{"id":906302,"date":"2026-10-29T16:05:03","date_gmt":"2026-10-29T22:05:03","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=906302"},"modified":"2026-10-29T16:05:06","modified_gmt":"2026-10-29T22:05:06","slug":"arbitration-clauses-are-being-adapted-for-ai-related-disputes","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-clauses-are-being-adapted-for-ai-related-disputes\/","title":{"rendered":"How Arbitration Clauses Are Being Adapted for AI-Related Disputes"},"content":{"rendered":"\n

Andres Munoz | Practising Law Institute<\/a><\/p>\n\n\n\n

Artificial intelligence<\/a> is changing more than how businesses operate. It is also changing the disputes they have and the contracts designed to resolve them.<\/p>\n\n\n\n

A traditional arbitration clause may state that disputes arising from an agreement will be submitted to arbitration, identify the governing rules and select a location. That framework may still work for many commercial disputes. But when AI is involved, businesses can face questions that conventional arbitration language was never written to address.<\/p>\n\n\n\n

The challenge runs in both directions. An AI-related arbitration clause must not only establish how disputes involving an AI system will be resolved, it may also need to address the role AI can play in the dispute-resolution process itself. In other words, the clause must account for both disputes about AI and the use of AI in resolving those disputes.<\/p>\n\n\n\n

Each objective generates drafting decisions that boilerplate does not reach. What confidentiality protections apply when the evidence is source code or training data? On what terms, if any, may an opposing party or its expert inspect the system itself? What technical qualifications should the arbitrator have? Additionally, may counsel, experts, or the arbitrator use generative AI during the proceeding\u2014and must they disclose if they do?<\/p>\n\n\n\n

These are drafting questions, not merely procedural ones that surface after a dispute begins, and they are pushing arbitration clauses beyond boilerplate.<\/p>\n\n\n\n

AI Disputes Present Different Problems<\/strong><\/p>\n\n\n\n

Consider a company that licenses an AI-powered recruiting platform. The customer later claims the software systematically rejected qualified applicants. The developer responds that the customer configured the system incorrectly.<\/p>\n\n\n\n

Resolving that dispute could require more than reviewing the parties\u2019 contract. The parties may need access to system logs, model documentation, prompts, outputs, training information or testing records. Some of that material could contain trade secrets or sensitive data.<\/p>\n\n\n\n

Or imagine a company relying on an AI vendor to generate financial forecasts. The system produces inaccurate information, and the company claims it relied on those outputs when making a multimillion-dollar business decision. The parties may disagree about whether the problem resulted from the model, the underlying data, the user\u2019s instructions or the way the system was implemented.<\/p>\n\n\n\n

Neither dispute is exceptional as a matter of contract law. What makes each one challenging is that the proof lives inside a proprietary system, and a standard clause says nothing about how that system will be examined, by whom, or under what protections. Those terms are much easier to negotiate before a dispute exists than after one.<\/p>\n\n\n\n

Arbitration Providers Have Moved First<\/strong><\/p>\n\n\n\n

Arbitration providers have started responding.<\/p>\n\n\n\n

JAMS issued its Artificial Intelligence Dispute Rules, effective June 14, 2024, along with a model clause that parties can incorporate by reference. The rules are notable less for what they add than for the defaults they set. Rule 16.1 limits document requests to material directly relevant to the dispute and reasonably restricted by time frame, subject matter, and the persons or entities to which they pertain, and it provides that production and inspection of AI systems and related materials be limited to one or more experts working in a secured environment established by the disclosing party. Appendix A of these Rules provides a form AI Disputes Protective Order, and Rule 15 draws arbitrators from a pool JAMS has approved for technically complex subject matter.<\/p>\n\n\n\n

The American Arbitration Association has gone further by integrating AI into the arbitration process itself. Its AI-led arbitration framework uses AI to organize submissions, analyze issues and assist with draft awards, while a human arbitrator retains responsibility for reviewing the matter and issuing the final award. Participation is voluntary.<\/p>\n\n\n\n

Separately, the AAA-ICDR published Guidance on Arbitrators\u2019 Use of AI Tools, directing arbitrators to verify AI outputs against original sources, keep confidential material out of unsecured platforms, retain independent decision-making authority, and disclose AI use that materially effects the process or reasoning.<\/p>\n\n\n\n

These developments track the two jobs a modern clause has to do. The sections that follow address them in turn.<\/p>\n\n\n\n

Part One: Drafting for Disputes About AI<\/strong><\/p>\n\n\n\n

Protecting Confidential AI Information<\/strong><\/p>\n\n\n\n

Confidentiality may become one of the most important drafting considerations.<\/p>\n\n\n\n

AI disputes can involve source code, proprietary algorithms, system architecture, prompts, training data and internal testing. Producing that information without adequate safeguards could expose some of a company\u2019s most valuable intellectual property.<\/p>\n\n\n\n

An arbitration provision can therefore work together with confidentiality and protective-order language. Parties may establish procedures limiting who can review particularly sensitive information, whether technical material can be accessed only by outside counsel or experts and how confidential information must be stored or destroyed after the proceeding. The AI Disputes Protective Order at Appendix A to the Jams rules is a workable starting point even in an arbitration seated elsewhere.<\/p>\n\n\n\n

Technical Discovery: Who Gets to Examine the Model?<\/strong><\/p>\n\n\n\n

Discovery presents another challenge.<\/p>\n\n\n\n

A party challenging an AI-generated result may argue that it cannot evaluate the decision without understanding how the system operates. The developer may counter that broad disclosure would expose proprietary technology.<\/p>\n\n\n\n

Instead of leaving that conflict entirely for the arbitrator, agreements can establish parameters for AI-related discovery.<\/p>\n\n\n\n

For example, the parties might distinguish between information necessary to evaluate a particular output and unrestricted access to an entire model. They might provide for independent technical experts, controlled inspection of source code or staged discovery beginning with logs and documentation before permitting access to more sensitive materials.<\/p>\n\n\n\n

The goal is not necessarily more discovery. It is more targeted discovery.<\/p>\n\n\n\n

It is worth noting that an arbitrator\u2019s authority over discovery arises from the parties\u2019 agreement and the rules they adopt, and courts generally enforce agreed procedural limits under the Federal Arbitration Act. However, a clause that conflicts with the provider rules it incorporates invites a threshold dispute over which controls, and one drafted so restrictively that a party cannot fairly present its case invites a challenge to the award. The more prudent course is to set parameters and defaults while leaving the arbitrator room to adjust them for good cause.<\/p>\n\n\n\n

Arbitrator Qualifications and Neutral Experts<\/strong><\/p>\n\n\n\n

AI disputes can also raise highly technical questions.<\/p>\n\n\n\n

A dispute involving an AI licensing agreement might require knowledge of software development, data governance or machine learning in addition to contract law. Parties can address that concern by specifying qualifications for the arbitrator or establishing a procedure for selecting someone with appropriate technological experience.<\/p>\n\n\n\n

Arbitration agreements have long allowed parties to identify desired arbitrator qualifications. As AI disputes become more specialized, that flexibility may become increasingly valuable.<\/p>\n\n\n\n

The agreement could also allow the arbitrator to appoint a neutral technical expert when specialized knowledge is necessary.<\/p>\n\n\n\n

Part Two: AI Use Within the Proceeding<\/strong><\/p>\n\n\n\n

Perhaps the newest drafting question is whether the clause should address AI use during the proceeding itself.<\/p>\n\n\n\n

Counsel may use AI to summarize documents, organize evidence or assist with research. Experts may rely on AI-powered analytical tools. Arbitrators may use approved systems to manage large records or prepare preliminary summaries.<\/p>\n\n\n\n

The technology can improve efficiency, but it also creates concerns involving confidentiality, accuracy and transparency.<\/p>\n\n\n\n

Confidentiality is where the two sides of the problem meet. The AAA-ICDR guidance cautions arbitrators against entering confidential case information into AI tools that lack appropriate data protections. The same concern applies to counsel and testifying experts, who often handle the most sensitive technical and proprietary data in the case.<\/p>\n\n\n\n

A well-drafted arbitration clause can address that issue before a dispute arises by establishing whether confidential arbitration materials may be uploaded to third-party AI platforms and, if so, what protections must govern their retention, use, and application to model training.<\/p>\n\n\n\n

Parties may therefore consider establishing rules requiring disclosure of certain AI uses, prohibiting confidential information from being entered into public AI systems or requiring human verification of AI-generated submissions.<\/p>\n\n\n\n

The issue is no longer theoretical. The AAA\u2019s AI Arbitrator is in service, and the AAA-ICDR guidance already sets expectations for arbitrators. A clause that is silent on these issues leaves these questions to whatever the arbitrator and opposing counsel happen to assume.<\/p>\n\n\n\n

Drafting for the Dispute Before It Exists<\/strong><\/p>\n\n\n\n

No arbitration clause can anticipate every technological development. Trying to draft rules around today\u2019s specific AI products may cause an agreement to become outdated quickly.<\/p>\n\n\n\n

A better approach may be to draft around the risks, including confidentiality of technical evidence, staged technical discovery and an inspection protocol, access limited to outside counsel and independent experts, arbitrator qualifications and appointment of a neutral expert, permitted and prohibited AI use by the parties, disclosure and verification of AI-generated work, human retention of decision-making authority, and return or destruction of technical material when the proceeding ends.<\/p>\n\n\n\n

Those concepts can remain relevant even as the underlying technology changes.<\/p>\n\n\n\n

AI is making contracts more complicated, but it is also making thoughtful dispute-resolution planning more important. The arbitration clause should no longer be treated as language copied into the final pages of an agreement after the substantive negotiations are finished.<\/p>\n\n\n\n

For businesses entering agreements involving artificial intelligence, it may become part of the technology deal itself.<\/p>\n\n\n\n

\n\n\n\n

When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Andres Munoz | Practising Law Institute Artificial intelligence is changing more than how businesses operate. It is also changing the disputes they have and the contracts designed to resolve them. A traditional arbitration clause may state that disputes arising from an agreement will be submitted to arbitration, identify the governing rules and select a location.… Continue reading How Arbitration Clauses Are Being Adapted for AI-Related Disputes<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41,9,12180],"tags":[9895,42,11331,224,204],"class_list":["post-906302","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-construction-contracts","category-construction-disputes","tag-advise-consult","tag-arbitration-2","tag-artificial-intelligence","tag-construction-contract","tag-construction-disputes","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nHow Arbitration Clauses Are Being Adapted for AI-Related Disputes - 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