INNOVATION IN A DIGITAL ERA: AI’S APPLICATION IN DISPUTE RESOLUTION AND ITS OUTLOOK

INNOVATION IN A DIGITAL ERA:

AI’S APPLICATION IN DISPUTE RESOLUTION AND ITS OUTLOOK

By Mr. Christopher Campbell-Holt,

Registrar and Chief Executive, AIFC Court & IAC

“There will undoubtedly be limits to how far AI will be able to progress. Will we reach a time when AI can adequately assess complex legal arguments or develop new legal principles? This is still to be seen. For now, machine learning systems do have an increasingly important role to play in assisting lawyers to analyse and produce legal documents, and technology can assist judges to make decisions, but they cannot substitute complex human reasoning and judgment”

Mr. Christopher Campbell-Holt 

Judges of the Supreme People’s Court, distinguished guests, and colleagues, good afternoon! It is my privilege and pleasure to be with you in person today in my capacity as a member of the Supreme People’s Court of China Distinguished Expert Committee. I am honoured to be a member. I have come to Beijing from Kazakhstan, which borders China and has a long-established close relationship with China, now including between our International Commercial Court in Kazakhstan, the AIFC Court, and the China Supreme People’s Court, its other courts, and dispute resolution and academic institutions.

The AIFC Court is an international commercial court in Astana, the capital city of Kazakhstan. It was established by The Rt. Hon. The Lord Woolf CH, former Lord Chief Justice of England and Wales, and myself, in 2017, and it commenced operations on 1 January 2018. The Court is led by The Rt. Hon. Lord Burnett of Maldon, most recent past former Lord Chief Justice of England and Wales. Our Chief Justice is supported by ten judges who understand the international commercial world and are amongst the most experienced and distinguished judges from the common law system with global reputations for absolute independence and impartiality.

The Court has completed and enforced 138 Judgments. It also supervises the case work of the International Arbitration Centre in Astana which has completed more than 3,200 arbitration and mediation cases.  The disputes have been complex, including all manner of commercial matters, and claim values have been in the multiple hundreds of millions of US dollars, and together in the billions of US dollars.  All judgments have been enforced to 100% satisfaction of the parties in Kazakhstan, and also internationally, including in South Korea, Turkey, and the United Arab Emirates. 48% of the cases have involved foreign investors from 28 countries, and more than 20 cases have involved Chinese investors doing business in Kazakhstan. The applicable laws in disputes have been English law and Astana International Financial Centre law, modelled on the laws of England and Wales, as well as Kazakh law. The Court has been recognised by global corporations as the “deal breaker” when making final decisions to invest in Kazakhstan.

At the heart of what we do at our Court is technology, and now also AI.

The type of AI being considered in dispute resolution is “machine learning”: essentially, where an AI system is designed to map patterns in the training data that is passed through it and then draws on that mapping to generate outputs and answers. The AI system is designed, and the training data selected, by human programmers, but the mapping process is automated and occurs without human intervention. As further data is passed through the system, so it continues to adjust and calibrate its pattern mapping to focus in on the statistically least wrong outputs, given the data passed through it.

Once trained, an AI system can generate decisions, predictions, spot analogies and so on. Developers test the system to check that outputs are correct, but there is often no transparency regarding how or why a particular output was arrived at.

Many countries have started to adopt AI in dispute resolution, and a few are beginning to use it to replace judges (at least initially) for low value, low complexity disputes. Estonia is at the forefront of this in Europe and has designed, and recently started to implement, a system which allows AI to issue decisions in low value cases.

In China, we know that the Hangzhou Internet Court, which operates 24/7, uses virtual judges to reach decisions in disputes involving digital matters. I understand that the average length of a case is around 40 days and although rulings can be overturned by human judges, no appeal has been brought in approximately 98% of cases.

“Internet courts” have been established in Beijing and Guangzhou, using machine learning technology to automatically generate judgments for judges to review in certain cases.

Even where AI does not reach decisions, it is being used around the world to “assist” judges in reaching decisions. This has at times proved controversial: for example, one well-known risk assessment tool purports to predict a defendant’s risk of committing another crime and assist judges determining whether to grant bail. But it has been argued that this system is not independent because it has “built in” biases in the historical data used to train the system, and so it has merely replicated those biases in its prediction.

The appeal of AI in decision making is clear: there are millions of disputes in the world. This has resulted in part because of a large increase in online payments and e-commerce. AI could help to resolve smaller value claims more quickly, providing more court time to hear higher value and more complex cases. For straightforward debt claims, the use of AI could result in claimants quickly and cost-effectively obtaining an enforceable judgment.

AI might have other advantages: greater consistency – it will produce the same result, given the same criteria, on any given day. It has been argued that AI could never work in a case in which the judge must decide which witness is telling the truth. AI is essentially driven by mathematics and has nothing to compare to the intuition and “personal sense” of a human being. But developments are being made in this regard all the time. For example, there have been advances in AI emotion recognition systems, looking for physical indicators that someone is not telling the truth, and this has meant that lie detectors are improving all the time.

There are problems with replacing Judges, humans, with technology. Even if the lack of transparency in most machine learning systems could be overcome, the manner in which the decision is reached by an AI system is completely different to human reasoning, being based on the statistical weightings and biases set by reference to the training data. So, the “reasoning” from an AI system may not provide much indication of which parts of the evidence were decisive. 

There is also the issue of whether litigants consider AI as a fair and impartial way to resolve disputes. AI is only as impartial as the training data that is fed into it. But it has also been argued that it is not more partial than judges and, moreover, it is free from the influences of human relationships and commercial interests that could affect human decision making.

There are likely to be limits to how far AI will be able to progress.

A critical area where AI is currently being developed at the AIFC Court, which has its own digital e-justice and video hearing facilities, is to “assist” proceedings via its transcription services. Traditionally, obtaining a transcription of court proceedings in other courts has been expensive, often involving external providers based in locations, including London. These services, while accurate and highly established, may not be feasible for all parties involved in legal disputes, especially outside London.

Recognising this challenge, the AIFC Court is developing an AI-assisted transcription service that will be cost-effective and locally managed in Kazakhstan. It will provide real-time transcription in both English and Russian languages, displaying live words on the screen during proceedings. Daily or hourly printed transcripts will be made available to the parties, ensuring they have timely access to accurate records of the proceedings.             

We believe this development will be a significant step forward, showcasing how AI can be used to improve, by assisting, the accessibility and efficiency of transcription in court proceedings.

I believe AI has an increasingly important role to play in “assisting” Judges to make decisions, BUT IT CANNOT currently appropriately make those decisions by itself without a Judge, particularly when the dispute is highly complex, without questioning the integrity and independence of the courts and ultimately reducing the trust and confidence that parties, and investors, have in those courts. 

I very much look forward to observing, and also encourage us all to work together, to determine how technology and AI will continue to develop in the coming months and years. I wish everyone at the Supreme People’s Court, and everyone involved in dispute resolution in China, the greatest success with their various technology and AI initiatives. Thank you.