On April 1, the American Arbitration Association (AAA) announced the launch of its new Consumer Mediation Procedures and Fee Schedule. According to the announcement, updates aim to simplify and make dispute resolution more accessible for consumers, particularly those who are self-represented and may be unfamiliar with the mediation process. Prior to the adopting the procedures, the AAA did not have any processes in place for explaining the benefits of mediation or disclosing the fees associated with using a AAA mediator.
Advantages of Mediation
AAA asserts that mediation offers several distinct advantages over other forms of dispute resolution:
- Control Over Outcome: Parties maintain control over the outcome with the help of a mediator who facilitates productive dialogue and fosters mutual understanding.
- Time and Cost Efficiency: Mediation is often resolved in a fraction of the time and at a significantly lower cost compared to litigation.
- Customized Solutions: The flexible nature of mediation allows parties to craft customized solutions, leading to more satisfactory and lasting agreements.
Key Rules and Procedures
M-1. Agreement of the Parties: Parties agree to follow the Consumer Mediation Procedures in place at the time a Request for Mediation is submitted.
M-2. Initiation of Mediation: Any party can start the mediation process by submitting a Request for Mediation online through AAA WebFile.
M-3. Representation: Parties may participate with or without a lawyer or non-lawyer representative.
M-4. Selection of the Mediator: Parties can search the AAA’s Panel of Mediators to agree on a mediator, or the AAA will select one if no agreement is reached.
M-5. Mediator’s Impartiality and Duty to Disclose: Mediators must disclose any potential conflicts of interest and abide by the Model Standards of Conduct for Mediators.
M-8. Responsibilities of the Parties: The parties are encouraged to exchange all documents pertinent to the claim. Each party will ensure that a person with authority to settle the case attends the mediation. Before and during the scheduled mediation session(s), the parties and their representatives will exercise their best efforts to prepare for and engage in a meaningful and productive mediation. The parties must respond to requests for mediation dates in a timely manner, be cooperative in scheduling the earliest possible date, and keep to the established schedule.
M-11. No Written Record: There will be no written record of the mediation process other than a settlement agreement.
M-12. Termination of Mediation: The mediation will be terminated:
- By the execution of a settlement agreement.
- By the mediator’s written or verbal statement that further efforts at mediation would not result in a resolution.
- By a written or verbal statement by all parties that the mediation proceedings are terminated.
- When there has been no communication between the mediator and any party for 21 days after the end of the last mediation session.
M-15. Deposits: The AAA will require the parties to send a deposit covering the mediator’s expected costs and expenses before the mediation begins, unless the mediator gives different instructions. When the mediation ends, the AAA will render an accounting to the parties and return any unused amounts.
M-16. Expenses: The business will pay all mediation expenses unless the parties agree otherwise. This includes required travel as well as mediator fees. The expenses of participants for either side will be paid by the party requesting the attendance of such participants.
M-17. Costs of Mediation: The AAA has introduced a low filing fee and a flat hourly mediator rate for consumer mediation.
- Individual Filing Fee: $25
- Business Filing Fee: $225
- Mediator Compensation: $300 per hour
Our Take
Early resolution of cases through the mediation process benefits consumers and businesses. The flat rate of $300 per hour for mediator compensation is fair, and less than what most private mediators would charge in many locations throughout the nation. In light of the procedure imposing mediation costs on the business unless the parties agree otherwise, companies should review their arbitration provisions and make sure that any mediation pre-condition to arbitration is consistent with respect to payment of costs or sets forth clearly that notwithstanding any procedures of the arbitral forum, the parties agree that the costs of mediation should be shared equally.
