This post was written by Steve Petrikis.
The American Arbitration Association has introduced Alternative Fee Arrangements for arbitrators. In lieu of the traditional hourly rate billing, for any two party commercial or construction case, whether regular or complex track, the parties may select either a fixed fee or capped fee arrangement for arbitrator compensation. Any arbitrator on the AAA panel may agree to accept one of these two new options on a case- by- case basis.
Those businesses experienced in arbitration believe, and rightly so, that the selection of the arbitrator is the most important decision to be made in any arbitration proceeding. An arbitrator has significant power throughout the dispute resolution process, and any review of an arbitrator’s decision is extremely narrow in scope. A broader range of the economics applicable to such a decision, although but a part of the selection considerations, is certainly welcomed. You should be sure to explore these alternatives at the arbitrator selection stage.