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American Arbitration Association updates construction industry rules and mediation procedures 

5/8/24

By: David A. Slocum

For the first time in nearly a decade, the American Arbitration Association (“AAA”) recently issued a revised version of the Construction Industry Rules and Mediation Procedures (the “Rules”) applicable to construction industry disputes proceeding before the AAA. The recent amendments to the Rules, which went into effect on March 1, 2024, were developed with input from various construction industry stakeholders around the country. In a press release concerning the newly revised Rules, the AAA advised that the intent behind the updated Rules is to promote efficiency, clarity, modern technology adoption, and to meet the evolving needs of the construction industry.    

A link to the AAA’s Summary of Changes for the Construction Industry Rules is included below. A few notable changes in the updated Rules include the following: 

Regular Track Procedures:   

Availability of Videoconferencing: Under the new Rules, preliminary hearings may now be held by videoconferencing as well as by telephone or in person.  

Confidentiality: Under the new Rules, the AAA and arbitrators are now expressly required to keep all matters proceeding before the AAA confidential, and arbitrators now have the specific authority to issue confidentiality orders.  

Consolidation and Joinder: The Rules concerning consolidation and joinder have been amended in multiple respects including that any requests for consolidation or joinder of additional parties now must be filed before appointment of the Merits Arbitrator for the matter (as opposed to the prior 90-days after filing time period), and adoption of a new 14-day window for responses to such requests.  

Dispositive Motions: Under the new Rules, arbitrators are now required to consider the cost of a dispositive motion in connection with determining whether leave for a party to file such a motion will be allowed.  

Modification of Awards: Under the new Rules, arbitrators now have the authority to “clarify” their awards. The Rules previously allowed only for correction of clerical, typographical, technical, or computational errors. As previously, the new Rules do not permit reconsideration of the merits of an award.   

Fast-Track Procedures:   

Applicability: Under the new Rules, the ceiling for fast-track procedures has been raised to include any matter in which no disclosed claim or counterclaim exceeds $150,000. Prior to this amendment, the amount was $100,000. 

Form of Award: Under the new Rules, awards in fast-track matters will be a standard form award. Parties are permitted to request a more detailed award, but such request may result in the matter being transferred out of the fast-track procedures.  

Procedures for Large, Complex, Construction Disputes: 

Appointment of three-arbitrator panel: The threshold amount for appointment of a three-arbitrator panel has been raised from $1 million to $3 million.  

Understanding the impact of these newly revised Rules on the dispute resolution methods available to parties in the construction industry is important not only in the event a dispute arises, but also at the time of contract formation when dispute resolution methods typically are selected. As such, it is important to consult with experienced legal counsel when negotiating your construction contracts.    

AAA’s Summary of Changes for the Construction Industry Rules: https://go.adr.org/rs/294-SFS-516/images/Rules_Summary%20of%20Changes_2024.pdf?version=0  

For more information, please contact David A. Slocum at dslocum@fmglaw.com or your local FMG attorney.