AAA Updates Discovery Rules

AAA Updates Discovery Rules

September 2013

The American Arbitration Association (“AAA”) has made substantive revisions to the AAA’s Commercial Arbitration Rules which are effective for any AAA-administered arbitration filed on or after October 1, 2013.  One important area of update is the discovery process. These new rules should make it easier for arbitrators to more closely control discovery and its related costs.

Previously, the exchange of information was covered in general terms under Rule 21, as follows:

“(a) At the request of any party or at the discretion of the arbitrator, consistent with the expedited nature of arbitration, the arbitrator may direct

i) the production of documents and other information, and

ii) the identification of any witnesses to be called.

(b) At least five business days prior to the hearing, the parties shall exchange copies of all exhibits they intend to submit at the hearing.

(c) The arbitrator is authorized to resolve any disputes concerning the exchange of information.”

The updated version is now separated into two parts, with Rule 22 addressing discovery and Rule 23 addressing enforcement and sanctions.  The expanded discovery instructions contained in Rule 22 now read:

R-22. Pre-Hearing Exchange and Production of Information

(a) Authority of arbitrator. The arbitrator shall manage any necessary exchange of information among the parties with a view to achieving an efficient and economical resolution of the dispute, while at the same time promoting equality of treatment and safeguarding each party’s opportunity to fairly present its claims and defenses.

(b) Documents. The arbitrator may, on application of a party or on the arbitrator’s own initiative:

i. require the parties to exchange documents in their possession or custody on which they intend to rely;

ii. require the parties to update their exchanges of the documents on which they intend to rely as such documents become known to them;

iii. require the parties, in response to reasonable document requests, to make available to the other party documents, in the responding party’s possession or custody, not otherwise readily available to the party seeking the documents, reasonably believed by the party seeking the documents to exist and to be relevant and material to the outcome of disputed issues; and

iv. require the parties, when documents to be exchanged or produced are maintained in electronic form, to make such documents available in the form most convenient and economical for the party in possession of such documents, unless the arbitrator determines that there is good cause for requiring the documents to be produced in a different form. The parties should attempt to agree in advance upon, and the arbitrator may determine, reasonable search parameters to balance the need for production of electronically stored documents relevant and material to the outcome of disputed issues against the cost of locating and producing them.”

This language now provides:

  • A stated objective of making discovery efficient, economical and equal, while allowing a fair presentation of claims and defenses
  • A requirement for ongoing production of documents relied upon
  • Categories of reasonable document requests
  • Default guidance as to the format of production

The general authority to resolve disputes contained in the former Rule 21 is now expanded into the current Rule 23, which defines enforcement powers of the arbitrator and the specific sanctions available for non-compliance:

R-23. Enforcement Powers of the Arbitrator

The arbitrator shall have the authority to issue any orders necessary to enforce the provisions of rules R-21 and R-22 and to otherwise achieve a fair, efficient and economical resolution of the case, including, without limitation:

(a) conditioning any exchange or production of confidential documents and information, and the admission of confidential evidence at the hearing, on appropriate orders to preserve such confidentiality;

(b) imposing reasonable search parameters for electronic and other documents if the parties are unable to agree;

(c) allocating costs of producing documentation, including electronically stored documentation;

(d) in the case of willful non-compliance with any order issued by the arbitrator, drawing adverse inferences, excluding evidence and other submissions, and/or making special allocations of costs or an interim award of costs arising from such non-compliance; and

(e) issuing any other enforcement orders which the arbitrator is empowered to issue under applicable law.”

Discovery disputes in arbitration often waste time and resources in what is intended to be an expedited process. These expanded rules should streamline the production, pre-empt or curtail at least some areas of common disagreement, and provide consistency to the process.

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