Robert Botkin, Sarah Hutchins, and Susie Lloyd wrote an article in the American Bar Association’s Business Law Today about how recent litigation has put a once-obscure governance document at the center of artificial intelligence litigation strategy. They outline how companies using or building AI tools should treat system cards as legal and compliance documents, keeping them accurate, current, and supported by documented mitigation steps.

"System cards, the structured disclosures AI developers publish to describe how their systems perform, are now being used by both plaintiffs and defendants to establish what a company knew, when it knew it, and whether its safeguards were adequate," they wrote. "For lawyers advising companies that build or deploy AI tools, understanding how these documents create legal exposure is key in a thoughtful risk mitigation strategy."

"The risks are similar, but not exactly the same, across AI developers, companies that build tools on AI platforms, and companies that use AI tools," they continued.

"System cards function primarily as evidence rather than as an independent cause of action," they wrote. "They can nonetheless give rise to liability where the disclosure itself is false or misleading because AI capability representations are subject to Section 5 of the Federal Trade Commission Act and, in California, to civil penalties under the Transparency in Frontier Artificial Intelligence Act enacted in 2025."

You can read the full article here: Show Me Your System Cards: AI Risk and What Companies Should Know

Business Law Today examines substantive and procedural issues relating to corporations, banking, business law, and practice-oriented topics.