The past week has been one of sweeping changes. (…no comment…) But one set of non-controversial changes is the Revised Construction Industry Arbitration and Mediation Procedures released by the American Arbitration Association.
The Rules, which take effect July 1, 2015, can be downloaded here. The major revisions include:
- A mediation step for all cases with claims of $100,000 or more (subject to the ability of any party to opt out). Under the revised Rule 10, “…the parties shall mediator their dispute” where the claim or counterclaim exceeds $100,000. The mediation is to take place concurrent with the arbitration proceedings so as not to cause delay.
- Consolidation and joinder time frames and filing requirements to streamline these increasingly involved issues in construction arbitrations. Revised Rule 7 requires that all requests for consolidation or joinder must be made prior to the appointment of an arbitrator or within 90 days of the date AAA determines all administrative filings have occurred, whichever is later. A response to a request for consolidation is due within 10 days and a response to a request for joinder is due within 14 days. The AAA has the authority to stay the arbitration or arbitrations impacted by the request.
- New preliminary hearing rules to provide more structure and organization to get the arbitration process on the right track from the beginning. New Rule 23 provides that at the discretion of the arbitrator, and depending upon the size and complexity of the matter, a preliminary hearing is to be scheduled as soon as practicable following the appointment of the arbitrator. The Rule also includes a checklist comprised of 20 items that depending upon the size, subject matter, and complexity of the dispute may be addressed during the preliminary hearing subject to the discretion of the arbitrator.
- Information exchange measures to give arbitrators a greater degree of control to limit the exchange of information, including electronic documents. New Rule 24 provides clarity to former rule regarding “Exchange of Information.” The arbitrator has greater control over the exchange of information with a view toward achieving an economical resolution, while also balancing each party’s ability to present their case. As to electronic documents, the new rule provides that such information should be produced in the manner most convenient and economical for the producing party.
- Availability of emergency measures of protection in contracts that have been entered into on or after July 1, 2015. New Rule 39 will enable parties to apply for emergency interim relief before an arbitrator that will be appointed within 24 hours of the AAA’s receipt of the request for emergency relief. The Rule provides that a party may seek emergency relief by notifying the AAA and the other parties to the arbitration, and then the AAA will quickly appoint an emergency arbitrator to address the emergency issue.
- Enforcement power of the arbitrator to issue orders to parties that refuse to comply with the Rules or the arbitrator’s orders, including the following issues: (a) confidential documents and information; (b) reasonable search parameters for electronic and other documents; (c) costs of producing documentation; (d) issues of willful non-compliance with any order; and (e) other types of enforcement orders.
- Permissibility of dispositive motions to dispose of all or part of a claim. New Rule 34 This specifically provides that upon prior written application, the arbitrator may permit motions that dispose of all or a part of a claim, or narrow the issues in a case.
The revised rules also include provisions for giving arbitrators the power to award sanctions, disclosure provisions, and evidence by affidavits and post-hearing filings of documents.