The AAA Revises its Commercial Arbitration Rules and Mediation Procedures
The American Arbitration Association (AAA) has revised its Commercial Arbitration Rules and Mediation Procedures, effective September 1, 2022. The goal of these revisions is to standardize longstanding AAA practices concerning confidentiality, consideration of consolidation/joinder motions, and civility. The amendments also further promote efficiency, reflect advances in technology, and include discussion on cybersecurity concerns. The following is a summary of the revisions:
* On confidentiality, the amended Rules codify the longstanding practice that all matters related to an arbitration, including the final award, are kept confidential. The amended Rules have further empowered arbitrators to issue confidentiality orders as needed.
* On the topic of consolidation and joinder, the AAA has made significant changes. More specifically, parties can now request the consolidation of arbitrations or joinder of additional parties. Unless all parties are in agreement, the decision to allow consolidation or joinder is left to the discretion of the arbitrator. In determining whether a request to consolidate or join may be granted, an arbitrator must consider: (1) the terms and compatibility of the agreements to arbitrate; (2) applicable law; (3) the timeliness of the request to consolidate and the progress already made in the arbitrations; (4) whether the arbitrations raise common issues of law and/or fact; and (5) whether consolidation of the arbitrations would serve the interests of justice and efficiency.
* On civility, new rule R-2 (c) requires that parties and their representatives appearing for arbitration pursuant to the AAA must conduct themselves in accordance with the AAA’s Standards of Conduct for Parties and Representatives (Standards). If a party fails to act pursuant to the Standards, the AAA may decline to further administer a particular case or case load.
* On promoting greater efficiency, the amended Rules prohibit any motion practice absent showing good cause and arbitrator permission. Discovery, other than a basic exchange of exhibits, also is prohibited.
* Reflecting on the advances in technology, the amended Rules now permit video, audio, or other electronic conference methods, in addition to the traditional, in-person conference, for each hearing. This development is most likely a result of pandemic-era success for AAA conferences.
* Regarding cybersecurity, the amended Rules include cybersecurity privacy and data protection issues as part of the checklist of topics for discussion at the preliminary hearing. Specifically, the amended Rules ask that discussion regarding the appropriate level of security and compliance in connection with the proceeding pursuant to the AAA is had at the preliminary hearing.
* Lastly, the Rules include the adjustment in the amount-in-controversy requirements for several types of arbitrations. Specifically, claims of up to $100,000, rather than the previous $75,000, may now qualify for expedited arbitration, allowing for a greater number of cases to utilize the expedited arbitration process. The amount-in-controversy requirement for the large, complex case track has doubled to $1 million. For a large, complex case to qualify for a panel of three arbitrators, claims and counterclaims must equal or exceed $3 million, triple the previous requirement.