\/a>). The EU AI Act classes\u00a0decision making as a \u2018high-risk\u2019 activity, that requires human oversight<\/a>. In circumstances where\u00a0AI use by arbitrators has already led to an application to vacate an award<\/a>, the risk exists of an arbitration award made by an AI arbitrator being challenged under the\u00a0New York Convention<\/a>\u00a0on the basis that the arbitral procedure was not in accordance with the law of the country where the arbitration occurred (notwithstanding the parties\u2019 consent to AI arbitrator use). Non-transparent or non-explainable reasoning in an award may also increase the risk of a set-aside application.<\/p>\n\n\n\n

AAA-ICDR is alive to these risks and it will be interesting to see the details of their mitigation methods as they unveil further information about the AI arbitrator in the coming weeks.<\/p>\n\n\n\n

Conclusions<\/h4>\n\n\n\n

Document-only, lower-value construction disputes appear to be an apposite initial use case for AI arbitrators (a concept\u00a0hotly debated in recent years<\/a>). It will be fascinating to see whether this innovation is adopted by parties and is capable of achieving significant time and cost benefits, or whether it introduces new time-consuming procedural skirmishes, especially at the enforcement stage, even by parties who expressly consented to this process. For parties, it will be important to consider and obtain advice on how to avoid these issues (including by carefully considering local law in jurisdictions of the seat and of potential enforcement) and mitigate risks generally associated with AI use in decision making. Many international arbitration institutions have already started considering and addressing these issues, with the\u00a0SCC<\/a>,\u00a0VIAC<\/a>,\u00a0CIArb<\/a>,\u00a0SVAMC\u00a0<\/a>and\u00a0AAA-ICDR<\/a>\u00a0issuing guidelines or notes iterating the importance of effective human oversight of the use of AI and human control over decision-making in arbitration proceedings.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Katrina Limond, Kirsten O’Connell, Christopher Ryan | A&O Shearman The AAA-ICDR has announced that, beginning on 3 November 2025, parties to certain low-value construction arbitrations can elect to have an AI arbitrator resolve the dispute. The AAA-ICDR\u2019s objective is to provide a resource that delivers \u201cfast, cost-effective, and trusted dispute resolution.\u201d While there are clear… Continue reading AI as Arbitrator for Certain Low-value Construction Disputes<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[9895,42,11331],"class_list":["post-904890","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-advise-consult","tag-arbitration-2","tag-artificial-intelligence","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nAI as Arbitrator for Certain Low-value Construction Disputes - 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