AAA® Enhances Arbitration with New Mass Arbitration Rules

By: Kendal Enz

The American Arbitration Association^® (AAA) has made significant updates to its Mass Arbitration Supplementary Rules and Fee Schedules, marking a step forward in making dispute resolution of large-volume filings faster, more affordable and less adversarial.

Christine Newhall, AAA senior vice president of dispute resolution services, highlighted the introduction of a Global Mediator and the expanded role of the Process Arbitrator as critical components of these updates. “The early engagement of a Global Mediator is designed to facilitate quicker settlement discussions and offer expert guidance for amicable solutions, pushing parties to consider how to resolve the dispute early on,” she said. This approach addresses the complexities inherent in mass arbitrations, where individual attention to each case is crucial despite being part of a larger group.

In addition, the AAA has enhanced the role of the Process Arbitrator, focusing on making administrative decisions early in the arbitration process. “This expanded role is about efficiently managing the resolution of potentially thousands of cases, streamlining preliminary issues such as filing requirements and the overall process,” Newhall said.

Responding to the increasing number of mass arbitration cases since 2018, primarily driven by arbitration clauses in consumer-business and employee-employer contracts, the AAA introduced a flat Initiation Fee and attestation requirements to increase cost predictability and ensure filing integrity.                               

“The flat Initiation Fees simplify the cost structure, offering predictability and manageability for all parties involved,” Newhall said. The flat Initiation Fee, which covers administrative reviews and conference calls, now also covers the appointment of the Global Mediator and/or Process Arbitrator. Newhall noted that the new attestation requirements enhance the accuracy of filings and pleadings, thereby reducing delays and complexities. Parties must now affirm that the information provided for each case is true and correct, addressing concerns about the submission of incorrect case filings.

The updated rules also feature staged fees beyond the Initiation Fee, providing a predictable cost structure crucial for budgeting and financial planning. Additionally, in line with legal developments, merits arbitrators can now review Process Arbitrator rulings based on an abuse-of- discretion standard.

The updates also focus on leveraging technology to improve efficiency. “The shift toward virtual hearings is a response to modern communication needs, enhancing the accessibility and efficiency of arbitration,” Newhall said.

These changes, developed from AAA’s extensive case experience and feedback from parties and mass arbitration panelists, are a direct response to the evolving legal landscape and the recent uptick in mass arbitration cases. “They reflect AAA’s commitment to adapting to the evolving needs of dispute resolution, ensuring a fair, efficient and accessible arbitration process,” Newhall said.

For more information, read the amended AAA Mass Arbitration Supplementary Rules, Consumer Mass Arbitration and Mediation Fee Schedule and Employment/Workplace Mass Arbitration Fee Schedule.