Arbitration is generally considered the more efficient and less expensive alternative to litigation in court, but it doesn’t always seem that way. Recent amendments to the American Arbitration Commercial Arbitration Rules and Mediation Procedures (effective September 1, 2022) (“AAA Rules”) are consistent with the AAA’s mission purpose from 1950, to provide parties “an orderly, economical, and expeditious procedure for the determination of their dispute.” The most significant of these changes severely limit motions practice and expressly provide for the use of remote technology during proceedings.
The following rule changes provide for remote proceedings and testimony:
- R-22 expressly provides for the preliminary hearing to be conducted by videoconference.
- R-25 lists “video, audio, or other electronic means” as a method of hearing.
- R-33(c) affords the Arbitrator discretion to permit “some or all of the presentation” by “video, audio, or other electronic means other than an in-person presentation,” as long as the parties have “full opportunity” to present evidence and cross-examine witnesses.
These rule changes restrict discovery and motions practice:
- R-34 affords the Arbitrator discretion to permit dispositive motions, but “only if” the moving party shows the motion is likely to succeed and/or narrow the issues in the case.
- In expedited cases, Rule E-5 prohibits any motions and discovery (other than exchanging exhibits) without a finding by the Arbitrator of “good cause.”
Other changes address cybersecurity and confidentiality:
- Preliminary Hearing Procedure P-2(vi) adds “cybersecurity, privacy, and data protection” to the preliminary hearing checklist.
- R-45 (new rule) requires the AAA and the Arbitrator to keep arbitrations confidential and permits the Arbitrator to issue confidentiality/protective orders upon request.
Other notable changes to the AAA Rules include: permitting a party to request that the Arbitrator “interpret” an award (R-52); increasing the threshold for Expedited Procedures from $75,000 to $100,000 and increasing the threshold for Large, Complex Case Procedures from $500,000 to $1,000,000 (R-1(b) and (c)); and providing for consolidating existing arbitrations and joinder of parties (R-8).
These changes to the AAA Rules reflect the integration of efficiency and technology in accordance with the long-standing premise of the AAA to streamline the disputes process. These changes not only promote the efficiency that has long defined arbitration, but they also memorialize the shift that litigants have seen in recent years toward using video and other technology. Given these recent changes it is worth considering the Commercial Industry Rules in lieu of the Construction Industry Rules.