Whether arbitration – resolution of a dispute by a private judge rather than in the public court system – increases or reduces access to justice is hotly debated. Samuel Estreicher, for instance, urges that “[a] properly designed arbitration system … can do a better job of delivering accessible justice for average claimants than a litigation-based approach.” Others, notably Jean Sternlight and David Schwartz, argue that arbitration increases costs and discourages lawyers from taking consumer cases, thereby reducing consumer access to justice but increasing corporate profits.

This chapter does not take sides in that debate. Instead, it seeks to advance the debate by presenting information on arbitrations involving disputes between consumers and businesses that are administered by the American Arbitration Association (AAA). During 2010–12, the AAA received over 7,000 consumer arbitration filings, and is commonly named in consumer arbitration clauses as the sole administrator or one of several administrators of consumer arbitrations. The types of businesses involved in AAA consumer arbitrations include credit card issuers and other consumer lenders, cell phone companies, car dealers, mobile home sellers, real estate brokers, home builders, insurance companies and extended warranty providers, and law and accounting firms, among others. AAA consumer arbitration has become a widely used process for resolving disputes between businesses and consumers, and this chapter seeks to provide a better understanding of how that process works.

AAA CONSUMER ARBITRATION PROCEDURES

As noted earlier, businesses commonly name the AAA as the arbitration administrator in their standard form contracts with consumers. The AAA, like other arbitration administrators, does not itself act as the arbitrator – that is, it does not itself issue a binding decision that resolves the parties’ dispute.