On September 1st, new American Arbitration Association (AAA) Consumer Arbitration Rules went into effect. The 55 new rules reportedly replaced the eight Consumer-Related Disputes Supplementary Procedures that previously applied to consumer arbitrations filed with the organization. The new rules apply to all arbitral cases filed after September 1, 2014.
According to the AAA:
The American Arbitration Association® (“AAA®,” “the Association”) applies the Consumer Arbitration Rules (“Rules”) to arbitration clauses in agreements between individual consumers and businesses where the business has a standardized, systematic application of arbitration clauses with customers and where the terms and conditions of the purchase of standardized, consumable goods or services are non-negotiable or primarily non-negotiable in most or all of its terms, conditions, features, or choices. The product or service must be for personal or household use. The AAA has the discretion to apply or not to apply the Consumer Arbitration Rule, and the parties are able to bring any disputes concerning the application or non-application of the Rules to the attention of the arbitrator. Consumers and businesses are permitted to seek relief in a small claims court for disputes or claims within the scope of the small claims court’s jurisdiction. These Rules were drafted and designed to be consistent with the minimum due process principles of the Consumer Due Process Protocol.
As part of the new Consumer Arbitration Rules, companies that seek to utilize the AAA’s services must submit a non-refundable fee along with their proposed consumer arbitration provision to the organization for review to ensure it “substantially and materially complies with the due process standards of the Consumer Due Process Protocol.” Following approval, the clause will be included in a newly created and publicly available Consumer Clause Registry. Any business that fails to submit its arbitral agreement to the AAA prior to a consumer arbitration being filed with the organization will be subject to an additional fee for expedited review.