Alternative fee agreements introduced
In-house counsel have been leveraging alternative fee arrangements (AFA) for years in order to manage the cost of external counsel. Now the AAA is introducing this concept to the world of arbitration - flat fees for arbitrator rates.
Under the new program, parties may opt for fixed or capped fee arrangements. The fixed fee option allows the parties and the arbitrator to set an overall fee for the case, divided into pre-hearing, hearing, and post-hearing pricing segments. In contrast, the capped fee option permits parties and the arbitrator to set a maximum fee for the arbitrator's rate across the entire process. Under this scheme, the arbitrator would bill the parties for her work until the cap was reached.
AAA provides an AFA Case Information Sheet to assist in deciphering the time and cost that should be allocated to stages of the arbitral process (e.g., projected time from arbitrator appointment to award, time for discovery, number of hearing dates, anticipated motions and form of award). AAA also provides a template agreement for parties and arbitrator to consider, which outlines the terms of their AFA.