While many construction industry participants favor the finality of binding arbitration, some are put out by the inability to appeal an unfavorable award (see my previous blog post for more on the limited bases for challenging arbitration awards in court).
The American Arbitration Association® (“AAA”) has announced a new set of rules intended to bridge that gap. As of November 1, 2013, the AAA has made available for use its “Optional Appellate Arbitration Rules,” the purpose of which was articulated by AAA in its press release:
The objective of arbitration is a fair, fast and expert result that is achieved economically. Consistent with this goal, an arbitration award traditionally will be set aside by a court only where narrowly defined statutory grounds exist. Sometimes, however, the parties may desire a more comprehensive appeal of an arbitration award within the arbitral process. … In order to provide for an easier, more standardized [appellate] process, the AAA has developed these Optional Appellate Rules.
I greeted news of the Appellate Rules with much curiosity and, truth be told, a fair amount of skepticism: how could AAA marry up a meaningful appellate process with the streamlined nature of arbitration? And so before reviewing the new rules, I jotted down a list of questions I hoped they would address. Those questions, and what I discovered upon reviewing the rules, follow: