AAA Issues Updates to Consumer Mass Arbitration Rules and Fee Schedule

On January 15, 2024, the American Arbitration Association® (AAA) amended its Supplemental Rules on Mass Arbitrations as well as its fee schedule. The updated rules and fee schedule reflect that mass arbitrations continue to be filed with the AAA and the AAA is implementing additional processes in an attempt to streamline those arbitrations. Specifically, the amended rules are designed to clarify issues that were often presented in connection with the filing of mass arbitrations by increasing the role and influence of appointed Process Arbitrators. Similarly, although the amended fee schedule is likely to increase the cost per case, the increase in upfront costs and shared burden related to arbitrator appointment and ranking fees may help deter abusive mass arbitrations.

The following overview of material changes is not an exhaustive list of all changes, which have been summarized by the AAA in additional detail. The material changes include:

• A requirement for filings to include an affirmation that the information provided is true and correct to the best of the filer’s knowledge
• A preference for virtual hearings
• Giving the AAA sole discretion to appoint a mediator to facilitate discussions between parties
• Significant Updates to Section MA-6 (formerly “Challenges to Initial Administrative Determinations,” now “Process Arbitrator”):
• Once all filing fees have been paid, a party may submit a written notice of dispute regarding administrative issues. The AAA then has sole discretion to appoint a Process Arbitrator to decide the dispute. The Process Arbitrator can decide the following issues (vast majority are new powers under the amended rules):
• Whether parties have met the filing requirements to arbitrate (and how to correct if not)
• Disputes over other applicable conditions precedent
• Disputes over payment of case management fees, arbitrator compensation, and other arbitration expenses
• Which demands are included in any “mass arbitrations”
• Selection process for merits arbitrators
• Determining applicable rules
• For cases under the AAA’s Consumer Arbitration Rules:
1. Whether they should be closed and transferred to small claims court
2. Whether the merits arbitrators should proceed only by documents
• The location for any live merits hearings
• Whether subsequently filed cases are part of the same mass arbitration
• Whether previously issued rulings by a process arbitrator are binding on subsequent cases
• Whether cases are fact specific and should be heard on an individual basis
• Any other issues unrelated to the merits.

The material changes to the fee schedule include:

• No difference in fees between a desk arbitration and live merits hearing
• Larger up-front Initiation Fees for both the consumer and the business, which go toward the per case overall fees
• The Initiation Fees are charged for each new mass arbitration filed, not per Claimant. If individual cases are subsequently filed and determined to be part of the same mass arbitration, no additional Initiation Fee will be required.

• Consumers are now required to pay an arbitrator appointment fee
• Arbitrator appointment and selection process fees are non-refundable in the event of a claimant withdrawal or settlement
• Arbitrator fees move to all hourly
• New $600 final case fee per case payable by the business.

See below chart for a comparison between the 2023 and 2024 fee schedules: