Notable AAA Arbitration Rule Revisions in 2013


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As others are reflecting on notable events in the past year, I think about the American Arbitration Association’s 2013 revisions to its arbitration rules, and what those revisions mean to arbitration.

First, effective October 1, the AAA’s revised Commercial Arbitration Rules make several important changes to the arbitration process.  All of the changes are summarized on the AAA’s website, but a few notable ones include:

  • R-9: All arbitration claims exceeding $75,000 must be mediated concurrently with the arbitration, unless any party opts out.  Notable for one of the original arbitration service providers to recognize the value of mediation as a critical ADR step in most cases.
  • R-21: Arbitrators should schedule a preliminary hearing “as soon as practicable” after their appointment and related procedural rule P-1 provides a checklist of 19 items the arbitrators should cover during the preliminary hearing.  Notable for how explicit the directions are to the panel as to how to conduct the hearing, but cautions the panel and parties not to “import” court-like procedures into the arbitration.
  • R-22 now addresses discovery in more detail, and provides additional tools to the panel to manage the discovery process.  Notable for its explicit reference to e-discovery.
  • R-33 now expressly mentions the authority of the panel to decide pre-hearing motions.   Notable because the old rules were silent as to pre-hearing motions.
  • Revised Rule 58 (and rule 23) authorizes the arbitrators to impose sanctions for failure of a party to comply with an order of the panel or any of the AAA rules. Notable, just notable.

Second, as of November 1, AAA adopted Optional Appellate Arbitration Rules.  Those rules allow for a “high-level review” of arbitral awards in large, complex cases on grounds not available in court for review of arbitral awards (i.e., errors of law) by consent of all parties.  The AAA will supply former federal or state judges, or “neturals with strong appellate backgrounds” as the appellate reviewers.  These rules are a direct response to disputants’ concerns that there are very limited grounds on which a court can vacate an arbitration award, and the Supreme Court ruled in 2008 that parties cannot contractually expand those grounds.  In large, complex cases, parties simply have too much at stake to yield that much authority and finality to the arbitration panel.  Notable as the AAA attempts to maintain arbitration as an attractive ADR mechanism for parties, yet offer court-like features to respond to criticism that arbitrators lack accountability.

I look forward to assessing ADR developments in 2014!

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Jill Gross
Jill Gross is a Professor of Law and the Director of the Investor Rights Clinic at Pace Law. She teaches the Investor Rights Clinic and Seminar, Mediation and Arbitration, Professional Responsibility, and Securities Litigation and Enforcement. She has published numerous law review articles in the area of dispute resolution and investor justice, and has been quoted in the national media on issues relating to securities arbitration. She is also a contributor to ADR Prof Blog.

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