American Arbitration Association Amends Construction Industry Arbitration Rules

Many construction contracts call for disputes to be decided by arbitration under the auspices of the American Arbitration Association (AAA). In 2024, the AAA amended its rules governing AAA construction industry arbitrations. Space limitations prevent full recitation of those changes, but a short discussion of some of the more significant amendments follows.

R-7. Consolidation and Joinder

A frequent issue in construction arbitration is whether additional parties may be joined or whether the case can be consolidated with another arbitration. Formerly, the AAA required that such requests be submitted within 90 days after filing. That option has been removed, and requests for consolidation and joinder generally must be filed before appointment of the arbitrator who will decide the merits. The AAA may appoint a special arbitrator to decide consolidation and joinder issues, who is different from the merits arbitrator. Parties have 14 days to reply to consolidation requests. If a party seeks leave to join an additional party after the merits arbitrator has been confirmed, that party must establish prejudice if the request is not permitted (in addition to good cause, which was previously required). Whether parties can be joined or the case can be consolidated with other arbitrations is a case-specific inquiry.

F-1. Fast Track Applicability

The AAA offers a fast-track option with procedures that are tailored to minimize cost and expedite dispute resolution. The fast-track procedures are applied to claims that do not exceed $150,000 (up from $100,000).

R-34. Dispositive Motions

One difference between arbitration and court disputes is the use of dispositive motions prior to trial in a court case or a final hearing in an arbitration. Dispositive motions are frequently filed in court cases but are generally disfavored in arbitration. The rules have been amended to provide that the arbitrator may consider cost and overall efficiency in determining whether to grant leave for a party to file a dispositive motion.

L-3. Large, Complex Disputes

Unless the parties agree to three arbitrators, only one arbitrator will be appointed to preside over the arbitration, unless the case involves claims of at least $3 million, in which case three arbitrators will be appointed. The prior minimum threshold for three arbitrators was $1 million.

If you would like a more detailed explanation of the AAA Construction Industry Rules or help with an existing dispute, please do not hesitate to reach out to the author or any member of Steptoe & Johnson PLLC’s Construction Group.