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JAMS Introduces New Rules for AI Disputes: A Step Towards Future Arbitration
JAMS Introduces New Rules for AI Disputes: A Step Towards Future Arbitration
Introduction:
On April 23, 2024, JAMS announced the implementation of its Artificial Intelligence Disputes Clause and Rules (JAMS AI Rules), effective from April 15, 2024. These rules are designed to address the unique challenges presented by the increasing use of AI systems and smart contracts in various industries. With AI becoming a critical topic in arbitration, JAMS has taken a pioneering step to ensure that AI-related disputes are managed effectively and transparently.
The Growing Need for AI Arbitration Rules:
AI's rapid growth across industries has led to a rise in disputes related to its use. Recent legal actions, such as the class action lawsuit against Google for using copyrighted images to train its AI system "Imagen," highlight the need for specialized rules in arbitration. Recognizing this, JAMS has developed the AI Rules to provide clear guidelines and procedures tailored to the complexities of AI, including issues of liability, algorithmic transparency, and ethical considerations.
Key Provisions of the JAMS AI Rules:
Definition of Artificial Intelligence
The JAMS AI Rules define AI broadly as "a machine-based system capable of completing tasks that would otherwise require cognition" (Rule 1(e)). This expansive definition could encompass a wide range of machine-based systems, potentially leading to an extensive application of the rules. For instance, it could be argued that even basic computer systems fall under this definition, affecting how parties manage the disclosure and inspection of AI-related materials.
Production and Inspection of AI Systems
The rules introduce a novel approach for handling the production and inspection of AI systems and related materials (Rule 16.1(b)). Parties are required to make these systems available to experts in a secure environment, limiting direct access to sensitive information. This provision aims to protect trade secrets and confidential data but may lead to procedural disputes over what constitutes "related materials."
Expert Evidence on AI Systems
Rule 16.1(b) also mandates that experts providing opinions on AI systems must be mutually agreed upon by the parties or designated by the tribunal. This could complicate the arbitration process, as mutual agreement with experts might be challenging. The restriction on party-appointed experts could hinder the ability to present comprehensive technical evidence, potentially impacting the understanding and resolution of AI-related issues.
Mandatory Expedited Procedures
Unlike the optional expedited procedures in the JAMS Comprehensive Rules, the JAMS AI Rules make these procedures mandatory (Rule 16.1). This includes limited discovery depositions, expedited resolution of discovery disputes, and strict timelines for hearings. While these measures aim to streamline the arbitration process, they may also restrict parties' ability to thoroughly present their cases in complex AI disputes.
Increased Confidentiality Safeguards
The JAMS AI Rules emphasize protecting confidential information, incorporating a protective order in Appendix A (Rule 16.1(a)). This order allows parties to designate documents as "Confidential" or "Highly Confidential," ensuring sensitive data is safeguarded throughout the arbitration process. Additionally, Rule 26(b) mandates strict confidentiality for all arbitration details, enhancing the protection of proprietary information.
Conclusion:
The introduction of the JAMS AI Rules marks a significant advancement in preparing for AI-related disputes in arbitration. While the rules offer enhanced confidentiality and streamlined procedures, their broad definition of AI and restrictions on expert evidence may pose challenges. As AI continues to evolve, it is crucial for parties to carefully consider incorporating these rules into their agreements, balancing the need for confidentiality with the ability to fully present their cases. This proactive approach by JAMS underscores the institution's commitment to staying ahead of emerging trends in alternative dispute resolution.
- The JAMS AI Rules define AI broadly as "a machine-based system capable of completing tasks that would otherwise require cognition".
- Parties are required to make these systems available to experts in a secure environment, limiting direct access to sensitive information.
- This provision aims to protect trade secrets and confidential data but may lead to procedural disputes over what constitutes
