The American Arbitration Association has announced changes to the fee structure for Mass Arbitration filings, making it less expensive for companies who receive multiple filings from consumers. Some consumers and plaintiff’s attorneys have shifted their focus to filing arbitration claims instead of lawsuits, because the costs associated with defending arbitration claims could induce companies to be more interested in settling cases rather than defending them.
The What: Instead of being forced to pay fees each time a claim was filed, companies will now only have to pay a flat fee of $8,125. Consumers will be required to pay an initiation fee of $3,125. Additional fees will be required as the claim works its way through the adjudication process.
- Previously, if a law firm purported to represent 10,000 consumers and filed 10,000 arbitration claims, the company would have to pay a fee for each claim to initiate the process — which often reached into the millions of dollars.
- The AAA is also now requiring firms filing mass arbitration claims to submit an affirmation that the information provided for each individual case is true and correct to the best of the representative’s knowledge.
The Why: The AAA said that the new rules and fee structures will streamline the process, allowing for faster outcomes. It also said that settlement analysis and discussions will happen sooner, allowing for more cases to be resolved faster.
The Last Word: “We’ve listened to the needs of individuals and businesses involved in mass arbitrations,” said Christine Newhall, AAA’s senior vice president of dispute resolution services, in a statement. “These revised rules and fees reflect our deep expertise and are crafted to save time, reduce costs and foster constructive dialogue right from the start.”
