Artificial Intelligence and Dispute Management: A Guide for Companies That Want to Innovate Without Exposing Themselves

AI can streamline business processes, but when it comes to strategic decisions and conflict resolution, human intelligence is still essential.

I. AI in Business Processes: Where It Actually Operates

More and more companies are using AI systems for:

• contract and clause analysis or pre-screening;
• automated drafting of documents (contracts, minutes, letters);
• support in strategic or contentious decisions (e.g. suggestions on how to structure a mediation proposal);
• assessment of legal or reputational risks.

The advantages are clear: speed, cost reduction, and access to otherwise unmanageable data volumes.
But these technologies, no matter how sophisticated, do not understand context, cannot read contractual intent, and do not assume responsibility.
This is where problems begin.

II. The Limits of AI That a Company Cannot Afford to Ignore

1. The Illusion of Autonomy
An AI system can generate documents, suggest strategies, or offer summaries.
But it has no awareness of risk, does not assess reputation, and does not know your market.
And if something goes wrong, the error is yours—not the algorithm’s.

2. Lack of Context
A dispute—whether in court, arbitration, or mediation—is not just a problem to be solved, but a process to be conducted carefully.
Who are the parties? What’s truly at stake? What strategic objective do we want to achieve?
AI doesn’t answer those questions.

3. Legal Responsibilities
Any company using AI tools in legal settings must:

• comply with GDPR rules on data processing, profiling, and cross-border transfers;
• ensure human review of any automated decision (Art. 22 GDPR);
• document the choices and criteria used to integrate AI into high-impact business processes.

European authorities have made it clear: adopting AI does not reduce liability—it increases it if there is no governance, control, and supervision.

III. Why the Human Professional Remains Central in Disputes

Let’s be clear: managing a dispute, a complex negotiation, or strategic litigation cannot be delegated to an automated system.

Not because AI is inherently “dangerous,” but because it lacks what truly matters:

• the ability to read between the lines,
• the sensitivity to sense the right timing for a proposal or retreat,
• the strategic overview that connects law, business, reputation, and market.

An algorithm can simplify.
But deciding is something else entirely.

IV. The Real Challenge: Smart Integration, Not Substitution

When used correctly, AI can:

• ease the operational burden of legal departments and in-house teams;
• support large-scale document analysis;
• offer predictive tools to evaluate trends and risks.

But it must be integrated into a control structure:

• with clear validation processes;
• with predefined risk thresholds;
• with a human decision-maker ultimately responsible.

No company should automate what is strategic, nor give up its capacity to assess, choose, and negotiate.

V. Conclusion: Innovation Is a Duty, But It Requires Awareness

This isn’t a battle between human and machine.
It’s a matter of balance—between technology and experience, speed and ethics, opportunity and risk.

As legal professionals, we’re not here to hold back innovation.
We just want companies to understand what they’re doing—before they do it.

Anyone leading the adoption of AI in business—whether a manager, general counsel, or entrepreneur—has an added responsibility:
not to be blinded by the power of the tool, but to govern its limits.

Because in law, as in business, true intelligence is still human.

Legal Checklist for Using AI in Business Without Exposing Yourself to Risk

1. Map Data Processing
Check whether AI is processing personal or sensitive data, and where it’s stored.
Ensure GDPR compliance for security, minimization, and international transfers.

2. Provide an Updated Privacy Notice
Revise your privacy policy and clearly inform clients, employees, and suppliers about AI usage.

3. Avoid Automated Decisions Without Human Oversight
️ If AI influences decisions about individuals (e.g. evaluations, sanctions, contractual choices), human review is mandatory (Art. 22 GDPR).

4. Vet Your AI Vendors
Are the servers in the EU? Is the data protected? Are the vendors GDPR-compliant?
Always request a DPIA (data protection impact assessment).

5. Establish Internal Validation Processes
Define who controls and approves AI decisions—and who is ultimately accountable.

6. Never Delegate Dispute Management to AI Alone
Drafts, letters, or strategies generated by AI must always be reviewed by a legal expert.
AI does not understand context or human dynamics.

7. Train All AI Users
Anyone operating AI tools must understand their limitations, risks, and legal implications.

8. Document and Track Everything
Keep logs, rationale, and key steps. Auditability and transparency are essential.

24/07/2025