The AAA® has inaugurated a new set of supplementary rules that enable parties to predict the time and cost of their construction arbitration. These Supplementary Rules for Fixed Time and Cost Construction Arbitration were designed in response to increasing concerns among users that they are unable to foresee the ultimate fees and completion time of construction arbitrations.
With the use of these new supplementary rules, parties can calculate:
The maximum time to complete the arbitration.
The number of hearing days the arbitration will run.
The arbitrator costs.
The AAA administration fees.
For example, for cases in the $250,000 to $500,000 range, the rules prescribe a maximum of 180 days from filing to award, with no more than three hearing days. Arbitrator compensation for hearing days and study time (limited to 12 hours) is capped at $275 an hour. Administrative fees to the AAA are fixed at $5,000.
The supplementary rules also encourage client participation by requiring that each party representative provide contact information for a “designated employee,” such as in-house counsel or senior level executive, and require that the AAA and/or arbitrator include such designated employees on all communications related to the arbitration.
The construction experts on the AAA’s National Construction Dispute Resolution Committee (NCDRC) worked in tandem with the AAA to create these innovative rules which provide for more time and cost certainty in construction arbitrations.