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Congress just passed a bill to allow terminated auto dealers to arbitrate their termination under an expedited procedure. The procedure highlights the issue of faster, cheaper, that I've been discussing.
As part of H.R. 3288, Congress set up a special procedure for auto dealers terminated by Chrysler and General Motors. By January 15, 2010, Chrysler and GM must provide the dealers with the criteria used to terminate them. The dealer then has until January 25 to decide whether to arbitrate the decision. Appeals are handled by the AAA in the dealer's state, and each party is responsible for its costs and fees. Only limited document discovery is allowed. All arbitrations must be completed by June14, 2010, which can be extended for 30 days for good cause. The arbitrator's decision will rest on specified business/economic criteria, and the arbitrator will need to balance the economic interests of the dealer, manufacturer, and the public at large.
The AAA responded promptly to the legislation and sent out a request to panel members to invite participation, explicitly advising of the time limits and probably significant fee limitations. I'm on the panel and responded that I'd volunteer, and the AAA recently notified us that many arbitrators volunteered.
Since I am a panel member, I won't discuss the specific law itself. The point that interests me, though, is that this is an example of what I've termed faster, cheaper, fairer, better dispute resolution. It limits the time and cost of arbitration, and businesses end up taking more litigation risk than they would in a normal proceeding with full discovery, longer deadlines, briefing, etc.
One big difference here from what I've been discussing is that Congress has provided the standards for the arbitrator's decision. But that element is in many ways irrelevant to the faster, cheaper aspects of the procedure. In many franchise disputes, the significant issues are factual and the legal secondary. Regardless, the statute shows that if the initiative is taken, whether by act of Congress or simply by some franchisors starting to use a faster, cheaper dispute resolution clause, the system will respond. My hunch is that the business community will begin demanding this type of faster, cheaper procedure for resolving many more types of business disputes.
This is part 3 of a blog that starts here.
About the Author: Peter Silverman is a franchise lawyer, mediator and arbitrator. You can reach him at firstname.lastname@example.org. Read his biography page. Any thoughts he offers on Blue Mau-Mau are his personal opinion and are not legal advice.