How AI has supercharged dispute resolution and arbitration

Episode Notes

Transcript

Announcer:

Welcome to the ABA Journal, Legal Rebels Podcast, where we talk to men and women who are remaking the legal profession, changing the way the law is practiced and setting standards that will guide us into the future.

Victor Li:

The use of arbitration as an alternative to litigation has been rising for a while now. Fueled by favorable Supreme Court rulings and long delays in the court system, arbitration has emerged as a faster, more streamlined option for parties looking to resolve disputes. The emergence of generative artificial intelligence has supercharged arbitration even more, allowing for automated dispute resolution without the need for human experts to preside over matters. The American Arbitration Association has been at the forefront of this, launching an AI arbitration tool, which uses AI to summarize claims, analyze evidence, and generate draft awards and construction disputes. The tool is voluntary and is used mainly for document only cases. Arbitration, however, has its critics. Some claim it favors companies while at this point to its speed as insufficiently protective of parties, especially individuals. And of course, AI automated dispute resolution brings up a lot of other issues, including distrust of technology and consumer protection.

My name is Victor Li and I’m assistant managing editor for the ABA Journal. My guest today is Colin Rule. Colin is president and CEO of ODR.com, a for- profit subsidiary of the American Arbitration Association/International Center for Dispute Resolution. He co-founded Modria, an online dispute resolution provider and was director of online dispute resolution at eBay and PayPal. Colin is here to talk about how AI has impacted dispute resolution and where things might be heading. Welcome to the show, Colin.

Colin Rule:

Thanks so much, Victor. I appreciate the invitation.

Victor Li:

Of course, anytime. So obviously I just gave a very quick version of your bio. Could you tell me a little bit more about yourself and your background?

Colin Rule:

Sure. I am a dispute resolution nerd. I got originally trained in mediation when I was undergrad back in the late ’80s. And I said, “You know what? This is what I want to do with my life.” So I wrote my thesis on collegiate mediation programs and then got an unpaid internship at the National Institute for Dispute Resolution in Washington. So that was long before there was any technology in dispute resolution. And I practiced as a mediator and a multi-party facilitator for a couple of years. But then the internet appeared and as a nerd and a lover of dispute resolution, I thought, “You know what? This is me. This is what I should do. ” So I started one of the first online dispute resolution service providers called Online Resolution in 1999. I wrote a book called Online Dispute Resolution for Business. And one day eBay called me up and said, “Hey, we need you.

” And that’s what brought me out to Silicon Valley. So my whole career has been at the frontier of technology and dispute resolution. And it’s interesting because back in the late ’90s, early 2000s, there really was no overlap, but we had the pandemic and the rise of Zoom and now we have artificial intelligence and technology’s a big topic in the world of dispute resolution. So my best friend who’s my CMO here at odir.com, he says, “You’re like the dog that caught the car.” It’s like, I certainly didn’t create any of this. I just sort of said, “Hey, I’m going to plant my flag here.” And sometimes they say Mohammed goes to the mountain and other times the mountain comes to Mohammed. And this is a case of the later. So everybody keeps looking to me like, “Hey, what’s this going to look like when AI is fully permeated into the world of dispute resolution?” It’s like, gee, I don’t know, but let’s figure it out together.

That’s kind of the way I feel.

Victor Li:

Yeah. No, I mean, sometimes you have to be in the right place when the opportunity hits, right?

Colin Rule:

Yeah. My grandfather always used to say to me, “Colin, don’t build your business where the highway is, build your business where the highway is going. ” So I guess I did that somewhat unintentionally. I’m not rooting for a lot of this disruption, but I care a lot about dispute resolution and access to justice and providing fast and fair resolution. So the question is, how do we civilize these technologies and put them to work achieving the same objectives that we’ve had in the dispute resolution field since time immemorial, which as I say, is fast and fair resolutions for all.

Victor Li:

Gotcha. Well, so I mean, obviously a lot of people who listen to this program are lawyers and they all understand the difference, but for people who might not or people who don’t really practice in these areas, how would you describe the difference between dispute resolution and your classical litigation lawsuit adversarial system?

Colin Rule:

Sure. Well, if you think writ large about dispute resolution, just by being a human on earth, we encounter disputes. Our self-interest collides with other people’s self-interest. So we have to figure out how are we going to resolve those problems. And if you look back through human history, I mean, I’ve got a great image on my computer of a dispute from ancient Sumeria over copper ingots where somebody bought some copper ingots and they weren’t as high quality as they thought they were going to be. So they used their uniform clay tablet to complain about, these are low quality ingots and I want a refund, which essentially is the exact same thing I did 60 million times a year when I was at eBay resolving disputes between buyers and sellers. Sometimes I talk to law professors who act as if the civil code came down off the mountain on stone tablets, but this is a relatively modern invention.

There are many, many ways that people can resolve their disputes. And if you look at human culture all around the world, every human community, every human society has had to find a way to resolve disputes in a peaceful and fair way. And I think actually the mechanisms we use mainly in dispute resolution, which I’m thinking about negotiation and mediation and evaluation, which arbitration is one form of evaluation, those things predate modern judicial systems and litigation systems by thousands of years. So essentially the question is, and there’s a great quote from Carlon in a book called The Bramble Bush, which was a book he wrote, I think it was back in the 20s or 30s, talking to new law students. And he said, “What’s this law business about really? ” And he said, “Fundamentally, the business of law is about resolving disputes, preventing disputes from arising and then resolving them once they do arise.” And I think that the litigation system, the judicial system is one very complex and sophisticated dispute resolution mechanism, but it’s not that hard to envision many others.

And now that we’re in the world, we’re in a world that’s digitizing and so much of our lives are moving online, well, that opens up really exciting new possibilities for how we can resolve disputes. The judicial system just by dint of the fact that it was created in a prior era is very tied to geography because at that time when it was being designed, geography was an immutable fact. It’s like, well, where you are dictates the laws that govern whatever dispute arises. But of course online, any of us can pull out our phone and go swipe, swipe, swipe, and engage in a transaction with any person in any other area of the world. The internet doesn’t really care about geography. So that makes the judicial system kind of a tough fit with the way our new online lives operate. So online dispute resolution really is an attempt to think about how can we build a justice system that works the way the internet works where you don’t really have to tie it to geography.

It’s not tied to the coercive power of the nation state to enforce your outcomes. There are other ways that you can do that and that we think about virtual currencies and blockchain and Bitcoin and domain name disputes. These are disputes that transcend geography and we have a lot of experience building resolution systems that work for those kinds of new online stateless disputes. So what we’re seeing, obviously the judicial system, litigation is not a monolith. It evolves in response to pressure and cultural change. And these are huge, huge tides of change that are coming in as a result of technological innovation. And the judicial system will continue to innovate and evolve in response to some of those changes. But I think a lot of the ideas that are coming into the courts and coming into the practice of law have already been hashed out out here in Silicon Valley.

At eBay, we had to build a justice system and we had 250 million users. And at the time we would have been the eighth largest country in the world. Now I think eBay’s a lot bigger than that, but I really thought about it as building a justice system for a virtual country. And I think some of the ideas that we crafted at eBay have now made their way into the courts and the judicial systems around the world. So I’m sorry, I probably over answered your question, Victor. Yeah.

Victor Li:

Well, I did want to ask about eBay specifically, because I mean, obviously that’s something that a lot of people use. I use it. Knock on wood, I haven’t gotten into a dispute with anybody in a while now, but it has happened in the past. So I have gone through your system.

Colin Rule:

What I always say to people is, “Did you get your money back?” And if they say, “Yeah, I got my money back.” I say, “Yeah, I built that system.” And if they say, “No, I didn’t get my money back.” I said, “Oh, I left a long time ago and I

Victor Li:

Messed it up.” They really changed things and it’s totally not to say. I think I heard you talk about it a while ago at one of those conferences I went to, but the concepts seemed very … I don’t want to denigrate what you did, but the concepts seem kind of obvious, right? It’s like, did you pay or not?

Colin Rule:

Sure.

Victor Li:

Is there documentation for this or not? But the idea that it could be done without an actual human referee or somebody got a human overseeing it, I think maybe that gave a lot of people some pause or people were like, “Wait a minute, what’s going on here?” So how did you bridge those two competing streams and make it so that, okay, well, you take this kind of pretty easy way to prove whether or not you did something or not, but then kind of merge it with something that maybe people weren’t comfortable with.

Colin Rule:

Well, when eBay first called me, I thought the same thing that you thought, Victor. I had spent a couple of years resolving large multi-party environmental and energy related conflicts in the Northeast. I was resolving disputes over putting 160 windmills and entucket sound and it was complicated. There was a lot of scientific and technical information, lots of stakeholders and they said, “Hey, we want you to come out to eBay and resolve buyer seller disputes.” I’m like, “Is this really interesting?” I bought my item and it didn’t show up. But then I got out to eBay and I realized the scale is really the challenge. If you have 60 million of these disputes a year, it starts to get really interesting again because you’re designing, this is what we now call DDSD, digital dispute systems design. Who are all the stakeholders? And it’s not just, I mean, most people when they think of eBay, they think of buyer initiated disputes because that’s the experience most people have.

I bought my item and it never showed up or I bought my item and it showed up and it’s not what I thought it was going to be. And there are lots of those cases, but there’s many, many other kinds of disputes at eBay. For instance, if someone leaves a feedback for another user that they think is misleading or false or defamatory or if one user steals the images from another user and selling an item and makes it look like they created it. So there’s IP related disputes. We had trademark take down disputes, we had feedback disputes, we had payment disputes where somebody would bid on an item and win it and then never follow through and pay. So suddenly it got kind of interesting again. And as I said, the volume of the cases that we were handling, this in 13 diferent languages all over the world is in excess of the US civil court system and we only had 25,000 employees.

So as you said, we had to automate this at a high scale and nobody had ever done that before, but eBay was willing to spend millions and millions of dollars on building the software to do that. I think because we got to that point where 90% of those 60 million cases could be resolved without a human from eBay touching the case, it really got the interest of the courts and said, “Wait a minute, how could we leverage some of these tools as well to deliver online resolutions?” And that was long before we had artificial intelligence in our toolbox.

Victor Li:

Yeah. So how’d you go from that to Modrio then?

Colin Rule:

Yeah. Well, they had an internal innovation competition both at eBay and PayPal because they were the same company at that time and we created something called the community court, which was a crowdsourced jury process. So if two users on eBay or PayPal had a dispute, they could take it to the community court, they’d each be able to make their case and respond to the other side’s arguments. And then we brought in a panel of users, people that we tested to make sure they’d never interacted with the parties in the case and they had a very high reputation for trustworthiness on the site and they would all vote and whoever got the majority of the jury would win and eBay would enforce the outcome. So we brought this to the internal skunkworks competition both at eBay and PayPal and we won a bunch of awards. I essentially said to my friends in the innovation team, “Look, there’s a business here outside of just eBay.

I mean, everybody needs these community courts. Will you let me spin out this technology and create a company?” And eventually they said yes. So I spun that out and I got some funding. My partner, who I worked with very closely at PayPal, Chitunagarajan, was at the PayPal office in Chennai, India, and we decided to start this company together. That’s when we created Modria. So really we took that eBay technology and built on top of it to build essentially a digital dispute systems design toolbox to resolve any kind of dispute. And over the next six years, we dealt with many, many other kinds of cases, not only commerce cases. I mean, eBay obviously is a marketplace for tangible items, but we started to deliver services to places like Airbnb or Lyft or TaskRabbit or Upwork because they all had similar kinds of cases. And then we moved into offline.

We did property tax assessment appeals. We worked with courts, with consumer protection agencies. So there were lots of applications for that core eBay technology outside of eBay and that’s what we built at Modria.

Victor Li:

Gotcha. And so how’d you end up with AAA then?

Colin Rule:

Well, a couple more steps there. We got acquired. Modrie was acquired by a company called Tyler Technologies, which is kind of the Microsoft of CoreTech in the US. 50% of US citizens live in an area where Tyler runs some aspect of the courts and they saw the courts were getting much more interested in ODR. So I spent three years at Tyler and then I took the job as CEO of mediate.com and mediate.com is really the number one online community for mediators. I had worked there before in the mid ’90s, but it was started in 1996. And then we started od.com under mediate.com. So we were building, again, targeting this market, the growing market for online dispute resolution and online case management for dispute resolution organizations. And then Bridget took over as CEO of AAA, so inspiring. Obviously Bridget McCormick, former Chief Justice of the Michigan Supreme Court, but she’s a real visionary on technology.

She and I gave a talk at the ALI conference in Washington DC and had lunch afterwards and we started to realize there was a lot of synergy. So that was when we agreed to be acquired by AAA in June of 2024. So we’ve been close partners with AAA and ICDR ever since and it’s been a wonderful relationship.

Victor Li:

Gotcha. Before generative AI became generally available to the public and whatnot, where did you see sort of the future of ODR heading? How much did it change when you did see generative AI come to the picture?

Colin Rule:

Yeah. So there’s a core concept in the field of online dispute resolution. Not only do we have a practitioner community, there’s also a very vibrant academic community. And the father of online dispute resolution is a guy named Ethan Catch, who’s an emeritus professor at UMass Amherst. Ethan wrote the first book in ODR titled Online Dispute Resolution with his co-author, Janet Rifkin, who was another ADR pioneer. I wrote the second book, which is Online Dispute Resolution for Business, which came out right after Ethan’s book. But Ethan and Janet introduced a concept called the fourth party. So if you think about party one and party two are the disputans, party three is the human neutral, that could be a mediator, an arbitrator, an ombuds, a conflict coach. And then technology’s a fourth party. So even back in the late ’90s, early 2000s, we had a clear idea of what is the fourth party good at.

We didn’t have AI at the time, but we thought, well, maybe it could help us manage documents, maybe it could help us process payments, maybe you could help us schedule meetings. And now of course, technology is the only way those things are done. Nobody would want to go back to the old days of putting the carbon paper and the kachunkachunk and credit card reader or whatever. You can’t even imagine going back to that world. But slowly, but surely more and more capabilities are being added into the fourth party. And for instance, when Zoom came out, actually Zoom started right across the hallway from my office in San Jose. And I met these couple engineers who had left Cisco because they’d been working on WebEx and they were sort of frustrated at how efficient the process had become and they started this company and I told them, “Oof, tough business.

You’re competing against Microsoft and Google.” Well, we think we have some things to add. Actually, one of the questions they said to me is, “What do you do? ” I said, “I do dispute resolution.” They said, “Well, would you use video conference for it? ” I said, “Sure, maybe one day, maybe one day we’ll do that. ” And they said, “Is there anything we could build into our platform that would make it more helpful for dispute resolution?” And I said, “Yeah, you know what would help us is there’s something we do called caucusing and it’s a breakout room and no video conferencing platform does that, but it’d be very helpful.” So they went and they built it and they came back and they said to me, “Hey, we built your discussion rooms, your breakout rooms.” And they came in and showed it to me. I was like, “Wow, okay.” So unfortunately they didn’t offer me any options because I wouldn’t be talking to you if they had.

I’d be on my private island in the Caribbean someplace. Should have

Victor Li:

Trademarked that.

Colin Rule:

Should have trademarked that. Actually, it didn’t work exactly. I wanted to be able to knock on the door of an individual breakout room. They didn’t build that for me, but you can broadcast all the breakout rooms. I mean, just being around the technology, video conferencing was not really a thing in dispute resolution in 2012. Maybe we had done some proof of concepts, but the courts tell me that COVID was a 30 year shove into the future because we had to try this and a lot of mediators who are my heroes, they had said to me for years, “You can’t do this online. You have to see the tapping foot. You have to smell the pheromones in the room. There’s no way you can do that. ” But then the pandemic forced them to do it. And now we know that 80% of mediations that happen, at least in the United States, are happening online first.

So face-to-face is the exception rather than the rule. So this is the way technology happens. In the ODR field, very few of these technologies were created specifically for us. They’re created more broadly, but then they go into our digital dispute systems design toolbox and then we can utilize them in our platform. So AI to me, again, when we were at eBay, I was trying to automate, but we didn’t have AI. So we were just using rules. We were using really a complicated set of if then rules to triage cases into the appropriate resolution channels. And most people, when they talk about AI, they think that they’re talking about LLMs. They’re talking about Gemini or Claude or ChatGPT. And of course, those are very powerful. LLMs are very powerful technologies. There’s many, many other kinds of machine learning that could be useful. And many of my friends are exploring some of those techniques that don’t have the same challenges with hallucination and they aren’t dependent on giant third party companies like OpenAI and Anthropic.

So innovation had been happening all the way along. I attended the International Conference on Artificial Intelligence and the law back in 2000 and there was some really interesting research going on. It’s just we didn’t have the computing power to realize the potential and now we do. And again, you just have to look out a couple years when we hit what they call the singularity when we have quantum computers and the power of a computer processor far exceeds the power of the human brain. So if you know what’s going on in terms of the innovation on the backend, you’ll realize that these are kind of the very, very early days of AI and we have an inkling of where this is going, but if you follow the arrows in the direction they point, much greater disruption lies ahead. So we in the ODR field are constantly trying to think, how do we integrate these technologies and preserve the core aspects of dispute resolution, which is accessibility, impartiality, neutrality, security, confidentiality.

So we actually created an organization, the International Council for Online Dispute Resolution and we’ve created ethical standards for the use of technology, especially AI in dispute resolution and we share those for free in 16 different languages. So that’s the big challenge now is these waves of disruption are hitting us and everybody’s going, “Oh my gosh, what’s the field going to look like in five years?” And having lived through prior waves of technological disruption, we just got to sit down and figure out what are the downsides of these technologies and what are the promises and potentials in the benefits of these technologies and how do we minimize the former and maximize the latter?That’s the challenge that we have in the ODR field.

Victor Li:

Yeah. All right. Before we continue, let’s take a quick break for a word from our sponsor and we’re back. So let me ask generally about the arbitration process. So how would you describe it and what are some advantages of it compared to litigation and what are maybe some drawbacks of it?

Colin Rule:

Sure. As I say, arbitration predates litigation. I actually was in the lobby of the Chartered Institute of Arbitrators in London and they actually have arbitration awards from the time of the Magna Carta where lords were arguing about if sheep from a neighboring lord can come over and graze on their land. So arbitration has been around for a long time. It’s actually an extension of what they call Lex Marketoria. So it’s a stateless form of evaluative dispute resolution. And again, the American arbitration, we’re celebrating our hundredth anniversary this year because there was a time back in the early part of the 20th century when the vision was that arbitration could be the basis of world government in essence and established world peace. Open agreements openly arrived at. So the AAA came out of that and there were a couple of very large organizations that similarly emerged in that era, the International Chamber of Commerce, which is very prominent in international arbitration organization.

Even the Federal Mediation Conciliation Service came out of that time period. So the vision was if two people have a dispute, they can come to a neutral forum and get a hearing and a fair resolution to that dispute. And AAA has provided that faithfully and that’s one of the reasons why it’s specified in more than a billion contracts per year because people rely on AAA to provide those kinds of services. But it’s not just AAA. Obviously there are other institutions within the US that deliver fast, fair, transparent arbitration services. I think about jams, I think about, we have a bunch of them out here in California do really great work, but AAA really sets the standard and I think for a long time established practice standards for how to do arbitration right. Now there are, as you say, you noted in the introduction, there are critics of arbitration.

My good friend, Tom Stepanowitz, who runs the Strauss Institute for Dispute Resolution at Pepperdine University, he’s talked about arbitration is sort of the new litigation. Sometimes these arbitrations, they can bring in all of the same procedural protections as a court. So it starts to look more like a private court system where you can have motions and you can have e-discovery and a lot of the goals in creating arbitration in the early days was to create panels of experts that didn’t require as much time to get up to speed and render a fair decision. So again, it’s really the parties have a lot of control in working with the arbitrator or panel of arbitrators to design the process appropriate to their needs. We have what we call European style documents only arbitration, which is an expedited process where there aren’t motions, there aren’t hearings, everything’s on the page and that can go a lot faster or you can design a really in- depth arbitration that has a lot of those same procedural steps that you have within the courts, but arbitration’s strength is its flexibility and a lot of times parties prefer arbitration because it’s confidential process.

So obviously if you have a sensitive commercial matter and you go to the courts, that’s going to be released publicly because that’s the way the courts work. So many parties mutually agree, “Hey, let’s do this in arbitration because not only do we have a little bit more control over the process, we can also agree to kep this information private.” So arbitration is really … And the Supreme Court has reinforced again and again the primacy of arbitration. There were big decisions like AT&T Concepcion that actually greenlighted the inclusion of arbitration clauses in contracts. So when you get a credit card or you get a bank account or you get a new cell phone, odds are there’s a clause in those contracts that say we will never go to court over this

Victor Li:

Arbitration.

Colin Rule:

Yeah. So again, I think even the judicial system, the highest court in the land is pushing many more cases towards arbitration because they know that it’s a better way in most cases for people to get resolution, to get justice in those cases. Do you

Victor Li:

Think those clauses actually kind of work against arbitration? Because I mean, a lot of people, they see those long contracts with like these mandatory arbitration clauses and they’re like, by signing here, you waive all civil relief. Do you think that that actually kind of makes people like not trust arbitration or distrusted or dislike it?

Colin Rule:

Yeah, I think it is a problem. I’ve actually talked to some of the lawyers that pioneered the use of what they call those predispute binding arbitration clauses with class action waivers and oftentimes they’ll be in the agreement in all caps as if somehow that makes it more likely that an individual consumer is going to read them because they never read any of that stuff. They just click yes and continue. I personally am not a fan of those. I don’t know if anybody cares about me. I’m not even a lawyer, but the American Bar Association Dispute Resolution Section came out against the use of those pre-dispute binding arbitration clauses with class action waivers, but they remain in use. And there have been a couple times the Consumer Financial Protection Bureau actually got very close to issuing a regulation that would have prevented their regulated banks from using those kinds of clauses and lawyers started to advise their clients, “Hey, you better get ready to take these things out of your agreements.” But it didn’t happen.

It didn’t happen. So we still have a lot of those clauses. And I do think when you talk about some of the perception of bias in arbitration, any study of arbitration reveals that a lot of that bias is not true. The resolutions that people get, it’s not like arbitrators are just splitting the baby in every case. That’s one stereotype and it’s not that they’re just deciding for the business in every case. That’s another stereotype. That’s actually not the case. And I worked very closely at AAA. I know these neutrals and I know people work very hard to deliver fair outcomes in those processes, but a lot of those misapprehensions remain because of, I think, abuse of dispute resolution. Frankly, that’s what I think it is for these pre-dispute binding arbitration clauses with class action waivers. And again, AAA does not green light the inclusion of any of these clauses in agreements.

It’s general counsels that are putting these in the agreements and it’s only when the dispute arises that AAA is notified that that language was even included in the contract. So again, I don’t want to speak … I’m not an arbitration expert, so there’s a lot of complex law around all of this stuff. I understand there’s also a lot of abuses within class actions. I mean, I know at eBay we had so many frivolous class actions filed against us. I even was included with the class action settlement that was filed against eBay. They sent me a check for one penny because they actually owed me like 0.14 cents and they spent 44 cents for a stamp to send me a check for one penny. But the law firm that certified the class made $30 million. So there are abuses on the other side too, but I really think that online dispute resolution can provide a better path to justice for most consumers than the options that are available either through the mass claims class action process or in these pre-dispute binding arbitration clauses.

And I did a book for the ABA a few years ago with my friend, Professor Amy Schmitz, talking exactly about that.

Victor Li:

So what would like an automated online dispute resolution with AI? What would that look like if I were to go through it right now?

Colin Rule:

Well, as you say, Victor, the dust has been kicked up by these new innovations and I’m not sure it’s settled yet. So the first wave of AI, kind of break it into two waves. Well, there’s many more waves than that, but the first wave was kind of the chatbot era of AI and that’s what most people are still comfortable with, going to ChatGPT and asking it a question and it gives you an answer and that’s kind of the assistant area where the driver of dispute resolution is still the human neutral, the mediator or the arbitrator, or maybe in a negotiation, the parties themselves. So AI, the third party in that context, powered by AI, becomes an assistant and you can ask it questions. It could help summarize a bunch of documents if you have a very document intensive case, it can help you with intake, like you could drag a couple files into a box and it can analyze those files and say, “Okay, it seems like you have this kind of case and here’s how we proceed.” It can do tone monitoring where if the parties get into it and they start throwing threats and insults at each other, and AI can kind of say to somebody, “Hey, before you post this, the tones here seems pretty aggressive and the other side might not respond very well to this.

Here’s a redrafting of what you said that takes out some of the edge.” I mean, you can post what you originally wrote if you want to, but nine times out of 10, that little nudge will change the behavior of the party. So AI can do some of the things that human mediators had to do in the past in terms of reframing, helping people understand their BATNA and their WATNA, their best alternative to a negotiated agreement or their worst alternative. So there’s a lot of ways that AI can be an assistant in the dispute resolution process to increase the likelihood of success, especially as parties … I’m seeing parties come into mediations now with printouts from ChatGPT saying, “Well, ChatGPT said I should get $1,000.” It’s like, “Okay, well, let’s look at your prompt.” So I think that it’s already that AI is playing a role because almost everyone, and it’s amazing to see how quickly this cultural change has happened, but whenever somebody confronts something complicated or difficult in their lives, they pull out an AI and say, “Hey, what are my options here?” So I think that was kind of the first wave and I think we’re doing a pretty good job digesting that and figuring about how to pull that into our dispute resolution processes, negotiation, mediation, arbitration, ombuds, coaching to help our parties be at their best and get the best resolution they can, maximize the chance of successful agreement.

But now I think we’re talking about phase two. We say in Silicon Valley, the future is already here, it’s just not evenly distributed. So I may be living in this soup a little more than some people that are not in the cradle of technological innovation, but the agentic AI innovation is well underway and I feel like the Vanguard, a lot of people have heard of Claude Code where you can go into Claude Code and say, “Hey, go build me a complex website.” And it will do it. It will spin up multiple agents, it will segment tasks into chunks and assign it out to agents and bring it all back together. Other. So now Claude Code has made its way into Claude cowork and you can see people using this on their desktop, OpenAI and Gemini are both hard at work trying to emulate that. And we had the OpenClaw mult bot innovation where some guy just released open source software that essentially would take over your computer and respond to all your emails and just do everything for you.

So we are still in the middle of that Agentic revolution and Agentic is where you see individuals kind of seeding the action to AI agents. So we’re still kind of getting a sense of how that’s going to play out, but I could see in the future that disputants instead of going and negotiating directly with the other side, they can go to an agent and say, “Hey, I need to resolve this issue. Here’s all the information. Go get me a resolution.” And the agent will go off and make its own choices, maybe checking back with its sponsor, its client and saying, “Hey, I’m about to do this. Is that okay with you? ” Yep. Okay. And then it runs off and does it again. But that agent may go off and negotiate, maybe mediate, maybe even arbitrate and are they participating with a human on the other side or are they negotiating against another agent and are they making an argument in an arbitration in front of a human arbitrator or are the two agents representing the parties going to make their arguments in front of another agent, which would be from the arbitrator.

So I know a lot of this sounds kind of crazy like science fiction with all these AI robots running around, resolving our disputes, but you can already see on a nascent basis how this is playing out. And we had a website out here in Silicon Valley called Do NotPay and essentially if you get a parking ticket, you just give them the information and they’ll make the phone calls and try and get you a resolution and they come back and say, “Hey, I got you 80% of what you wanted. Is that good enough?” And you can say, “Yes, thumbs up, write it up.” Or, “Nope, not good enough. Keep fighting.” So I can see that that may be where things are headed a little bit as we seed our agency to these agents, but that one’s still kind of in the midst for me, how it’s all going to play out.

Well,

Victor Li:

It’s almost like then the agent becomes the lawyer represents someone.

Colin Rule:

In a sense, in a sense. But my friend Richard Suskind in the UK, who’s a big thinker on law in IT, he said, “Look, do we want to be the ambulance in the bottom of the cliff or do we want to be the railing at the top of the cliff?” And one of the challenges we have as dispute resolvers and lawyers and judges is that we’re reactive. It’s after this dispute arises that we’re invited in to help. But we’ve always known in dispute resolution, the most effective form of dispute resolution is early dispute resolution. At eBay, I would get millions of disputes over returns because people didn’t know what’s the return window, what’s the restocking fee? Who pays return shipping? There just wasn’t clarity. So there’s a lot of ways for disputes to arise. So I actually went upstream to the team at eBay that did the sell your item form and I said, “Look, we need to collect information about return policies at the point when the item is listed.” And we saw millions of those disputes go away because they had clarity.

So you knew what the rules were when you bought the item, you knew what the return policy was. So this is an opportunity for all of us to go upstream and say, “How can we use these tools to do dispute prevention?” AAA interestingly has launched this AI arbitrator, I mean, it’s an amazing technology. I don’t know if you’ve seen demos of it, but it’s incredible, but we actually have not had that many digital arbitrations where a digital arbitrator has decided the case. What we’re finding is the real interest is for parties to use the digital arbitrator before they have an arbitration and they go in and submit all their information and get an assessment of what their case is because once they have that assessment, they have an idea of essentially what the ZOPA for the agreement is, the zone of potential agreement and then they approach the other party and say, “Look, I put it through this and got this outcome.

How does this look to you? ” And the other party can say, “Yeah, that’s pretty good.” So what we may be doing with this technology is inventing something so powerful, so inexpensive, so convenient that we don’t even have to go through the litigation process. We don’t even have to go through the arbitration process because we can get this fair assessment that’s so high quality. I mean, an agent will write you a 25-page decision over a $100 dispute, which no human would ever do because it’s just too time consuming and complicated. So we might be seeing a fundamental shift in the way we resolve these disputes because the technology can engage with the case so much earlier, which means you don’t have to deal with all the escalation and the low intensity warfare of a grinding litigation or arbitration process, which nobody wants to get into.

It’s not in anyone’s interest. So as I say, the culture is changing in front of our eyes and right now I think there’s still kind of an ick factor of having algorithms come in and play these roles, but we’re seeing that change, Victor. And especially when you look at Gen Z and Gen A, they have no misgivings about an algorithm first approach to dispute resolution. So it may be that the technology’s ready, but the people are not, but the people catch up to the technology and I see that happening right in front of us.

Victor Li:

We’ll talk more about that after this next commercial breaks for a word from our sponsor. And we’re back. So we started talking a little about what we can expect in the near future and whatnot. So let’s talk about courtroom proceedings though. I mean, do you see this technology ever even being used by court, by actual courts in the litigation process, or do you think that might be a bridge too far, at least for the near future?

Colin Rule:

No, 100% of our focus at odor.com now is the courts. We’re working hard with the courts and we’re launching online dispute resolution services in courts across the United States. So what I believe, and again, when I first started working in the courts, when Tyler acquired Modria back in 2012, there were no court ODR programs in the United States. It was talk about it, but there were none. Now I think there’s about a hundred courts in the United States that have deployed ODR. Some of those are statewide, like unified systems. Some of those are just individual counties and there’s many different approaches. Obviously, Modria is a big court ODR platform. It’s used by many courts, but there was Matterhorn, which was another big one. There was RDO and Turbo Court eventually launched an ODR product and many courts are building their own technology now too, especially now that we have vibe coding.

It’s possible to build some pretty sophisticated systems and CIOs are getting smarter and smarter about this technology. The way that we built Modria, it integrates seamlessly into the court case management system. So if a case is e-filed in and there’s a little triage that’s done, is this the kind of case that can be resolved through an ODR process? Well, yes, then you can move it into essentially an online collaborative workspace where the parties can work together to try and get a resolution by mutual agreement, either through negotiation or mediation. And that’s a perfect place to integrate in AI to do a non-binding evaluation of the case as well to say, “Well, the AI has analyzed your case and it suggests based on other court cases that look like yours that a fair resolution would be this. ” And the parties don’t have to accept that.

If they both accept it by mutual agreement, fantastic, but they can easily say, “Nope, we want to go to a human hearing.” But as I say, watching the norms change, especially with a younger generation, I believe that our … I used to say our grandkids, but now I would say our kids are going to prefer that their case be heard by an algorithm as opposed to a human. The more we learn about implicit bias and all those sorts of things, weaknesses in the human justice system, more people may gravitate over time, kind of like how we’ve shifted from Lyft and Uber drivers to Waymo’s, because now we have data. We have millions of hours of Waymo driving that shows that it’s 80% safer than human drivers. So if we get that million cases resolved and we can see that the algorithmic resolution options do a better job dealing with bias, providing fairer outcomes, I think again, the cultural shift and people will want to use these algorithms.

So that’s down the road right now what we’re doing is we’re trying to use AI and ODR technology to streamline the process for litigants so they can come into a facilitated, as I say, collaborative workspace where they go through a workflow, there’s information that’s gathered, shared with the other side, and it maximizes the chance that they can work it out. So we think we’ve gotten 60 to 80% resolution rates of the civil cases we’ve tackled through ODR and the courts. And I think that number’s going to go up as the AI gets more sophisticated as well.

Victor Li:

Gotcha. And you talk about the younger generations and whatnot, but what about the crusty folks like myself who maybe-

Colin Rule:

Oh, you’re not that crusty Victor.

Victor Li:

Come on. Yeah, come on. There are days I feel it though, as I’m sure we all do, but yeah, I mean-

Colin Rule:

Don’t we all.

Victor Li:

Here’s an example. My wife says she’ll get into Waymo over her dead body. So how do you convince people like that to kind of buy into this technology?

Colin Rule:

Well, again, I think the technology moves fast and the people move slower, but to me there’s sort of a title inevitability to all of this. I remember the first time I explained eBay to a friend, they were like, so let me get this right. You send money to a stranger you’ve never met on the hope that they’re going to send you an item. Yeah,

Victor Li:

That is true.

Colin Rule:

That

Victor Li:

Is true. The first time I heard

Colin Rule:

That, I was like, yeah.

Victor Li:

Okay.

Colin Rule:

Yeah, that’s never going to work. And then I mean, I knew that the Airbnb guys, when they were just getting started, I helped them think through their dispute resolution stuff. And again, I had a friend who said, “So you go to a stranger’s house and you sleep in their guest room and you just presume that they’re not going to knock on your door or just come in uninvited at 3:00 AM.” I said, “Well, yeah, that’s kind of the vision.” But you know what? 99.99% of the transactions on eBay and Airbnb work out fine. And yes, there are disputes that arise, but most of the time it’s not bad actors. It’s misunderstandings or there’s just unfortunate events that occur and you got to work out those issues certainly. You can’t just say, “Well, I’m just going to sweep all the problems under the rug.” But I do think that as I say, when I first started doing ODR, I had a policy no family disputes.

I don’t do family disputes that’s in person, you have intimate partner violence, you have course of control. I just don’t want to do it. I’m going to deal with transactional cases like eBay stuff. But now that is the hottest area of ODR. We have weavorce.com, we have blissdivorce.com, we have hellodivorce.com, we have common sense divorce, and they all are using technology and now I’m doing it too. And my friend says to me, it’s so creepy that you help people get divorced online. I said, “Well, how do you think people find their spouses in the first place?” It’s all swiping right and swiping left and match.com. I mean, the world is changing the culture is changing and that’s the pace at which the humans get their heads around this stuff. Technology may make all this stuff possible today. We could build an agent-based court system tomorrow and the technology would all work, but nobody would use it because the people aren’t there yet.

But what you’re seeing is piece by piece, people are getting their heads around it. They’re starting to trust this technology, they’re starting to see the results, they’re starting to see the data and that’s why I think there’s a title inevitability to all of this just based on efficiency and access and cost inevitably, that’s why I say our kids are going to prefer an algorithm power justice system over a human power justice system. So what does it look like between here and there? Well, I can’t answer that question for you, but we’re all working to try and figure out how to civilize this tech and minimize some of the possible downsides because there’s a lot of downsides, right? You can have bad guys come in, build kangaroo courts and the parties have no way to know that they’re in a system where somebody is putting their thumb on the scale.

But that’s why we all have to work together at the ABA, at iCoder, at the National Center for Technology and Dispute Resolution. Let’s get the bad actors out, let’s do our audits, let’s create practice standards, let’s put in guardrails so that we can eventually build that system that we know is coming. And we can say, just like Waymo, “Hey, this is 80% better than what we had before and here’s the data to back that up.”

Victor Li:

And finally to wrap up, if our listeners out there want to ask you questions about this or get in touch with you, what’s the best way to do

Colin Rule:

That? Yep. Email [email protected]. Come to ODR.com, check it out. We’d love to show you a demo, but we’re also having a conference at Harvard in mid-June, ODR2026.org. And we have a conference at Harvard. We have a conference at Suffolk Law School the next day and then we have the vibeod.com hackathon where we’re going to be using Claude code to build the next generation of ODR. So if anybody is interested in this stuff and they want to get involved, come join us at Harvard or drop me an email and I’ll get you looped in.

Victor Li:

Great. Thanks again for joining us, Colin. I really appreciate it.

Colin Rule:

Thank you, Victor.

Victor Li:

If you enjoyed this podcast and would like to hear more, please go to your favorite app and check out some other titles from Legal Talk Network. In the meantime, I’m Victor Lee and I’ll see you next time on the ABA Journal, Legal Rebels Podcast.

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