I just finished a construction arbitration this past week, which also explains my sporadic posts as of late, sorry.
Coincidentally, on July 1, 2015, the American Arbitration Association (“AAA”) implemented their newly revised Construction Industry Arbitration and Mediation Procedures.
For those of you who follow our blog, you know I’m not a big fan of arbitration, which, from my experience, doesn’t deliver on its promise of better, faster, or cheaper, and ends up being pretty much the same thing as trial without the benefit of discovery, the rules of evidence, or appealability.
The AAA is trying to change all of that though and in a news release announced that its new “Rules” “directly address preferences of users for a more streamlined, cost-effective, and tightly managed arbitration process that avoids the high costs of litigation.” Which makes you wonder whether they had to survey their “users” to come to this realization. But I digress.
With the AAA’s new Rules come eight new changes, as follows:
- Fast Track Procedures: Newly revised Rule F-1 now applies to two-party cases where no party’s claim or counterclaim exceeds $100,000. Under old Rule F-1 the monetary cap was $75,000.
- Consolidation and Joinder: Newly revised Rule R-7 now requires that requests for consolidation (of other arbitrations) or joinder (of parties) be submitted prior to the appointment of an arbitrator, or within 90 days of the date that the AAA determines that all administrative filing requirements have been satisfied, whichever is later. Under old Rule R-7 there was no deadline for requests for consolidation or joinder.
- Preliminary Management Hearing: Newly revised Rule R-23 provides that the timing of a preliminary management hearing is “[a]t the discretion of the arbitrator” although it “should be scheduled as soon as practicable after the arbitrary has been appointed,” and provides that at the hearing “the parties and arbitrator should be prepared to discuss and establish a procedure for the conduct of the arbitration” and refers to new Rules P-1 (General) and P-2 (Checklist) for specific issues to be considered. New Rules P-1 and P-2 modify the issues to be considered under old Rule R-23.
- Emergency Measures of Protection: New Rule R-39 allows a party to apply for emergency relief such as a temporary restraining order, requires the AAA to appoint a single emergency arbitrator within one (1) business day of receipt of the application, and requires the emergency arbitrator to establish a schedule for consideration of the arbitrator within two (2) business days of appointment.
- Pre-Hearing Exchange and Production of Information: Newly revised Rule R-24 provides that an arbitrator “on application of a party or on the arbitrator’s own initiative” may: (a) Require the parties to exchange documents on which they intend to rely at the hearing; (b) Require the parties to update their exchanges as such documents become known to them; (c) Require the parties, in response to reasonable document requests, to make their documents available to the other party; and (d) Require the parties, when documents are maintained in electronic form, to make such documents available in the form most convenient and economical for the party producing those documents unless the arbitrator orders otherwise. Old Rule R-24 simply provided that at the request of any party or at the discretion of the arbitrator the arbitrator could direct the production of documents and other information and the identification of any witnesses to be called.
- Mediation: Newly revised Rule R-10 provides that, in all cases where a claim or counterclaim exceeds $100,000, the parties shall mediate their dispute, subject to a party’s ability to “opt out” of mediation unless their agreement requires mandatory mediation. Under old Rule R-10 mediation was voluntary by the parties.
- Dispositive Motions: New Rule R-34 permits an arbitrator, upon prior written application, to consider motions that dispose all or part of a claim, or narrow the issues in a case.
- Sanctions: New Rule R-60 permits an arbitrator, upon a party’s request, to order appropriate sanctions if a party fails to comply with its obligations under the Rules or with an order of the arbitrator.
Want to learn more? AAA’s new Rules can be found here.