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Important Notice for Businesses with Consumer Arbitration Clauses.

Wednesday, July 2, 2014

Effective September 1, 2014, the American Arbitration Association (“AAA”) is implementing a stand-alone set of rules developed specifically for the arbitration of disputes arising from consumer agreements.  The Consumer Arbitration Rules (the “Consumer Rules”) will replace the Consumer-Related Disputes Supplementary Procedures, which supplemented the AAA’s Commercial Rules.  One of the important provisions of the Consumer Rules is that, like the AAA already does under its Employment Rules, the AAA will require that it review and approve the arbitration clause the business intends to use as a precondition to the AAA administering consumer arbitrations.

The AAA will require the business to submit the consumer arbitration provision to the AAA, accompanied by the consumer review and registry fee (in addition to a renewal fee each calendar year).  The AAA will then review the clause for compliance with the AAA Due Process Protocol.  If the clause is compliant with the Protocol, the AAA will administer disputes arising out of that clause, and the business will be included on the publicly-accessible AAA Consumer Clause Registry, which will contain the name and address of the business, the consumer arbitration clause, and additional documents that may be related to the clause.

If your business has an arbitration clause in its consumer contracts that provides for disputes to be arbitrated before the AAA under the Consumer Rules or another set of AAA rules (or if your business is interested in adding such a provision to its contracts), our firm is able to assist you with ensuring that your arbitration provision complies with the Due Process Protocol, revising the arbitration provision (if necessary), coordinating submission of the template arbitration provision to the AAA, and guiding the submission through the review process.

A complete copy of the notice from the AAA is available here.

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