Guest Commentary

Opinion: A Shifting Tide Under Revised AAA Commercial Rules

, The Connecticut Law Tribune


The overarching purpose of the revisions is to accomplish more expeditious and efficient proceedings, with greater control and responsibility afforded to arbitrators to ensure this result, while permitting parties access to information necessary for the arbitrator to understand and fairly decide the case. So we have the leading provider of arbitration services standing firmly behind the principle that, in order to retain its value, arbitration should return to its roots.

A few comments on how this may work in practice and can be optimally implemented: (Note: While I am a member of the Commercial Panel, I am not speaking for AAA).

First, arbitrators have to apply the rules as an imperative to focus the dispute, enforcing rigorous case management. Parties and counsel must realize that, providing by contract that the AAA Commercial Rules govern mandatory arbitration, or in submitting a case for administration by AAA, the arbitrator controls the process. While case management remains a shared responsibility, the arbitrator is in charge and has broad management and enforcement authority under the rules.

There is an issue here that is acknowledged but not often expressly addressed. Arbitrators are hired by the parties and counsel, who pay their bills. Arbitrators allowing counsel to take control of a case can be motivated by concern that word of an arbitrator's strict case administration will "get around" and result in fewer appointments. The new rules should trump this concern, although the discovery provision for "safeguarding each party's opportunity to fairly present its claims and defenses" may provide some wiggle room. The mandate for streamlining, however, is clear, and rigorous, sensible administration, together with considered and reasonable decisions applying the facts and following the law, should put an arbitrator in greater demand.

Second, while the "opt out" loophole may swallow the rule in some cases, requiring that "the parties shall mediate their dispute" concurrently is a tremendous addition. Mediation is now actively on the table, allowing the parties to pursue mediated negotiations without the all too common fear of appearing "weak" for suggesting it. Time will tell the extent to which this provision will lead to earlier consensual resolution of cases that otherwise would settle on the eve of or during the arbitration hearing, but the new rule surely is a positive step.

There are certain to be articles and programs addressing practice under the new rules over the months to come. The proof will be in the application of the rules by arbitrators and counsel alike to implement the directive to shift commercial arbitration to a more efficient process, enabling businesses to achieve a reasonable result without the substantial burden and cost of conventional litigation.•

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