JAMS Introduces Updated Arbitration Guidelines to Address Disputes Involving Artificial Intelligence

On April 23, 2024, JAMS, a prominent provider of alternative dispute resolution (ADR) services, introduced its newly established Rules Governing Disputes Involving Artificial Intelligence Systems (referred to hereafter as the “Rules”). This marks a pioneering effort within the ADR field, as JAMS becomes the first institution to develop tailored guidelines specifically addressing conflicts arising from Artificial Intelligence (AI) technologies. These Rules are expected to garner significant attention from enterprises engaged in the development of advanced AI systems, as they incorporate critical protections designed to prevent the misuse of arbitration procedures for the extraction of trade secrets or other sensitive information from opposing parties.

A key innovation within the Rules, as compared to JAMS’s pre-existing arbitration framework, is the introduction of a standard protocol for managing the confidentiality and examination of AI systems implicated in disputes. Under the Rules, “AI systems and related materials”- encompassing AI hardware, software, models, and training date- are not to be disclosed directly to the opposing party. Instead, such materials would be made available exclusively to one or more experts, who are either jointly agreed upon by the disputing parties or appointed by the Arbitrator or Tribunal. Additionally, the Rules include a default protective order that enables parties to restrict access to sensitive commercial or trade information, limiting it to the legal representatives of the opposing party under an “attorneys-eyes only” provision.
These rules apply when parties expressly agree to their use in governing disputes between them. To facilitate their adoption, JAMS has also provided a model dispute resolution clause, which parties may incorporate into their contractual agreements if they wish to utilize the Rules. Even if parties opt for the arbitration rules of a different ADR institution, they retain the option to incorporate a similar confidentiality framework into their agreements or negotiate it as part of the arbitration process.

It is important to note that Rules are specifically designed for disputes where the central issue pertains to an AI system. They do not extend to the broader application of AI within the dispute resolution process itself. Presently, AI tools are offering unprecedented support to legal professionals and arbitrators in case management and decision-making. However, the use of such tools in arbitration remains largely unregulated, although certain ADR entities, such as Silicon Valley Arbitration and Mediation Center, have begun to establish guidelines to ensure that AI usage does not compromise the integrity or efficiency of the arbitration process.

Authors: Surya Gopalan & Preeti Bhagnani
Source: White & Case Tech Newsflash
Edited by: Sevinch Farmonova

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