Arbitration before the AAA is great, if you’re the respondent. You can totally stymie the process by neglecting to pay your fees. Then the arbitration will be suspended or even terminated without a decision, unless the claimant ponies up money that you might never repay.
That is one of several reasons why I don’t like arbitration clauses for my clients, whom I expect — based on their uniform good character and pleasantness — to be always the claimants and never respondents.
Other reasons that I dislike arbitration clauses include:
- the parties have to pay the arbitrator an hourly rate and the AAA a large administrative fee for the privilege of having the dispute considered.
- there is no prompt mechanism to compel discovery (regardless whether the judicial mechanisms could be considered “prompt” on their own, a deadlocked arbitral discovery dispute can’t be resolved without going through court process even after the arbitrator decides).
- there is no meaningful mechanism to compel a witness to attend or be deposed (again, you have to go to court to get an arbitral subpoena enforced).
- arbitration is not noticeably quicker than State court.
- arbitration could be quicker than Federal court, except that the respondent in an arbitration can delay indefinitely by just not paying their fees.
You may be wondering why I keep coming back to the concept of the respondent not paying their fees. It’s because I’ve seen it repeatedly.
