Chapter 1: What is the main topic discussed in this episode?
Hello and welcome to Decoder. I'm Neil I. Patel, Editor-in-Chief at The Verge, and Decoder is my show about big ideas and other problems. Today, we're going to talk about the role AI might play in deciding legal disputes, not just doing research and drafting memos, actually deciding who's right and who's wrong and who should pay.
My guest today is Bridget McCormack, the former Chief Justice of the Michigan Supreme Court and now the President and CEO of the American Arbitration Association. You've probably heard of arbitration before. It's a form of dispute resolution that allows two parties to resolve conflicts outside of the formal court system using a third neutral party, the arbitrator, to negotiate a settlement.
You may have never found yourself in arbitration, but you've almost certainly signed an arbitration clause in one of the many contracts and terms of service agreements that all of us have to sign all the time. Arbitration can be much faster, cheaper, and easier than going to court, so it's become a favored way of resolving disputes between businesses.
Chapter 2: What role does AI play in arbitration?
It's also, as it turns out, how many employers and large corporations defend against lawsuits, because they can sneak an arbitration clause into the agreements for everything from cell phone service to smart washing machine features, or even the signing of your employment contract, which can protect them down the line from class action claims.
Arbitration is everywhere in our legal landscape, and you can see why an organization like the AAA would want to make it faster, cheaper, and more predictable. So for the past several years, Bridget and her team have been developing an AI-assisted arbitration platform they call the AI Arbitrator. And the AI Arbitrator is now available for use in very specific cases.
Construction disputes that can be resolved entirely on the basis of written documents. And as of right now, the AI Arbitrator officially has one case on its docket.
Now, I'm obviously fascinated at how all of this might work, but you'll hear Bridget and I really dig in on what this kind of automation means, not just for arbitration, but also the bigger, more fundamental idea of seeking justice and whether or not our legal system feels fair. Americans' trust in the judicial system reached a record low in 2024.
And you'll hear Bridget and I go back and forth on whether a system driven by AI can actually help people trust these kinds of systems more by making each party simply feel heard and by showing its work, something you don't often get from a human judge. At the same time, AI systems are AI systems. They're new. They're brittle. They hallucinate. They get facts and dates wrong.
And it feels like there's a real danger in handing this kind of power over to new and unpredictable technology. So you'll hear Bridget and I discuss where she thinks the lines should be drawn and how she's trying to head off some of the big concerns about AI and where she sees this all going in the future. Again, Bridget was the former Chief Justice of the Michigan Supreme Court.
She was in charge of all the judges in that state. And you'll hear her say several times that people are pretty unreliable themselves.
One note before we start, if you want a broader look at how AI and the legal system are interacting, Verge reporter Lauren Finer actually published a fantastic feature on all this last month, and I highly suggest you go read it if you're interested in learning even more. We'll put a link in the description and in the show notes.
Okay, Bridget McCormack, the president and CEO of the American Arbitration Association and the AI arbitrator. Here we go. Bridget McCormack, you're the president and CEO of the American Arbitration Association. You're also the former chief justice of the Michigan Supreme Court. Welcome to Decoder.
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Chapter 3: How does the AI Arbitrator function?
They're legally naked. And so arbitration is an easier way for them to manage disputes.
It sounds like as the chief justice, you had a role like advocating for the court system with the legislature, inside the justice system. Most people never hear about that, never think about that. What was the split in your time? How often did you have to spend time just saying, hey, can you pay for the courts versus actually being the chief justice?
I would say the administrative part of the job was – significantly more than half than the decisional part of the job. It's an enormous job. Yeah. I mean, Michigan adjudicates between three and four million cases a year. And like every other state court, a majority of people who go to court to have cases resolved can't afford lawyers.
This is the primary place people interact with their government. So the kind of justice we deliver, the quality of justice we deliver is... It's pretty important to, frankly, like the rule of law and, you know, trust in institutions. And so I think it's, you know, one of the most important jobs in government.
I'm curious about that because it feels like the experience you had there really leads to your perspective on how and why AI should enter the legal system. Yep. The reason I'm starting here with your previous experience and not your current job is I encounter this on our show and on our site all the time that people think the legal system is deterministically.
Like particularly our audience, the tech audience, thinks the legal system is a computer, right? You can feed it inputs and it'll API access the law and then you'll get some predictable outputs.
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Chapter 4: What are the pros and cons of using AI in the legal system?
And I'm always trying to convince people that that's not the case. And just even hearing you talk about the politics of running the legal system underlines for me that the legal system is absolutely not deterministic. Should it be? Because you're the first person I could just like straightforwardly ask that question to. Should the legal system be more predictable and deterministic?
So it absolutely should be, at least in a majority of cases. In fact, if it were more deterministic, we would have fewer disputes. Right. It's because it's probabilistic. And I agree with you. It for the most part is because it's run by humans. Right. who are, you've met humans, right? They're flawed. It therefore isn't always predictable.
Chapter 5: How can AI improve trust in the judicial system?
If it were more predictable, we would be a more efficient and effective system. We'd avoid a lot of disputes because people could plan their business around what in fact the rule was going to be and how it was going to be enforced and how they could count on it being enforced.
That's true for, in my view, you know, most cases for which there is a rule of law and we know, you know, how it's been interpreted historically or at least how it's been correctly interpreted historically by a majority of courts. There are always going to be new frontiers in legal. So, you know, cases where courts are having to decide how to interpret a new statute.
Courts are going to have to figure that out for the first time. That's not going to be able to be deterministic. could get better and better, frankly. I think AI could do a very good job at the front end of statutory drafting in making sure there was less ambiguity in statutory terms, I think. So I think AI could impact that.
But there are even still modern questions about historic provisions in statutes and constitutions, state and federal, that We have entrusted judges to decide. So I don't think it can all be deterministic. I think an awful lot could be, and it would improve the way the law operates.
Where do you think the sort of source of uncertainty in the legal system as people experience it today comes from? Is it just that most people can't afford a lawyer? Is it that some percentage of judges are just weird old guys? Where does that come from?
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Chapter 6: What are the limitations of AI in legal disputes?
I don't think there's a single answer. I do think the fact that 92% of Americans can't afford help with their legal problems, and that's not just the kinds of cases individuals end up going to court for. It's also true for all small and medium businesses, for the most part, can't afford lawyers. So there's an awful lot of trying to navigate legal risk and legal problems without lawyers.
And that's complicated. That's actually, frankly, very complicated for judges. Judges who are managing large dockets with many parties without lawyers try and do their best to work their way through those documents. those problems, but it's not easy. But I do think the fact that, you know, we have a legal system run by humans and humans are imperfect and busy.
I want to be very careful, very clear that there's a big difference between state and federal court, right? 95%, 96% of cases are heard in state courts, not federal courts. I mean, the federal courts do a very, very small, a much smaller number of cases and generally have larger staff to help them. State courts are managing most disputes with fewer resources and doing the best they can.
But if you look at the rate of reversals by appellate courts, by intermediate appellate courts and state Supreme Courts, they're getting a lot wrong, right? So, you know, humans get things wrong for lots of reasons. Yeah.
Yeah.
That rate of reversal, just to unpack that, what you mean is someone goes to court, a state court judge decides there's an appeal, which costs money, and that goes up to an appeals court, and the appeals court is overturning that judge. And you're saying that rate's going up or that rate is too high.
I don't know if it's going up. I could probably figure that out, but I don't know that off the top of my head. It is the fact that it's quite high.
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Chapter 7: How does the AI system ensure fairness in arbitration?
The number of cases where an appellate court reverses the work of a lower court is not a low number. It's going to be different from state to state and different in the federal appellate courts, but you can benchmark it and it's not an insignificant number. I like to use the example of, I ran a non-DNA innocence clinic like two careers ago.
We know a lot about the rate of wrongful conviction as a result of the DNA exonerations over the last, I don't know, 30 years at this point, because there's a database now and we've been able to learn both like the rate at which mistakes are made. Sometimes they're made by juries, but often they're made by judges. and the kinds and qualities of the errors that lead to those mistakes.
And it's sort of a shocking number. Like the wrongful convictions tell us that in three to 5% of cases, there was an error made. And you might think, oh, that's, you know, kind of a low number. And, you know, if you're shooting free throws and probably it is a low number, but if you're landing planes, not a great number, right?
And I think the, you know, the criminal justice system should be more like landing planes.
The reason I'm starting here is, I think you perceive this as well as I do, the lack of faith and trust in our institutions is kind of pervasive across American society. And the legal system is just part of it now, right?
Like, especially if you show up and you don't have a lawyer, you don't have the money, and then it is a weird old guy and a judge, and then you're looking at the statistics and they're probably wrong, but you can't afford to appeal, or you're just reading the headlines every day. It just feels like there's more chaos in the formal legal system than ever.
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Chapter 8: What types of disputes are suitable for AI arbitration?
And I wanted to start there because I do feel like the lack of faith in our corporate institutions is equally high. And most people's experience with arbitration is, well, I just need cell phone service. I'm not going to read this contract or these 15 contracts to get my cell phone service. And there's a line here that says, well, I can't even sue AT&T if they get something wrong.
I'm going to end up in arbitration. And that arbitration is... Like, of course, it's just going to be against me. Like, there's nothing I can do. I'm just signing away my rights. How do you feel about that in this context? Because that feels like as big of a problem as anything.
Yeah. So let me unpack a couple of things you said. I completely agree that the declining trust institutions is the courts are part of that problem. And in fact, the National Center for State Courts kind of tracks that. And I think their data shows declining trust in the courts. Frankly, that declining trust is faster in the federal courts than the state courts.
But but even the state courts are struggling with that. I happen to believe that the way most Americans are locked out of our formal justice system is as important to that declining trust as any other factor, and there are other factors. Imagine like any other public good, you know, imagine if we said, if you want to drive on the highway, you can do that, but you have to hire a driver.
Or, oh, you want to register your kid for public school? No problem. It's a public good, but... You're going to have to hire a special person who will go, you know, sign you up for public school because otherwise it's in Latin and you can't understand it. Like we would never accept that.
But we accept that most Americans are locked out of their formal justice system because they I don't know why, because we set up a legal system 250 years ago and the legal profession is better than any other at avoiding any disruption. Yeah.
But to the second part of your question, I do think that there has been a narrative that if your consumer contract, whether you bought an appliance or a cell phone or sometimes employment contracts, designate arbitration as the forum for resolving disputes, that that must mean this is not going to go well for you.
In fact, the data that we have is that people are far more likely to actually get a hearing and get some award when they navigate an arbitration process than when they navigate a court process. And the reason for that probably is obvious. If you have to navigate a court process but you can't figure it out, that's really complicated.
In an arbitration, we can make resources available to parties who are representing themselves and do everything remotely and make it easier for people to actually navigate it. So cases are far more likely to actually go to a hearing and parties are heard in arbitration than than they are in courts. But that perception definitely is out there.
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