Almost all consumer contracts contain arbitration clauses, mainly with the American Arbitration Association as the designated body trusted with the responsibility of processing the dispute. Under AAA rules the arbitration must be completed in 30 days with limited discovery, that is, at the discretion of the arbitrator. The usual cost to the consumer is about $400 for the complete arbitration.
The arbitration rules change on occasion and are required to comply with due process.
Consumer arbitration filed under the American Arbitration Association are significantly different than litigation that you will experience in the Superior Court in the State of New Jersey. Initially there are very specific consumer rules for arbitration, which have been promulgated by the American Arbitration Association. Most consumer claims fall under this “Expedited Consumer Rules.”
The first step is that the consumer should file a demand for arbitration. The demand for arbitration should go by regular and certified mail to the business and a copy should be sent to the American Arbitration Association. The charge for consumer arbitration is $375, which is the responsibility of the consumer. If the arbitration agreement does not require the consumer to pay a fee, the consumer can file an arbitration for no filing fees.
It is now the responsibility of the business to reply and usually the American Arbitration Association receives the complaint, opens the file, and notifies the business that they have approximately seven days to respond. The business is entitled to one seven-day extension to respond to the consumer complaint. They do not have to file an official answer but they do have to respond with the correspondence from them individually, or from a lawyer, that they were going to be proceeding forward in the arbitration. If the business fails to provide a response, they are notified by the American Arbitration Association that they are no longer welcome to arbitrate their claims in that forum. If they do file a response or notify the American Arbitration Association that they will be handling the claim, a hearing will be set up with the consumer, the business and their legal representatives to schedule any potential discovery and a hearing date.
The rules in consumer arbitration are not similar to the court rules applicable to New Jersey cases. In fact, there are very few rules applicable to arbitration with regard to the specific nature of the hearings. A major difference between arbitration and a court hearing is that the arbitration does not apply the rules of evidence. This is a significant difference or distinction between a court case and arbitration.
Most everything is left to the discretion of the arbitrator. To provide an example if everything was left to the discretion of the judge in a court case it would be the same as in arbitration. However, in the arbitration there is no appeal. There is no reconsideration. The case is over when the case is over. The American Arbitration Association has implemented some rights of appeal however they are very limited and they are extraordinarily expensive. Basically your appearance at the hearing and the presentation of evidence is the one chance you get to adequately pursue a claim.
The rules for arbitration differ since most of the procedure and process is based on the discretion of the arbitrator. You are not even guaranteed in person hearing however this should be the exception to the rule. Most arbitrations you do get an in person hearing with a written decision by the arbitrator if the case is not settled.
However, there is no requirement for written decision and in a consumer arbitration they only have to provide a yes or no as to a successful claim. This are the rules of the game. Unfortunately by the time any individuals figure out that they have signed an arbitration agreement it is too late. Fighting arbitration agreements is very difficult and can be very expensive. Consumer arbitration agreements are becoming a way of life. There is a consumer arbitration agreement and almost every single document you sign including your agreement to purchase a cell phone and obtain cable TV. These are but a few of numerous examples where the transactions contain arbitration agreements. Be very careful review any and all documents and if there is an arbitration agreement feel free to cross it out. However, under the circumstances it is unlikely that they will sell you the product.