
Joel N. Kreizman
Partner
732-568-8363 jkreizman@sh-law.comFirm Insights
Author: Joel N. Kreizman
Date: September 19, 2014
Partner
732-568-8363 jkreizman@sh-law.comThe American Arbitration Association’s (AAA) new Consumer Arbitration Rules took effect on September 1, 2014. New York and New Jersey businesses that include clauses in their consumer contracts providing for AAA administration should be aware that there are a number of key changes, including the requirement to register all agreements in a newly created online database.
The AAA defines a consumer agreement as “an agreement between an individual consumer and a business where the business has a standardized, systematic application of arbitration clauses with customers and where the terms and conditions of the purchase of standardized, consumable goods or services are non-negotiable or primarily non-negotiable in most or all of its terms, conditions, features, or choices.” The product or service must be for personal or household use. Common examples include credit card agreements, automobile leases, cell phone contracts, and fitness club membership agreements.
The new rules apply specifically to consumer contracts and replace the AAA’s Consumer-Related Disputes Supplementary Procedures, which were previously used in conjunction with the Commercial Rules. The 55 new rules spell out the procedures in much greater detail, including hearing procedures, timelines, and resolution of disputes by documents.
The most significant change under the new rules is the creation of Consumer Clause Registry. According to the AAA, the online database “was created to provide more access to information about the AAA’s consumer arbitration services” and will “contain a list of businesses that have submitted their consumer arbitration clauses with the AAA and where upon review the AAA has determined that the clause substantially and materially complies with the due process standards of the Consumer Due Process Protocol.”
Under the new rules, the AAA will only accept a case for arbitration if the clause is first reviewed and approved by AAA. Rule 12 specifically states that any business that “provides for or intends to provide for” AAA administration in a consumer contract “should notify the AAA of the existence of such a consumer contract or of its intention to do so at least 30 days before the planned effective date of the contract.” If a business has not registered its consumer clause prior to the filing of a consumer case, the AAA will require that the business register its clause at that time and will conduct an expedited review.
Businesses will also incur new fees under the amended consumer rules. The AAA will charge a non-refundable $500 annual fee to conduct the review and maintain the Registry. For this year, however, a $650 fee will maintain the business in the Registry through 2015. Companies who do not submit their arbitration agreements until a case is filed will also incur an additional $250 fee for expedited review.
If you have any questions about the AAA’s new consumer rules or would like to discuss how they may impact your business, please contact me or the Scarinci Hollenbeck attorney with whom you work.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, like all M&A transactions, it is important to understand the legal nuances and proper due diligence in mergers and acquisitions. What Is a Short Form […]
Author: Dan Brecher
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!