Stranger Disputes: When Artificial Intelligence Turns Arbitration Upside Down

Arbitration agreements are everywhere in the United States. These agreements already block access to courts in a troubling manner, and pursuant to these agreements, parties must resolve their disputes before a private, human arbitrator with broad, virtually unreviewable powers. However, with the growth of AI, companies could easily redraft their contracts to require arbitration before non-human bots or AI arbitrators instead of a human arbitrator. Based on the history, values, policy, and text of the Federal Arbitration Act (FAA), this Article concludes that the FAA would govern and support the use of an AI arbitrator.

As a result, a pre-dispute agreement to arbitrate before an AI arbitrator and an award from an AI arbitrator should be binding and final under the FAA. However, even though AI arbitration would be lawful under the FAA, the use of an AI arbitrator is not appropriate for all types of disputes, such as consumer and workplace disputes. Exploring the use of AI in arbitration also raises fundamental questions about the meaning of arbitration, which the FAA does not define, and this examination of AI arbitration brings into focus a special, often overlooked dynamic and relationship between courts and arbitration and how arbitration can serve broader society.