The integration of AI and its potential impact on dispute resolution models

First published in the Forum of Insurance Lawyers’ (FOIL) ‘The Voice November 2025’

This article was co-authored by Isobelle White, Trainee Solicitor.

The integration of Artificial Intelligence (AI) into the UK’s legal dispute resolution models presents a number of benefits, challenges and questions. These benefits, where implementation is effective, could drastically alter access to justice as we know it.

Here, we explore the implications of this integration, specifically examining its potential impact on the traditional court system and online dispute resolution (ODR). The primary impetus for the use of AI in dispute resolution is the promise of enhanced efficiency and the ability to leverage data driven consistency within established legal frameworks. However, implementing these tools ethically and effectively will be no mean feat. These forecasted benefits are entirely reliant upon the addressing of significant, complex challenges, including the threat of algorithmic bias, accountability, ambiguity and the need for qualitative judgement to uphold justice. While AI promises a more streamlined and efficient legal system, a cautious approach is necessary to effectively and fairly utilise it in all disputes. This, in turn, could significantly promote access to justice.

Pre-Litigation Assessment

Any dispute resolution process begins with the pre-litigation assessment of a claim, where AI is already proving itself useful. Predictive AI can analyse vast datasets of historical claims information, meaning that it can produce accurate early risk predictions.  This enables insurers and lawyers alike to evaluate the likelihood of a successful claim, with objective precision.   Additionally, AI systems are capable of sifting through enormous volumes of documents faster than any legal professional, isolating relevant information and expediting initial review processes.  AI’s use enables cost-saving intervention strategies such as the ability to accurately set early claims reserves.

On the other hand, the promise of efficiency is counterbalanced by a number of risks. If AI systems are inadvertently programmed using inaccurate or biased data, the risk of algorithmic error or bias is considerable, leading to unfair, illogical or even discriminatory recommendations. This concern creates a necessity for lawyers to regularly audit AI recommendation processes. This is further exacerbated by the "black box problem," where the technology’s reasoning is opaque, making it difficult for a lawyer to discern exactly how a conclusion was reached.

AI’s Potential Impact on Traditional Court-based Litigation

For traditional court-based litigation, AI offers solutions to both lawyers and the courts themselves. For example, E-discovery can be drastically more efficient, with AI capable of reviewing voluminous documents in a matter of seconds. Furthermore, the adoption of AI for accelerated research allows the legal profession to rapidly collect and analyse the information required to advance a case. The utilisation of generative AI in drafting exercises can also enable quick production of initial drafts of pleadings, submissions and other necessary procedural documents. However, these promises of efficiency are, at least in the short term, undermined by the numerous hurdles. The risk of ‘hallucination’, where AI fabricates fictitious case law or legal principles, is rife. It can be argued that the time saved in drafting or researching may be counteracted by the mandatory burden of verification, where professionals will have to meticulously review and fact-check everything generated by AI. Similarly, data leak risks present liability concerns where non-in-house applications are used.

AI’s Potential Role in Online Dispute Resolution

The utilisation of AI within ODR offers, arguably, the greatest promise of innovation. ODR platforms can utilise AI to automate negotiation processes based on historical datasets and objective settlement ranges. This can encourage early and realistic settlement, helping to reduce and prevent further court backlogs. This automation can drastically decrease the time and costs incurred in settlement, providing access to justice to those who may have previously been priced out of making a claim. Moreover, predictive AI is built on consistency; claims with similar values and circumstances are more likely to have similar outcomes. Consequently, consistent precedent setting is promoted. While this has its benefits, this level of consistency can present a drawback where a case is unique and factually nuanced. Predictive AI is not sufficiently equipped to address considerations of emotional strain or other subjective issues that often arise in insurance claims (particularly in personal loss or injury). This results in a profound ethical conflict:  the use of AI in improving efficiency and saving costs may directly conflict with a solicitor’s duty to secure the ‘best outcome’ for their client. However, this is not to say that future advancements in technology will not correct this issue.

Practical Limitations

• Accountability – who is responsible for an erroneous or damaging outcome generated by AI (e.g. the programmer, the user, the platform owner, the AI itself etc.)
• Transparency – where explainability is required, professionals will struggle to explain why an AI system has come to a specific decision.
• Timescale – the effective nationwide implementation of AI within dispute resolution models will take an inordinate amount of time. The transition will require significant training and input from legal professionals, all before the sector can reap any of the promised benefits.

Concluding Thoughts

While the integration of AI within the dispute resolution models of England and Wales carries countless forecasted benefits, users and programmers must act with extreme caution when promoting its effective and ethical use. Despite the inevitability of its inclusion, legal professionals must use AI in a balanced way to ensure that the principles of fairness and justiciability are upheld. Should AI be successfully and ethically implemented and utilised, access to justice within England and Wales could improve exponentially. 

Related article: From innovation to indemnity – AI promises efficiency but has potential to leave solicitors with increased risk and costs