New Rules to Stay Competitive
California Lawyer
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New Rules to Stay Competitive

December 2013

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Several arbitration companies have adopted new rules, most recently the American Arbitration Association, whose processes often serve as an industry standard that parties and arbitrators with other companies follow.

AAA's new rules, developed largely from client feedback, require parties to try mediation first. They also encourage streamlined preliminary hearings and more limited discovery, says Eric P. Tuchmann, AAA's general counsel. The rules govern disputes arising under contracts signed since October 1.

Client feedback also informed rule changes at competitor JAMS Inc., according to leaders there. Since 2010 JAMS has let parties choose to limit depositions and discovery and to speed dispute resolution in other ways.

Court cutbacks in California are part of what's pushing these changes in private arbitration. But leaders at Judicate West, a Los Angeles-based arbitration firm, say its new rules - adopted last April - address issues that had been brewing for a while.

"By five years ago, I had a number of clients, major corporations, saying they weren't going to do arbitration anymore because it's not any cheaper, and it's not any faster," says Gregory Lindstrom, who led the firm's update. Clients also wanted decisions based less on compromise and more on predictable principles, says Lindstrom, a former Irvine Co. general counsel who also practiced commercial law at Latham & Watkins for 30 years.

Judicate West says it now offers a guarantee of resolution in six months and opportunities to work less formally and by phone.

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