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Rule Changes Make Construction Arbitration a More Appealing Option

Tuesday, October, 6, 2015


Recent changes in arbitration rules will now make it an even more appealing option for resolving construction disputes.  The American Arbitration Association recently instituted the new rules under its Construction Industry Arbitration Rules.  Under the new rules, certain gaps and ambiguities in old rules are eliminated.  There are also additional tools now available to help arbitrators manage claims. 

 

Specific chances include:

 

  • A new rule imposing a time frame that is intended to reduce delays and costs
  • A rule requiring mediation in all cases with a claim exceeding $100,000, in an effort to facilitate faster resolutions
  • A rewriting of Rule 23 which now providers greater flexibility into the preliminary hearing and states the hearing will be held at “the discretion of the arbitrator”
  • A revision of Rule 24 that deals with the pre-hearing exchange of information, that now makes clear the arbitrator has the prerogative to impose discovery requirements on disputing parties
  • Revision of Rule 25 that now provides explicit enforcement mechanisms to issue orders necessary to enforce the changes to rules 23 and 24
  • A change in Rule 34 that now allows the arbitrator to entertain motions that would dispose of claims or narrow issues in a dispute
  • A change in Emergency Measures of Protection that allows a party to request an arbitrator on an emergency basis

 

This final change, applicable to Rule 39, is arguably the most significant change.  Emergency arbitrators will now be assigned within one business day of a request and will have the power to issue interim relief to disputing parties.  Many believe this final change will provide the most benefit in terms of cost savings.