A recent change to the American Arbitration Association rules has eliminated a roadblock that has plagued arbitration proceedings. With new powers and the ability to be creative in managing the process, arbitrators can now move forward to resolution where they have sometimes been stymied in the past.
Before new Commercial Arbitration Rule 57 went to effect late last year (Rule 56 for construction cases), if one party didn’t stay current with its fees and the opposing party wouldn’t advance those sums, the procedure could only be suspended or terminated. The arbitrator didn’t know which side had failed to deposit funds with the case manager, so that he or she would not be prejudiced consciously or subconsciously against the nonpaying party.
