JAMS unveils new arbitration rules for artificial intelligence disputes
On April 23, 2024, JAMS, a leading alternative dispute resolution (ADR) services provider, released its new Rules Governing Disputes Involving Artificial Intelligence Systems (the “Rules”). This is the first time an ADR provider has developed specific rules for disputes concerning Artificial Intelligence (AI) technologies. The Rules are of interest to companies developing cutting-edge AI systems because they provide useful safeguards to prevent parties from using the exchange of information in arbitration to obtain trade secrets or other sensitive information from their counterparties.
The major adaptation of the Rules from JAMS’s existing arbitration rules is the default procedure to address the confidentiality and inspection of AI systems at issue in a dispute. Under the Rules, “AI systems and related material”—which includes not only AI hardware and software but also AI models and training data—would be made available not to the other party in any dispute but only to one or more experts mutually agreed upon by the parties or otherwise designated by the Arbitrator or Tribunal. The Rules also contain a default protective order that allows parties to limit access to sensitive trade or commercial information to another party’s attorneys (i.e., an “attorneys-eyes only” arrangement).
The Rules will apply where parties specifically agree to have the Rules apply to disputes between them. Alongside the Rules, JAMS also released a model dispute resolution clause that parties seeking to use the Rules can incorporate into their contracts. It remains open to parties choosing to have the rules of another ADR institution apply to disputes between them to agree upon a similar confidentiality framework set out in the Rules in their contracts, or as and when the procedural framework for any arbitration is negotiated.
The Rules are adapted for disputes where the subject of the dispute is an AI system. They do not address the use of AI generally in the dispute resolution process. AI tools today provide unprecedented assistance to counsel and arbitrators in prosecuting and deciding cases. In the arbitration context, the use of those tools remains largely unregulated for the time being, although certain ADR organizations (for example the Silicon Valley Arbitration and Mediation Center) have made strides to develop guidelines on how parties, counsel, and arbitrators should navigate AI without compromising the fairness or efficiency of arbitration.
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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.
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