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We Need to Talk About … the EU AI Act!

Maxi Scherer
This article has been republished with permission. The original publication can be located within the Kluwer Arbitration Blog.

There has been a lot of talk about artificial intelligence (“AI”) in international arbitration in recent years.  I vividly remember when I gave the keynote speech on “International Arbitration 3.0 – How Artificial Intelligence Will Change Dispute Resolution” at the Vienna Arbitration Days 2018.  At the time, people were quite skeptical about the topic, but apparently intrigued enough to select it at the GAR awards as the best lecture of the year.  Since then, the international arbitration community has evolved, and it is now undisputed that AI systems have a significant and increasing impact on international arbitration (see e.g., Maxi Scherer, Chapter 39: Artificial Intelligence in Arbitral Decision-Making: The New Enlightenment?, in Cavinder Bull, Loretta Malintoppi, et al., (eds), ICCA Congress Series, Volume 2, pp. 683 – 694 (2023)).  For instance, counsel frequently employ AI tools for document review and research purposes, and there is a rising demand for these systems in transcription and translation tasks.

As AI systems continue to develop, it is also important to create a harmonized ecosystem where AI “collaborates” effectively with arbitration practitioners – be it with counsel or arbitrators.  Among the most burning questions is whether there is a need to regulate AI, either broadly or in international arbitration more specifically.  Recently, I gave the 6th Sciences Po Mayer Brown arbitration lecture on the question “Do We Need to Regulate the Use of Artificial Intelligence in International Arbitration?”  While there is burgeoning regulation in court proceedings (such as by the UK Courts and Tribunal Judiciary and the Dubai International Financial Centre (DIFC)), very little exists that applies to international arbitration.  In April 2024, the Silicon Valley Arbitration and Mediation Center published the “Guidelines on the Use of Artificial Intelligence (AI) in International Arbitration,” as an attempt to propose some form of optional regulation.

On a broader level, the European Union Artificial Intelligence Act (the “Act”), a landmark legislation that lays down harmonised rules on artificial intelligence, was adopted by the European Parliament on 13 March 2024 and will enter into force after its publication in the EU Official Journal.  Despite being described as the most comprehensive piece of legislation in the AI field, the international arbitration community has paid little, if any, attention to this regulation and few practitioners are aware that the Act has the potential to apply to international arbitration proceedings (but see here), and in particular to arbitrators.  This blog discusses how the activities of arbitrators may fall within the material, personal, territorial and temporal scope of the Act.

Material Scope

The Act takes a risk-based approach, which means that it classifies economic activities according to the likelihood of harm caused by AI systems, and the regulatory duties vary according to this level of risk (Recital 26).

For instance, there is a general duty of AI literacy, which means that providers and deployers of AI systems shall take appropriate measures to gain the knowledge and skills to “make an informed deployment of AI systems, as well as to gain awareness about the opportunities and risks of AI and possible harm it can cause” (Recital 56).

Activities of arbitrators may be classified as “high-risk”.  Annex III, Art 8(a) provides that “AI systems intended to be used by a judicial authority or on their behalf to assist a judicial authority in researching and interpreting facts and the law and in applying the law to a concrete set of facts or used in a similar way in alternative dispute resolution” (emphasis added) are to be classified as high-risk AI systems.  The reference to “alternative dispute resolution” is likely to include international arbitration.  This is confirmed by Recital 61 which provides that “AI systems intended to be used by alternative dispute resolution bodies for [the purposes of the administration of justice and democratic processes] should also be considered to be high-risk when the outcomes of the alternative dispute resolution proceedings produce legal effects for the parties.” (emphasis added).

Article 6(3) contains exceptions to the high-risk classification, namely where otherwise high-risk AI systems are used in a way that does not pose a significant risk of harm to the health, safety or fundamental rights of natural persons.  This applies to situations in which:

“(a) the AI system is intended to perform a narrow procedural task;
(b) the AI system is intended to improve the result of a previously completed human activity;
(c) the AI system is intended to detect decision-making patterns or deviations from prior decision-making patterns and is not meant to replace or influence the previously completed human assessment, without proper human review; or
(d) the AI system is intended to perform a preparatory task to an assessment.”

In which circumstances these exceptions apply is not immediately clear from the Act.  Nor is the answer clear to the critical question whether one can conclude from Article 6(3) that international arbitration will fall under the high-risk activities category only if natural persons are concerned.

Personal Scope

The Act distinguishes between different regulated entities.  Providers, importers and manufacturers of AI systems bear the most stringent obligations under the Act (Articles 16, 25).  However, “deployers” of AI systems also fall under the scope of the Act. A “deployer” is defined in Article 3(4) as “any natural or legal person, public authority, agency or other body using an AI system under its authority except where the AI system is used in the course of a personal non-professional activity.”  Arbitrators, as natural persons using AI systems for a professional activity, thus fall under the personal scope of the Act.

Deployers of high-risk activities have to follow a certain number of regulatory obligations, such as the obligations to (i) take appropriate technical and organizational measures to ensure that the AI systems are used in accordance with their instructions (Article 26(1)), (ii) monitor their operation (Article 26(4)), (iii) assign human oversight to natural persons who have the necessary competence, training, authority and support (Article 26(2)), (iv) ensure the input data is relevant and sufficiently representative (Article 26(4)), and (v) keep the logs automatically generated by the system for a period of at least six months (Article 26(6)).  In certain situations, deployers have additional duties to carry out data protection impact assessments (Article 26(9)) and cooperate with national EU authorities (Article 26(12)).  In case of non-compliance, financial and non-financial sanctions are foreseen (Article 99).

Territorial Scope

The Act outlines its territorial scope in Article 2.  The Act applies if the deployer of AI systems either (i) has its place of establishment or is located within the EU (Article 2(b)); or (ii) has its place of establishment outside the EU but “where the output produced by the AI system is used in the Union.” (Article 2(c)).

The application of this provision to international arbitration is not straightforward.

Concerning Article 2(b), one could argue that the place of habitual residence of an arbitrator is where she is established or located.  However, this means that in a three-member tribunal, one or two arbitrators might be covered by the Act, while the other one or two might not.  An interpretation that favours a more uniform application amongst tribunal members would be to consider the place of establishment of the tribunal (as opposed to its individual members), which would likely be determined by the seat of the arbitration.

It is even more complicated to assess in which circumstances the Act could apply if we consider Article 2(c).  The interpretation difficulty turns around the requirement that the output produced by the AI system must have been “used” in the EU.  Arguably, if AI systems have been used by the arbitral tribunal, the AI system’s output has impacted the award, which in turn has legal effects on an EU-based party.  Is the location of one of the parties in the EU thus sufficient to conclude that the “output produced by the AI system is used in the EU”?  Or, otherwise, is it sufficient that an award could ultimately be enforced against assets located in the EU?  If one were to answer in the positive, this would mean that the Act could have potentially significant extraterritorial consequences: it could apply even if the seat of the arbitration is outside the EU, the arbitrators are based outside the EU, and one of the parties is located outside the EU.

Temporal Scope

The Act will be implemented in stages.  Most provisions related to high-risk AI systems will apply 24 months after the Act has entered into force (Article 113).

Fortunately, this means that the international arbitration community still has time to consider the extent to which the use of AI in international arbitration by arbitrators falls under the Act.  What is sure, however, is that we need to engage in the debate!

I wish to thank Russell Childree, Dr. Ole Jensen, Andra Ioana Curutiu, Alice Dupouy, and Alexey Schitikov, colleagues at Wilmer Cutler Pickering Hale and Dorr LLP, for their research and assistance.

Oxymorons R Us

John Lande, JD, PhD
This post is republished with permission. The original article is published within the University of Missouri School of Law the Legal Studies Research Paper Series.

In ‘Evaluative Mediation’ is an Oxymoron, Kim Kovach and Lela Love argued that evaluative mediation described in the famous Riskin Grid is a contradiction in terms – essentially not really mediation or the way that mediation should be. Len Riskin responded, “It is too late for commentators or mediation organizations to tell practitioners who are widely recognized as mediators that they are not, in the same sense that it is too late for the Pizza Association of Naples, Italy to tell Domino’s that its product is not the genuine article.”

Although I share Len’s perspective, this article is not about what should or should not be legitimately considered as mediation.

Rather, this article argues that the concepts of facilitative and evaluative mediation themselves are oxymorons. I analyzed problems with these concepts in various pieces in Part 3 of the Real Practice Systems Project Annotated Bibliography (Including the classics Confusing Dispute Resolution Jargon, Houston, We Have a Problem in the Dispute Resolution Field, and “Labels Suck”). So I will not repeat those critiques here.

This article riffs on comments at an excellent program during the ABA Section of Dispute Resolution’s annual conference to illustrate how oxymoronic these terms have become. It suggests ways that we in the dispute resolution field can decide to avoid speaking oxymoron.

Mediators’ Proposals

The ABA program described techniques for making mediators’ proposals. This procedure usually is a last resort after extended unsuccessful efforts to reach agreement. Typically, it is used in high-stakes cases where both sides are represented by attorneys. The parties want to settle but worry that one or both sides are taking unreasonable positions. The procedure can help parties feel more confident in their decisions.

Mediators make these proposals only if both sides agree to the procedure. Indeed, some mediators use the procedure only if suggested or requested by one or both of the parties. Mediators gives a proposal confidentially to each side. It reflects their perception of the terms that both sides would accept. It is not a prediction about the likely court outcome if the case were adjudicated.

If both sides accept the proposal, they have an agreement. If either or both parties reject the proposal, there is no agreement. A party that rejects the proposal doesn’t know if the other party has accepted it or not.

As this description illustrates, this is a specific procedure that the parties agree to, not a unilateral casual suggestion by a mediator.

Two Oxymorons

During the discussion, one person referred to mediators “facilitatively” making a proposal. Another person described mediators “empowering” the parties by asking how much risk they were willing to take. For example, if plaintiffs are willing to take more risk that the defendants would not accept the proposal, the mediators would propose a higher amount. If the plaintiffs were willing to take less risk, the mediators would propose a lower amount.

In the definitive publication defining facilitative and evaluative mediation, facilitative mediation, includes helping parties develop and exchange proposals (in contrast to evaluative mediation where mediators may propose agreement). Thus, by definition, mediator proposals are inherently evaluative and can’t be facilitative.

A recent article by Robert A. Baruch Bush, a founder of transformative theory, identifies the goals and purposes of transformative mediation as “[s]upport[ing] parties in changing their conflict interaction from negative / destructive to positive / constructive; help them recapture strength and understanding.” It requires mediators to “[p]rivilege party decision-making on all matters – content and process.” The reason for this approach is to promote “party empowerment and interparty recognition.” The article states that the “emphasis in the transformative framework on party empowerment opposes any effort by the mediator to bring the parties toward reconciliation.”

Arguably, mediators making proposals and inquiring about their preferred level of risk is transformative by asking about parties’ preferences about the procedure. However, it is designed to promote agreement and it is not designed to promote empowerment or constructive interactions between the parties. Nor is it how mediators generally understand transformative theory.

Presumably, members of the audience kinda, sorta, probably understood what the speakers meant by using the terms “facilitative” and “empower.”

But why misuse terms from traditional mediation theory when there is plain language that expresses these ideas more clearly and without contradicting traditional theory?

How You Can Avoid Speaking Oxymoron

As a public service, this article provides the following suggestions to help you avoid the embarrassment of speaking oxymoron. These suggestions have the added value of making our language intelligible to civilians.

Instead of using the term “facilitative,” we might say the following, adapted from Riskin’s original account:

  • Helps parties develop ideas and proposals
  • Helps parties evaluate ideas and proposals
  • Asks parties about consequences of not settling
  • Asks parties about likely court or other outcomes if they don’t settle
  • Asks parties about the strengths and weaknesses of the arguments

Note that these are very different techniques. Mediators often use some but not all of them in a given case.

Listening to people using the term, however, they kinda, sorta, probably mean some of the following:

  • Is friendly and respectful
  • Helps parties understand their case and their options
  • Doesn’t (explicitly) pressure parties

Here are the elements of “evaluative” mediation from Riskin’s article:

  • Urges / pushes parties to accept settlement
  • Develops and proposes agreements
  • Predicts court outcomes and consequences of not settling
  • Assesses strengths and weaknesses of each side’s case

Again, these are different techniques and mediators who are allegedly evaluative don’t use all of them in a given case. When people use the term, they kinda, sorta, probably mean some of the following:

  • Is aggressive
  • Doesn’t listen to parties
  • Pressures parties to accept the mediators’ ideas

Bush’s description of empowerment is included above. When people use the term “empowerment,” they kinda, sorta, probably mean that the mediator helps parties understand their case and options so that they feel more informed, confident, and assertive and thus can protect their own interests.

Maybe people mean other things when they use the traditional terms of facilitative, evaluative, and empowerment. Who knows? When people use these terms, we don’t really know what they actually mean. We kinda, sorta, probably think we know. But we don’t really know.

As so-called communication experts, it would be nice if we could speak and write so that people actually do know what we mean.

A radical concept.

Try it. You’ll like it.

Author Biography

John Lande, JD, PhD is the Isidor Loeb Professor Emeritus at the University of Missouri School of Law and former director of its LLM Program in Dispute Resolution. He earned his JD from Hastings College of Law and his PhD in sociology from the University of Wisconsin-Madison. Since 1980, John has practiced law and mediation in California, and since the 1990’s, he has directed a child protection mediation clinic.

The American Bar Association has published John’s books, including ‘Lawyering with Planned Early Negotiation: How You Can Get Good Results for Clients and Make Money‘ and ‘Litigation Interest and Risk Assessment: Help Your Clients Make Good Litigation Decisions‘ (co-authored with Michaela Keet and Heather Heavin).

John frequently writes for the Indisputably blog and has received many awards for his scholarship, most recently the American Bar Association Section of Dispute Resolution’s award for outstanding scholarly work. You can download articles on a wide range of dispute resolution topics from his website.

Integrated Services: A Key Part of the Solution to Coercive Control in Australia

Becky Strauss, Monash University

Every four days in Australia, a woman is murdered by a former or current intimate partner. For decades, the “battered woman” stereotype prevented family violence from being recognised beyond physical in nature. However, recently coercive control has been labelled just as damaging as physical violence, being deeply and inherently traumatising by reducing any sense of identity and autonomy of the victim-survivor. In this post, I will explain the socio-political context of family violence in Australia and how this has shaped the nature of coercive control. Then, I will explore how integrated community services are part of the holistic solution required to reduce the effects of coercive control on victim-survivors.

Family Violence in Australia

Family violence includes violence, threats or other behaviour that coerces or controls a member of family. Family violence is multifaceted: it can be perpetrated in many ways, and the effects can be experienced differently by every victim-survivor. Family violence is inherently a gendered issue, affecting predominantly female identifying people. Family violence is the leading contributor to death, obesity and illness for Victorian woman aged 15 to 44. The exploration of why family violence is a gendered issue is complex and requires discussion of socio-political factors including power, gender roles, colonialism and racism. For the purposes of this post, the existence and nature of family violence will be simplified. Australia has a patriarchal foundation, rooted in colonial past centring white, hegemonic masculinity. This has created a climate to harbour inequality and drive violence against women and children.

Critical feminism has brought an important shift of the discourse from violence against women being “behind closed doors” to a political and social responsibility. Nevertheless, Australia continues to foster political and social environments characterised by power imbalances and sexism. A woman being raped by a Member of Parliament makes her a “lying cow” according to her Ministerial employer. Australia’s only female Prime Minister is not immune to the effects of sexism and inequality- Julia Gillard’s outstanding “Not Now, Not Ever” speech has been labelled as a “furious attack” rather than a necessary confrontation of persistent misogyny in Australian Parliament. Women cannot escape inherent sexism, as even in the workplace we are monetarily worth 21.7% less than men. Family violence in Australia is therefore, unmistakably, a gendered issue: 73% of perpetrators of family violence are men, and 71% of victim-survivors are women and the most identifiable risk of factor for becoming a victim-survivor of family violence, according to the Australian Bureau of Statistics, is being ‘female’.

Coercive Control in Australia

Coercive control involves intimidation and coercion to control a victim-survivor, create fear and diminish any sense of autonomy. The reality for a victim-survivor experiencing coercive control includes a life moulded by terror, isolation and disempowerment through “brainwashing” and “complete control and degradation” that is “tantamount to torture”. Coercive control has profound, long-lasting effects on victim-survivors with extensive impacts beyond the legal realm and into economic, social and psychological health. Coercive control can be characterised by patterns of non-physical abuse entrapping victims through economic, social and psychological abusive strategies. While this post discusses the generalised effects of coercive control, it is important to note that the experiences and effects of coercive control will be different amongst people living with disabilities, LQBTQIA+ communities, culturally linguistic and diverse (CALD) people, Aboriginal and Torres Strait Islander people and people living in rural and remote communities.

  • Economic Abuse

Economic abuse is a form of coercive control involving behaviours that control a woman’s ability to acquire, use and maintain economic resources, threatening economic security and self-sufficiency. Coercively controlling economic abuse encompasses control of economic resources like use of a car, preventing a victim-survivor from engaging in paid work, restricting access to obtaining tertiary qualifications, and even denying a victim-survivor necessities like food and clothing. Economic abuse causes victim-survivor to be economically dependent on the abuser, as the abuser can control her ability to become self-sufficient. The most significant effect of economic abuse- and the reason why men use it- is that prevents a woman from leaving a coercively controlling relationship. Many victim-survivors cite that the main reason they could not leave their abuser was due to how economically unstable they would be if they were to leave. For the first 6 years following divorce, women often struggle economically compared to men, highlighting how the effects of economic control during a relationship by an abuser continue to affect women years later.

  • Social Abuse

Social abuse in relation to coercive control includes an abuser isolating a victim-survivor through control of social activity, deprivation of liberty or the creation of unreasonable dependence. Social abuse encompasses the abuser limiting access to family and friends, and even constantly monitoring the victim-survivor, as well as more “subtle” measures such as by hiding car or house keys. A significant element of coercively controlling social abuse is restriction of a victim-survivors access to social support, leading to their isolation. Isolation is a particularly dangerous effect of social abuse is how it diminishes the capacity of the victim-survivor to confide in friends and family and seek help. Victim-survivors of social abuse often report a feeling of entrapment as they are prevented from keeping themselves and their children safe and leading an autonomous life, inhibiting the ability to escape their abuser.

  • Psychological Abuse

Psychological abuse as a form of coercive control involves intimidation, shaming, verbal abuse, manipulation and micro-management of the victim-survivor. Perpetrators maintain control through threats of violence or death to induce a state of constant terror. Psychological abuse is a social determinant of mental illness in Australia, and internationally. Constant criticism from the abuser can lead to low self-esteem in victim-survivors, as they are mentally manipulated into believing the perpetrator through the power imbalance created. Even after direct abuse had ended, victim-survivors continue to experience effects- emotional maladjustment and character disorders can develop, and in some cases, victim-survivors disassociate and construct a new personality, leading to a later diagnosis of a multiple personality disorder. Psychological abuse has been reported to lead to chronic social isolation, depression and stress, accompanied by a feeling that victim-survivors will not be believed, or that they cannot be helped. Importantly, a paradoxical attachment can develop between a victim-survivor and coercively controlling abuser, known as “trauma bonding”. This denotes the difficulty of psychologically detaching from the relationship. Coercive controlling psychological abuse leads to fear for safety, causing women to leave the family home. This is a leading cause of homelessness for women and children.

Integrated Community Services: A Potential Solution?

Although the legal system is one of the tools needed to address coercive control, it is by no means capable of addressing the totality of intersectional issues that can arise. Victim-survivors often experience intersectionality and have diverse needs requiring multiple interventions by different services. Many have to navigate their own pathway to accessing the support they need to address the effects of coercive control. Integrated family violence services are a coordinated approach bringing together disciplines to provide effective and collaborative support to victim-survivors experiencing the effects of family violence.

This post focusses specifically on how an integrated service with social workers and lawyers can help address the effects of coercive control on victim-survivors. The term “social workers” is an umbrella term describing professionals that can provide a wide range of support to address social, emotional, financial, physical, mental and economic needs. In this post, I argue that bringing social workers and lawyers together in integrated services has four key benefits.

  • Integrated services provide holistic, victim-survivor centred approaches

By working within an integrated practice, social workers and lawyers provide greater support to victim-survivors than they could alone. This allows for more coordinated responses to address the effects of coercive control and the intersecting needs of victim-survivors. Social workers can identify effects of coercive control beyond the legal realm which lawyers may not always be able to do, centring the victim-survivor. Social workers bring skills in crisis intervention, assessment of needs and support to address the economic, social and psychological effects of coercive control. For example, a lawyer may focus on a victim-survivors immediate need, perhaps being to obtain a family violence intervention-order. Meanwhile, a social worker would consider the bigger picture and identify community services the victim-survivor may benefit from to help address the effects of coercive control. They may connect the victim-survivor with services to help them gain employment and free childcare services, or a psychologist to address and work through the trauma they have experienced. This provides a holistic approach, connecting victim-survivors with avenues of support to address multi-faceted effects of coercive control.

  • Integrated services can provide improved legal and social outcomes for victim-survivors

Engaging with lawyers and the legal system is often stressful, and there is a general mistrust towards lawyers by the Australian community. Victim-survivors may require extra support to engage with legal services. An integrated service with social workers who have strong interpersonal and communication skills can assist lawyers to build rapport and trust with victim-survivors. Social workers can also facilitate communication when discussing legal issues through their ability to recognise when a victim-survivor might not understand legal jargon, providing greater support for the victim-survivor when engaging in legal processes.  Victim-survivors also have better social outcomes with integrated services: social workers can conduct in-depth assessments of victim-survivors, thus once the “legal work” is completed, they can address the intersecting effects arising from coercive control, including homelessness, mental health and substance abuse. Addressing legal and social needs has the effect of reducing stigma a victim-survivor may feel, as well as increasing wellbeing and social participation.

  • Integrated services can help to prevent re-traumatisation

Victim-survivors can experience disempowerment when engaging with a system requiring them to constantly reiterate their traumatic experiences. Victim-survivors have various entry points into the family violence service system, including community legal services, as well as healthcare, social and family services. This can create an artificial division between the overlapping services providing support for victim-survivors, which can lead to re-traumatisation as the victim-survivor is forced constantly re-tell their story. Re-traumatisation can be avoided through integrated services sharing information as a trauma-informed approach. For example, a social worker and a lawyer may attend interviews with a victim-survivor, which can allow the social worker to make various referrals to other community services using the information the victim-survivor supplied (with consent) so that she does not have to repeat her trauma. This can reduce the stress and mental impact the victim-survivor would have experienced if she had to tell her story to different professionals- a social worker may make referrals to services to help the victim-survivor build her resume, obtain employment, connect with other victim-survivors, provide free childcare, financial counselling, psychology services or social housing services.

  • Integrated services can facilitate autonomy and empowerment of victim-survivors

Integrated services enhance feelings of safety for victim-survivors, contributing to their determination and strength to persist with justice system processes to hold perpetrators of coercive control accountable.  This underpins the recognition that they are not to blame for the abuse. Clients of integrated services also express their desire to empower others as wanting to “give back” and “make a difference” to other women as “survivors, not victims”. Clients of integrated services report significant positive reduction of the effects of coercive control from having engaged with integrated services, including an ability to access further education, psychological and emotional improvement, increased self-confidence and general happiness.

Next Steps

Coercive control is a form of family violence involving intimidation and coercion to control a victim-survivor or cause them to be fearful while diminishing any sense of autonomy. It can encompass many forms, including economic, social and psychological abuse. Due to deeply rooted notions of power asymmetries that are reinforced by gender stereotypes there is no easy solution to family violence itself. However, integrated services with lawyers and social workers offer part of the solution when responding to the effects of coercive control. While Australian policy recognises the importance of integrated family violence services, there is consistently a lack of funding by the government to implement strong, integrated services. Current funding for the establishment of integrated services does not match the community need, which inhibits the reach of integrated practice for victim-survivors of coercive control.  Long-term and increased funding is urgently required to address the effects of coercive control on victim-survivors through the develop and maintenance of integrated practice for the improvement of family violence services.

Author Biography

Becky Strauss is an undergraduate law student at Monash University with a particular interest in the social and legal implications of family violence. During her degree, she has completed a range of clinical placements in which she has provided support and advice to family law clients dealing with the consequences of family violence and interrelated legal problems.
Contact Becky via LinkedIn.