AUTHOR: – ANSHIKA KUMARI, a student of SHRI RAMSWROOP MEMORIAL UNIVERSITY
TO THE POINT
Uses: Legal research, contract review, case prediction, dispute resolution.
• Benefits: Faster, cheaper, more accurate legal services.
• Risks: Fake citations, data privacy, bias, lack of regulation.
• 2025 Updates: Courts sanction AI misuse; ethical guidelines under development.
USE OF LEGAL JARGON
Applications: AI is utilised in legal drafting, due diligence, predictive adjudication, and contract vetting.
• Dispute Resolution: AI facilitates alternative dispute resolution (ADR) through e-arbitration and ODR mechanisms.
• Merits: Enhances judicial efficiency, reduces litigation backlog, and promotes access to justice.
• Demerits: Prone to hallucinated citations, raises concerns over data confidentiality, algorithmic bias, and procedural fairness.
• Recent Jurisprudence (2025): Courts have imposed sanctions on advocates for submitting AI-generated pleadings containing non-existent precedents; regulators urge statutory oversight of legal AI tools.
ABSTRACT
The integration of Artificial Intelligence (AI) into legal practice and dispute resolution mechanisms marks a paradigm shift in the administration of justice. AI-powered tools are increasingly employed for legal research, predictive analytics, contract review, and client advisory services, thereby enhancing procedural efficiency and minimizing human error. In the realm of dispute resolution, AI is facilitating the growth of Online Dispute Resolution (ODR) and algorithm-assisted arbitration, offering expedited and cost-effective alternatives to conventional litigation.
However, this technological advancement also raises significant jurisprudential and ethical concerns. Issues such as algorithmic bias, data privacy breaches, lack of regulatory oversight, and AI hallucinations (fabricated citations) threaten the integrity of legal proceedings. Recent judicial pronouncements and statutory developments in jurisdictions like the United States, India, and the European Union underscore the urgent need for a codified framework to regulate the deployment of AI in legal processes.
This paper examines the scope, benefits, and challenges of AI in legal services and dispute resolution, while advocating for the formulation of robust legal standards to ensure transparency, accountability, and procedural fairness.
The growing integration of Artificial Intelligence (AI) into the legal domain is redefining the structure, delivery, and accessibility of legal services. AI-powered tools are now widely used for legal research, contract review, due diligence, case outcome prediction, and client interaction—ushering in a new era of data-driven and technology-enhanced legal practice. In dispute resolution, AI is facilitating the rise of Online Dispute Resolution (ODR) and e-arbitration mechanisms, offering speedier, cost-effective, and accessible alternatives to traditional litigation.
Despite these advancements, the use of AI raises several legal, ethical, and procedural concerns. Issues such as algorithmic bias, lack of transparency, data security risks, and the growing phenomenon of “AI hallucinations”—where tools like ChatGPT generate fake case citations—pose serious threats to the credibility and integrity of legal proceedings. Courts, particularly in the United States, have already imposed sanctions on legal professionals who submitted AI-generated filings without verification.
In response, several jurisdictions and institutions have begun formulating regulatory frameworks. The European Union’s AI Act (2025) categorizes legal AI tools as “high-risk” and mandates strict oversight. The Bar Council of India and various U.S. courts have issued warnings and ethical guidelines against unregulated AI use in legal practice.
This paper critically examines the dual role of AI as both a facilitator and a disruptor in the legal system. It advocates for a calibrated approach—one that balances technological innovation with robust ethical standards, statutory safeguards, and human oversight. Only through such a framework can AI be responsibly harnessed to support the ideals of justice, fairness, and due process in the legal ecosystem.
CASE LAWS
1. Mata v. Avianca, Inc., 2023 (U.S. District Court – SDNY)
Citation: Mata v. Avianca, Inc., No. 22-cv-1461 (PKC), 2023
Facts:
An attorney submitted a brief with fake case citations generated by ChatGPT.
Held:
The court-imposed sanctions on the lawyer for failing to verify the authenticity of AI-generated legal authorities.
Importance:
First landmark ruling warning against unverified use of AI in legal pleadings. Set precedent for professional negligence when relying blindly on AI.
2. Free Speech Coalition v. Paxton, 2025 (U.S. Supreme Court)
Citation: Free Speech Coalition v. Paxton, 603 U.S. ___ (2025)
Facts:
Challenged a Texas law requiring age verification for adult websites, which used AI to screen users.
Held:
The law was upheld under intermediate scrutiny. The court recognized the valid use of AI tools for public interest but emphasized constitutional safeguards.
Importance:
Addresses the intersection of AI and constitutional rights (speech, privacy).
3. State of Tamil Nadu v. Governor of Tamil Nadu, 2025 (India – Supreme Court)
Citation: (2025) SCC On-line SC ___
Facts:
Concerned the Governor delaying assent to bills passed by the state legislature.
Held:
The Supreme Court held that constitutional functionaries (including AI-assisted decision tools) must act within a reasonable time, reinforcing procedural fairness.
Importance:
Though not about AI directly, it reinforces timely decision-making, a principal AI-based systems must uphold.
CONCLUSION
The advent of Artificial Intelligence in legal practice and dispute resolution represents a transformative leap toward enhancing efficiency, reducing procedural delays, and expanding access to justice. While AI tools streamline legal research, drafting, and adjudication, their unregulated use raises serious concerns about professional ethics, data privacy, and the risk of algorithmic bias.
Recent case laws and regulatory developments underscore the necessity for a robust legal framework to govern the deployment of AI in the legal domain. Ensuring human oversight, transparency, and accountability is crucial to maintaining the integrity of legal proceedings.
Thus, while AI holds immense potential to complement the legal system, its application must be approached with caution, guided by statutory safeguards and ethical standards to preserve the foundational principles of justice and fairness.
Artificial Intelligence has emerged as a transformative force in the legal landscape, offering unprecedented improvements in speed, accuracy, and efficiency across various domains such as legal research, contract analysis, litigation strategy, and dispute resolution. Its integration into Online Dispute Resolution (ODR) platforms and predictive legal tools demonstrates AI’s growing role in facilitating access to justice and reducing the burden on overburdened judicial systems.
However, the adoption of AI in legal practice is not without complications. The risks associated with algorithmic bias, data privacy breaches, lack of explainability, and the increasing reliance on unverified AI outputs—such as fabricated case law—underscore the urgent need for ethical and regulatory safeguards. The misuse of AI in court filings, as highlighted in landmark cases like Mata v. Avianca, Inc., reflects the potential harm to the integrity of legal proceedings if AI tools are applied irresponsibly.
As legal systems across jurisdictions grapple with these challenges, the importance of human oversight, legal accountability, and robust policy frameworks cannot be overstated. Initiatives like the EU AI Act, judicial guidelines in the U.S., and regulatory advisories in India mark important steps toward ensuring that AI serves as a tool for justice, rather than a threat to it.
In conclusion, AI should be viewed not as a replacement for legal professionals but as a powerful assistive technology. Its responsible and ethical use—guided by statutory regulation, professional diligence, and judicial awareness—can strengthen the legal system while preserving the foundational principles of fairness, impartiality, and rule of law.
FAQ
1. What is the role of AI in legal practice?
AI is used for legal research, contract analysis, due diligence, case prediction, and automating repetitive tasks like drafting and client communication.
2. Can AI replace lawyers or judges?
No. AI can assist but cannot replace legal reasoning, ethical judgment, or courtroom advocacy. Human oversight remains essential.
3. What are the benefits of AI in dispute resolution?
AI enables faster settlements, reduces backlog through Online Dispute Resolution (ODR) platforms, and assists in e-arbitration processes.
4. What are the legal risks of using AI in law?
• Hallucinated citations (fake case laws)
• Breach of client confidentiality
• Bias in algorithms
• Lack of legal accountability
5. Are there any laws regulating AI use in legal services?
Yes. For example:
• EU AI Act (2025) regulates AI in high-risk areas like law.
• Indian courts and bar councils have issued guidelines discouraging unverified AI use.
• U.S. courts have penalized lawyers for submitting AI-generated fake citations.
6. Has any court ruled on AI misuse in legal filings?
Yes. In Mata v. Avianca, Inc. (2023, U.S.), a lawyer was sanctioned for filing a brief with fake cases created by ChatGPT.
7. What safeguards should law firms adopt when using AI?
• Human verification of AI outputs
• Confidentiality and data protection protocols
• Compliance with bar association rules
• Use of explainable and auditable AI systems
8. Is AI legally recognized in ADR (Alternate Dispute Resolution)?
Yes, many ODR platforms legally operate worldwide. AI is increasingly used to facilitate negotiation and mediation, though decisions must still comply with legal norms and fairnes
