Expedited Consumer Arbitration

Expedited Consumer Arbitration in the American Arbitration Association

It is well-known that a majority of dealerships, whether big or small, use standard arbitration agreements contained in all their contracts. Frequently, dealers who use arbitration agreements in various places and various documents such as a buyer’s order, a warranty, a retail installment sales contract or a generalized and completely separate consumer arbitration agreement.

Generally, the arbitration clauses permit a selection of various “neutral” entities to resolve the dispute. The three most frequently used arbitration forums are the National Arbitration Forum, American Arbitration Association and JAMS. It is now unlikely as a result of recent developments that anybody will be using the National Arbitration Forum to resolve these disputes. This will be subject to a later post. Both JAMS and the American Arbitration Association have specialized, expedited, consumer arbitrations for those who enter into a retail installment sales contract and wish to arbitrate a dispute against the dealer. Both the American Arbitration Association and JAMS have specific consumer due process protocols to assure that consumers get a “fair shot” in litigating their claims against the dealer.
Although the arbitration forums attempt to resolve these matters in a fair manner, it is understood that to reduce and costs and time associated with handling these matters, frequently, a potential litigant loses many discovery rights which are guaranteed in the court system. In the American Arbitration Association consumer expedited arbitrations, any and all discovery is at the discretion of the arbitrator. This means that an arbitrator might or might not permit interrogatories, a demand for documents or depositions. In my experience, they will not permit depositions in the ordinary course. On occasion, they do permit interrogatory questions to be propounded; however, they almost always permit an exchange of documents and exchange of witness names. The arbitrator and the expedited consumer rules do permit the issuance of subpoenas to permit the acquisition of various documents which might be somewhat difficult to obtain from the defendant. The American Arbitration Association frequently runs seminars or webinars pertaining to the appropriate methods by which to file both commercial and consumer arbitrations. The consumer always has the right to file an arbitration outside the expedited consumer rules. However, if this occurs, the commercial rules kick in and the filing fees are extensive. However, with commercial arbitrations, the discovery is significantly more customary, including depositions and interrogatories.

Rulings in Arbitrations. The American Arbitration Association consumer rules do not require reasoned awards. A reasoned award is one which the attorney or judge sitting on the case explains the ruling. And a non-reasoned award, which is customary in consumer expedited arbitrations, is simply an amount and a declaration of the liability. Sometimes it is less than this. Consumer arbitrations have some advantages and there are some disadvantages as well, and it is important to get an attorney who is an experienced litigator to handle such a matter.