AAA Updates Mass Arbitration Rules to Be More Favorable to Business

As previously discussed on the blog, corporate defendants have in several cases refused to comply with AAA’s rules regarding payment when customers invoke their contractual rights and file arbitration demands en masse.

Reacting to the complaints of corporate defendants, AAA has now altered its mass arbitration rules to, among other things, drastically reduce the fees that such a defendant must pay where numerous claims are filed against it and potentially (but not necessarily) increase fees for individuals. The AAA’s press release is here. Whereas companies were previously on the hook for filing fees in each case, potentially reaching into the millions, they will now only have to pay a $8,125 flat “initiation fee”; consumers will pay a $3,125 initiation fee. Additional fees will be required after the initial stage. The new fee schedule will result in substantial savings for the corporate defendants, as compared to the previous fee schedule. Unsurprisingly, the defense bar is pleased with these changes.

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