“Updated AAA Rules and Fees Could Change the Mass Arbitration Landscape”

Companies seeking to avoid defending class actions sometimes include in contractual terms and conditions provisions requiring consumers claiming aggrievement to arbitrate their claims in individual proceedings. Attorneys representing consumers have responded by asserting mass claims–sometimes numbering in the thousands–which require the companies to pay exceedingly large fees to arbitration service providers to have the claims administered. The companies, unhappy with the predicament in which they have found themselves, sometimes resort to the courts, which largely have been unsympathetic, finding that the companies brought the problem on themselves by contractually requiring consumers to forego class action litigation in favor of individual arbitrations.

More recently, arbitration service providers, including the American Arbitration Association, have begun to address the mass arbitration phenomenon by adopting and/or amending their rules regarding administrative fees.

This article, by Stefan Mentzer, W. Kyle Tayman, Scott Weingaertner and Matthew Wisnieff at Goodwin Proctor, available at JD Supra, reviews the recent changes to rules and fee schedules adopted by AAA, including an affirmation requirement intended to ensure that the parties are appropriately invoking the new rules and schedules.