AI-Powered Arbitration – Updating Our Terms of Service

One of the best things about this job is the proximity to other people who are thinking critically about how to change the worst parts of the legal industry.

Usually, this enjoyment is academic. Today, it’s also professional.

A few months ago, we got hit with a demand letter from a cookie troll. Without getting too far into the weeds, there are two things worth knowing: (1) we had an industry-standard cookie consent manager in place, and (2) the troll in question does not appear to have held a real job since pleading guilty to and serving time for wire fraud and mail fraud, arising from an “I thought I found a loophole and Amazon would never notice my order-and-return-for-refund scheme” eight years ago.

I raise these two points because, perhaps idealistically, I think the law exists as a general force for good in society. Cookie laws are no exception: they protect real privacy interests. The problem is procedural. When the process around a law evolves such that it is used primarily as a weapon by bad actors — those who acknowledge no actual damages, but know a nominal payout is less friction for us than arbitration (and easier for them than finding a desk job) — then either the law or the process around it needs to change. (Or both!)

In this case, for now, we’re going with a process solution: today we updated our Terms of Service to provide that, for small-dollar claims arising out of our website, either party can elect arbitration via DecisionLayer. DecisionLayer is an AI-powered arbitration service that resolves disputes faster and more affordably, lowering the barrier to having claims heard. When a dispute arises, an AI arbitrator reviews the case and drafts an award, and a human arbitrator gives final review before it issues. Claims are resolved, they say, 30x cheaper and 10x faster than in standard dispute resolution processes.

A few points about how we approached this. The provision is mutual: either side can elect it. It is limited to small-dollar claims, where the cost of the forum most distorts the outcome. And it is meant to be fair as well as efficient: a faster, cheaper process that still ends with a human arbitrator’s review. Our hope is that a forum this accessible changes the settlement math for both sides: a meritorious claimant no longer needs to be bought off to avoid an expensive process, and a defendant no longer needs to pay a nuisance premium simply because defending is costlier than settling.

The cost of litigation shouldn’t be a deterrent to bringing a meritorious claim — but neither should the cost of litigation (or arbitration) be a deterrent to defending one.

To be clear, this is a change to our website terms only. Nothing changes for existing clients under their engagement letters, and nothing changes about how we work with them. But for the next Abmahnanwalt, we’ll see you in (virtual) arbitration.