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How Did I End Up in Small Claims Court? A Misapplication of the Consumer Rules

By Alexander Bachuwa

R-9. Small Claims Option for the Parties

If a party's claim is within the jurisdiction of a small claims court, either party may choose to take the claim to that court instead of arbitration as follows:

(b) After a case is filed with the AAA, but before the arbitrator is formally appointed to the case by the AAA, a party can send a written notice to the opposing party and the AAA that it wants the case decided by a small claims court. After receiving this notice, the AAA will administratively close the case.

I represent consumers in arbitration claims and encountered, what I believe, is a misapplication of the consumer rules. Specifically, I had a claim against a corporation where the amount in question was for a low dollar amount. I filed a claim with the AAA and the company utilized R-9(b) to move the matter to small claims.
On its face, this is an acceptable application of the rules. In reality, this strategy will deprive consumers the actual opportunity to seek relief. First, many small claims courts do not allow attorneys to participate in the proceeding. This leaves the consumer on his own to prosecute his claim, something that he will rarely do given the demands of the process versus the amount in controversy. If an attorney is allowed to participate in the proceeding, a consumer will be hard pressed to find a locally licensed attorney who would represent him in a low value claim. If this loophole is not closed, corporations will benefit tremendously as consumers, like my client, will forsake the claim and the money owed will remain with the company. While claims for $5, $10, or $100 may seem petty, the aggregate of these claims when multiplied by millions of aggrieved consumers is anything but.

Alexander Bachuwa has extensive international experience working abroad in China and Mongolia, focusing on alternative dispute resolution in the arena of corporate and commercial law. He has an MBA in Global Finance from Thunderbird School of Global Management, a JD from Arizona State University, and a BA in economics from University of Michigan. Alexander is licensed to practice in New York, Arizona, and is a Foreign Registered Attorney in Mongolia. He has also been admitted to all New York and Arizona federal courts. Alexander is conversational in Arabic, Spanish, and Mandarin.

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This page contains a single entry from the blog posted on February 11, 2017 11:33 AM.

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