What Does It Cost for AAA, JAMS, or CPR to Administer an Arbitration Case and How Do the Initial Filings Vary?

In my article for The Florida Bar Journal, I made a mistake in calculating the filing fees for American Arbitration Association (AAA) cases. I apologize for any confusion this may have caused. The correct fees for a $20 million claim and $5 million counterclaim should be $19,800 and $31,250, respectively. I also want to mention that the AAA has introduced new rules for construction arbitration cases that can reduce fees. Thank you for your understanding. Arbitration organizations have rules to make it easy to use their services, but many people don’t know how much it costs to go through arbitration. CPR has different rules for cases they fully administer and cases they don’t. Some lawyers use CPR’s case management services, while others handle their own cases. In nonadministered cases, the lawyers and parties do the administrative work that the organization would do in an administered case. Lawyers may choose nonadministered arbitration to save money on fees for administration services. However, without arbitration organization, there may be delays and extra costs if judicial intervention is needed. ConsensusDocs, a company that makes construction contract documents, now allows parties to choose between different arbitration organizations for their cases. The AAA rules require the AAA to administer the arbitration, while JAMS and CPR rules do not have this requirement. This gives parties a choice in how their cases are administered. If you want to change your agreement for arbitration and choose a different organization to handle your case, you can do that as long as it’s not against the law. The costs for filing and managing your case with different organizations may vary. For example, for a case with a claim of $100,000 and three days of hearings, one organization may be cheaper than another. The same goes for cases with different amounts of money and hearing times. Overall, you should compare the costs of different arbitration organizations before making a decision. Under the AAA construction industry arbitration rules, the filing and final fees are based on the amount of the claim or counterclaim, not on the length of time it takes to hear the case. There is a standard fee schedule and a flexible fee schedule, each with different costs. The standard fee schedule is cheaper for cases that take longer to resolve, while the flexible fee schedule is cheaper for cases that are resolved quickly.

For example, for a $100,000 claim, the total standard administrative fees to the AAA is $2,600. For a $5,000,100 claim and a $200,000 counterclaim, the standard administrative fees would total $20,250. For a $20,000,000 claim and a $5,000,000 counterclaim, the total administrative and case management fees to the AAA under the standard fee schedule is $40,250. In addition, there are additional fees for the arbitrators and room rental costs. There are fees for starting a case and managing it through JAMS. The fees are based on how many days the case takes to hear and any extra time the arbitrator spends on the case. There’s also a fee for using the JAMS Resolution Center. The fees can add up to a lot of money, so it’s important for parties to try to finish their case quickly to avoid paying more. In Case C, parties have to pay a filing fee of $400 each, and for a 15-day hearing, they have to pay an $800 fee each day. If the case involves a lot of work outside of the hearing days, there may be extra fees. If the arbitrator time exceeds 15 days x 10 hours, there is an additional fee of 10 percent of the arbitrator fees. If parties want CPR’s services for arbitrator selection, challenge, or replacement, or hearing room rental, they have to pay specific fees.

In Case A, for a $100,000 case, there is a $1,750 filing fee and a $8,250 administrative fee if the final award is delivered within 12 months after the prehearing conference. After that, there could be an additional fee of $2,000 for every six months.

In Case B, for a $5,000,100 case with a $200,000 counterclaim, there is a $1,750 filing fee and a $10,250 administrative fee. If the final award is delivered within 12 months after the pre-hearing conference, the total administrative fees are $12,000. After that, there could be an additional fee of $2,000 for every six months. If you and someone else have a big disagreement and want to solve it through arbitration, you have a few options. You can handle it ad hoc, which means you don’t use an arbitration organization and save money, or you can use the trial resolution judge procedure, which is like arbitration but with more rules and the right to appeal. If you do want to use an arbitration organization, it can cost different amounts depending on which one you choose. And when you make your initial claim, you have to say exactly what you’re asking for. And keep in mind, the arbitrators can make one party pay for all the costs. The rules for arbitration differ between organizations like AAA, JAMS, and CPR. These rules help make the arbitration process fair and efficient. When a dispute arises, the parties and their lawyers can choose which set of rules to follow, or even modify them. It’s important for contract drafters to be aware of these rules and consider which ones to include in the agreement to arbitrate. Larry R. Leiby is a highly experienced construction lawyer in Florida. He was one of the first to be board certified as a construction lawyer in the state. He has written extensively on construction law and is also involved in teaching and alternative dispute resolution. He is currently associated with Malka & Kravitz, P.A. as their legal advisor.

Source: https://www.floridabar.org/the-florida-bar-journal/what-does-it-cost-for-aaa-jams-or-cpr-to-administer-an-arbitration-case-and-how-do-the-initial-filings-vary/