Algorithmic Settlement Pressure In IP Arbitration: How AI-Driven Valuation Tools Reshape Power Dynamics In High-Stakes Commercial Disputes
- IJLLR Journal
- 44 minutes ago
- 1 min read
D.V.V. Tanay Raj, Associate, Intellect Juris Law Offices, Noida
Sanjana Kumari, Advocate, Independent Practitioner
Anushka Abhay Singh, Associate, Intellect Juris Law Offices, Noida
ABSTRACT
The evaluation of legal risk, valuation, and settlement outcomes has been significantly reshaped by the increasing application of artificial intelligence (AI) in intellectual property (IP) arbitration. AI-driven valuation tools are now widely employed to quantify damages, predict the likelihood of infringement, and estimate royalty rates, thereby influencing negotiation dynamics in high-stakes commercial disputes. While existing scholarship highlights the efficiency and cost-reducing potential of such technologies, limited attention has been paid to their impact on settlement behaviour and bargaining power within arbitral proceedings.
In order to close this gap, this paper introduces the idea of Algorithmic Settlement Pressure, which is defined as the subtle but coercive influence that AI-generated risk and valuation outputs exert, forcing structurally weaker parties like start-ups, MSMEs, and individual innovators to settle disputes despite their debatable legal merits. It contends that AI valuation methods may unintentionally reinforce current power disparities in IP arbitration by transforming legal ambiguity into ostensibly objective probabilistic evaluations.
The study investigates how algorithmic risk framing, opacity, and information asymmetry alter consent and fairness in private dispute resolution using a socio-legal investigation of AI-assisted valuation procedures. In order to maintain procedural justice and party autonomy in IP arbitration, it ends by suggesting specific safeguards to guarantee that AI serves as a decision-support mechanism rather than a determinant of settlement outcomes.
Keywords: Intellectual Property; AI Valuation; Settlement Pressure; Automation Bias; Arbitration Ethics; Power Asymmetry.
