{"id":3048,"date":"2014-07-14T06:53:21","date_gmt":"2014-07-14T12:53:21","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=3048"},"modified":"2014-06-24T15:55:53","modified_gmt":"2014-06-24T21:55:53","slug":"new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/","title":{"rendered":"New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes"},"content":{"rendered":"

Nicholas V. Fox, George E. Rahn, Jr. and Frederick D. Strober – June 19, 2014<\/p>\n

The American Arbitration Association (\u201cAAA\u201d) unveiled supplementary rules for construction proceedings that seek to remove some uncertainty from the resolution of construction disputes. \u00a0The new rules, which took effect on June 15, 2014, permit the parties to predetermine certain aspects affecting the cost and time necessary to resolve their construction dispute. \u00a0The parties may elect to place limits on the time within which the arbitration must be completed and the number of days to hold hearings. \u00a0Perhaps most important, the cost of the arbitration may now be capped in advance of the proceedings.<\/p>\n

Discussion<\/p>\n

On June 15, 2014, the AAA rolled out new supplementary rules for construction disputes. \u00a0The new rules, known as the \u201cSupplementary Rules for Fixed Time and Cost Construction Arbitration\u201d were promulgated with input from AAA\u2019s National Construction Dispute Resolution Committee \u2015 an advisory committee comprised of approximately 30 industry groups.<\/p>\n

Under the supplementary rules, the limits on cost and time are a function of the amount in controversy, with the time allowed and maximum fees corresponding to certain ranges of disputes. \u00a0If there are multiple claims, the amount of the larger of claim or counterclaim is used to determine the maximum length of the arbitration, the maximum number of days to be dedicated to hearing the case, and the maximum costs for arbitrator and AAA fees. \u00a0These factors are established by the several \u201cTime\/Cost Schedules\u201d embedded in the supplementary rules.<\/p>\n

For example, where the arbitration demand is for an amount between $500,000 and $1,000,000 the supplementary rules provide for a maximum of 270 days between filing the demand for arbitration and the arbitrator\u2019s issuance of an award. \u00a0Under this scenario, the hearing is limited to five days, and the arbitrator is limited to 20 hours or study time at a predetermined rate \u2015 $300 per hour. \u00a0The administrative fees paid to the AAA are similarly capped at $7,500.<\/p>\n

The limits on cost and time are a departure from the existing custom in the construction industry, whereby arbitrators establish their own hourly rates, and the length of the proceeding is often extended (sometimes unnecessarily) by one of the parties. \u00a0The new optional rules complement the existing AAA offerings available to construction litigants, which includes programs for Mediation, Regular Track, Fast Track, and Large-Complex cases.<\/p>\n

The industry acceptance of these optional rules is, of course, yet to be seen. \u00a0The decision whether to provide for the arbitration of disputes, and if so, under what terms, should always be carefully considered. \u00a0Parties should discuss the pros and cons of arbitrations with their legal counsel. \u00a0These new rules may provide yet another option for alternate dispute resolution under appropriate circumstances.<\/p>\n

via New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes | Saul Ewing LLP<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Nicholas V. Fox, George E. Rahn, Jr. and Frederick D. Strober – June 19, 2014 The American Arbitration Association (\u201cAAA\u201d) unveiled supplementary rules for construction proceedings that seek to remove some uncertainty from the resolution of construction disputes. \u00a0The new rules, which took effect on June 15, 2014, permit the parties to predetermine certain aspects… Continue reading New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41,14],"tags":[551,42,12],"class_list":["post-3048","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-construction-2","tag-american-arbitration-association","tag-arbitration-2","tag-construction","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nNew AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Nicholas V. 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Strober – June 19, 2014 The American Arbitration Association (\u201cAAA\u201d) unveiled supplementary rules for construction proceedings that seek to remove some uncertainty from the resolution of construction disputes. \u00a0The new rules, which took effect on June 15, 2014, permit the parties to predetermine certain aspects… Continue reading New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise & Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-07-14T12:53:21+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes\",\"datePublished\":\"2014-07-14T12:53:21+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\"},\"wordCount\":469,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"American Arbitration Association\",\"arbitration\",\"construction\"],\"articleSection\":[\"Arbitration\",\"Construction\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/new-aaa-construction-rules-offer-certainty-arbitration-construction-disputes\/\",\"name\":\"New AAA Construction Rules Offer Certainty to Arbitration of Construction Disputes - 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