Corporate Counsel and Litigators

Do you have court cases stalled due to COVID-19, with limited or no access to remote court proceedings, or are you facing imminent litigations that could languish in court?

You easily can convert your cases to arbitration hearings for a faster resolution. The AAA offers parties a tailored and expedited dispute-resolution pathway with our time-tested rules and procedures and virtual hearing experience.

Dispute resolution by arbitration is on average more than 12 months quicker than litigation.1 Add a pandemic that has caused further court delay and disruption and the difference increases exponentially. Courts' mounting backlog undoubtedly will be augmented by COVID-19-related cases. Arbitration to avoid further delays could be in everyone’s best interests.

Attorneys may have concerns about switching from litigation to arbitration and/or virtual arbitration. See below how arbitration offers many of the same features of a court trial (and some that surpass it) and how the AAA is prepared to meet all your concerns.

Venue Concerns

Concern: My case necessitates a judge.

Parties still can get their cases before judges.

The AAA Judicial Panel is composed of high-level, diverse former federal and state judges, including trial and appellate jurists, from 44 states plus the District of Columbia and Puerto Rico. 

With a virtual arbitration hearing, location is not an impediment to selecting any one of them to hear a case; in fact, remote hearings offer more flexibility in choosing the appropriate judge.

Concern: In litigation, I have access to the past rulings of the trial judge in my case, which is not possible with arbitration.

On the contrary, previous court decisions of members on the AAA Judicial Panel judges also are publicly available.

Concern: My case would benefit from a jury.

With court delays caused by the COVID-19 pandemic, a jury trial is unlikely in the near future. Moreover, AAA arbitrators are decision makers with subject-matter expertise, whereas jurors may not have such specific knowledge of the case to make as informed decisions.

The Enhanced Arbitrator Selection Process for Large Complex Cases allows counsel on high-value cases to prescreen candidates further for an even more precise selection.

Concern: Court provides a binding decision with the option of an appeal.

Arbitration offers a binding solution, and parties to AAA arbitrations can agree to use the appeal process via the AAA Optional Appellate Arbitration Rules. Unlike a drawn-out court appeal, these appellate procedures adhere to a fast, strict timeline.

Concern: Is the AAA experienced in virtual hearings?

Virtual hearings are not a new concept to the AAA, which has supported this option for years! The current pandemic simply has increased the size and number of the procedures.

The AAA offers a smooth virtual hearing experience for parties and their attorneys. The AAA virtual hearing hosting services will take care of all logistics, including providing instruction to all participants on using the virtual platform.

Please see AAA Virtual Hearings for all the details. 

Concern: Has the AAA received submissions to arbitration from litigating parties or those reconsidering litigation in light of courts’ closing or delays? 

Following are some examples of those cases that the AAA has received in the past year:

  • $100 million commercial dispute between a contractor and manufacturer
  • Multi-million dollar commercial dispute between an individual and a business/ productivity software company
  • Multi-million dollar legal-services dispute 
  • Insurance coverage dispute involving $500,000+ heard under the AAA’s Commercial Large Complex Case Procedures 
  • Dispute arising out of a technology licensing agreement with claims involving a few hundred thousand dollars 
  • International entertainment partnership agreement involving a few hundred thousand dollars 
  • Dispute arising out of a charter and rental agreement involving less than $25,000 
  • Construction dispute involving an undisclosed amount of damages
Financial Concerns

Concern: Arbitration is more costly than going to court.

Read the following to dispel that impression!

Filing Fees

The initial AAA Filing Fees can be comparable to court filing fees, (complaint, appearance, and jury demand fees) and often are less expensive in some situations, such as consumer cases or cases under $75,000. 

Only about one-third of the cases filed with the AAA reach the evidentiary hearing stage. Nearly two-thirds of disputes filed with the AAA settle prior to the first hearing, many of which without accruing any arbitrator compensation.

AAA filing fee covers all administrative work involved in the arbitration, including scheduling matters, the arbitrator selection process, and arbitrator deposit arrangements. The AAA case manager functions as a neutral intermediary—available to help solve any administrative issues—both between the parties and between the parties and the arbitrator to ensure the case proceeds quickly to a resolution. 

Alternative Fee Arrangements (AFA) 

The AAA’s AFA, similar to the arrangement that businesses use as an alternative to hourly rates for outside counsel, can relieve parties concerned that an arbitrator is too expensive. The AFA is available for two-party commercial and construction cases with a single arbitrator. 

Options are

Fixed fee arrangement: Parties and the selected arbitrator can agree to an overall fee for the cases divided into fee segments.

Capped fee arrangement: Parties and the selected arbitrator can agree to a maximum fee for the entire process, and the arbitrator’s hourly rate is billed and paid until the cap is reached.

Streamlined Three-Arbitrator Panel Option for Large, Complex Cases 

Parties may prefer a panel of three arbitrators but not the expense. Where all parties agree to this option, it allows parties to move through the preliminary and exchange of information (discovery) stage of a case with a single arbitrator, utilizing the full panel to participate in the evidentiary hearing and render the final award on the case. 

The streamlined panel option significantly limits costs, as the entire panel participates only in the evidentiary hearing.This option may be tailored per party agreement; for example, the parties can agree that the entire panel will decide dispositive motions. 

Functional Case Concerns

Concern: Are there options to move the case along via arbitration and then return to litigation?
    
Arbitration may be used to resolve key or immediate procedural or substantive issues while the courts are unavailable due to delays. Attorneys also have the option to agree to submit a limited number of issues to arbitration.
    
All parties must agree. A Submission to Arbitrate agreement outlining the parameters of the agreed-to arbitration must be submitted. An AAA case manager can help with this process if parties need guidance.

As noted, most cases filed with the AAA settle before the hearing. Parties can only benefit from getting the process going. The third of the cases that are filed and do not settle will not have missed a beat; parties either can agree to continue with arbitration or go back to waiting for the courts to hear their case. 

Concern: How do I get started to submit my case to arbitration?

File a Submission to Arbitration form. Party agreement is required, but only one form with both parties’ information included is necessary. Parties should consult with counsel as how to address pending litigation.

 

1On average, U.S. district court cases took more than 12 months longer to get to trial than cases adjudicated by arbitration (24.2 months vs 11.6 months). Efficiency and Economic Benefits of Dispute Resolution through Arbitration Compared with U.S. District Court Proceedings, Micronomics 2017

Important Links

The following links appeared in the text above. 

For more information on any stage in the process, please fill out the form to the right or you may contact

Svetlana Gitman, Vice President, AAA Commercial Division
Email:
GitmanS@adr.org
Telephone: 773.820.7801