American Arbitration Association now vets arbitrators for hefty fee

April 26, 2015  //  By:   //  Arbitration, Consumer News  //  No Comment

by Carol Thompson

There have been numerous complaints about consumers learning after-the-fact that the arbitrator deciding their case had a conflict-of-interest.

The consumer bears the responsibility of vetting an arbitrator prior to a hearing, and it’s rare for the courts to vacate an arbitrator’s decision based on a conflict of interest.

The American Arbitration Association, one of the nation’s largest arbitration firms, now offers what is called “Arbitrator Select,” a service that, among other things, will check for conflicts. It comes at a price and one that many consumers may find too hefty.

The AAA Arbitrator Select List only provides the service of the AAA acting as a referral source for identifying arbitrators to hear parties’ cases. The AAA will provides a list of up to five, up to 10 or up to 15 arbitrators best qualified to resolve the parties’ dispute based on criteria provided by the filing party, according to the organizations website.

The AAA  Arbitrator Select and Appointment service assists the parties in identifying arbitrators and selecting and/or appointing the neutral. The AAA does the same search as in Arbitrator Select List Only, going further to determine the arbitrators’ availability to serve, to facilitate conflicts checks and arbitrator selection or to appoint an arbitrator if there is no agreement among the parties.

For a list of up to five arbitrators, the organization charges $750 and an additional $750 if another five names are needed.  For a list of up to 10 arbitrators the cost is $1,500 and an additional names, if needed will cost $750.

According to the website, there is a minimum non-refundable search fee of $750. “If the AAA, in its sole discretion, is unable to compile an appropriate list of arbitrators after completing a search, the balance of the List Only Service Fees will be refunded,” the website notes.

AAA states that the arbitrator shall be impartial and independent and shall perform his or her duties with diligence and in good faith, and shall be subject to disqualification for:

(i) partiality or lack of independence,
(ii) inability or refusal to perform his or her duties with diligence or in good faith or (iii) any grounds for disqualification provided by applicable law.

Should one of the party’s objection to the continued service of an arbitrator within seven days of the arbitrator’s appoinment, or on its own initiative, the AAA shall determine whether the arbitrator should be disqualified under the grounds set out above, and shall inform the parties of its decision, which decision shall be conclusive.

 

About the Author :

Carol Thompson is a veteran investigative reporter residing in central New York. She spent 23 years with a local newspaper, The Valley News, before leaving for the Syracuse New Times, and now, VNN. Thompson has won dozens of first-place awards for investigative reporting and was the 2006 recipient of the Syracuse Press Club’s prestigious Selwyn Kershaw Professional Standards Award. Thompson’s reporting has resulted in the arrest of public officials and has prompted policy changes. She uncovered two money laundering schemes that traveled the globe and resulted in the indictments of several developers.