BBB Rules of Binding Arbitration for the Direct Marketing Association
The Better Business Bureauģ (BBB) is a nonprofit organization supported by local businesses. The BBB promotes trust in the marketplace by fostering ethical business practices.
Your BBB assists in the resolution of marketplace disputes. BBBs have a national reputation for fairness because they remain neutral in a dispute. They do not take sides but work to get the problem settled as quickly as possible.
The BBB has partnered with the Direct Marketing Association (DMA) to develop a process to resolve marketplace disputes involving DMA members through mediation and/or arbitration, as the parties may choose.
What is Mediation?
In mediation, BBB will provide a professionally-trained mediator to confer with the parties and guide them in working out their own mutually-agreeable solutions. To make the process readily accessible, mediation of disputes involving DMA members is conducted by telephone. If the parties reach a mutually acceptable resolution, the mediator or BBB staff will put the agreement into written form and send the agreement to both parties. If the process does not resolve the dispute, or if the parties choose not to participate in mediation, BBB will administer an arbitration hearing in accordance with these Rules.
What is arbitration?
Arbitration is an informal process in which two parties present their views of a dispute to a neutral third party, an arbitrator, who will decide how to resolve the dispute. The BBB provides a professionally trained arbitrator who will listen to both sides, weigh the evidence and make a decision about the dispute. This decision will be binding on both parties.
The BBB may arbitrate disputes involving DMA members within the limits defined in these Rules. The parties to a particular dispute may expand the arbitratorís authority beyond the limits defined in these Rules by mutual consent. The issues and the types of awards that the arbitrator may consider in your case will be outlined in a document called the Agreement to Arbitrate. The BBB will work with you to write the Agreement to Arbitrate so it is based on the facts of your case. Prior to the arbitration, BBB staff will request copies of all documents each party will present at the arbitration hearing, so this information can be shared with the other party and reviewed by the arbitrator. All documentation and the signed Agreement to Arbitrate will be sent to the parties at least 10 days in advance of the hearing. The arbitrator will be asked to make a decision that he or she believes is fair based on the facts of your case.
Who is the arbitrator?
BBB maintains a panel of professionally trained arbitrators to resolve disputes involving DMA members. Arbitrators do not necessarily have specific expertise in the matter to be arbitrated, but can call upon the assistance of an expert when necessary. The technical experts used in the program will be jointly identified by BBB and DMA. Arbitrators pledge to make an impartial decision, and do not have any affiliation with either party in the dispute.
The arbitration hearing
The BBB will consult with the parties and the arbitrator(s) in scheduling an arbitration hearing. While most cases require only a single hearing, additional hearings may be scheduled if the arbitrator deems it necessary.
Do I need an attorney?
BBB arbitration is designed to permit parties to participate without the need for legal representation. You may want to consult with an attorney about the remedies that may be awarded in BBB arbitration before deciding to use the process to resolve your dispute. Parties may also decide to have an attorney represent their case in the arbitration hearing.
How to prepare for arbitration
Before your arbitration hearing, you should prepare an outline of your argument to help you in your presentation. You may want to use the checklist at the end of this section to assist you in your preparation.
Also before the hearing, you should prepare a list of questions you want to ask the other party.
What will happen at the hearing?
You will have an opportunity to state the facts as you see them. Each party also will have the opportunity to ask questions of the other party.
The arbitrator may also ask questions to clear up uncertain areas and to gain a fuller understanding of the dispute.
After each side has presented its case and the questioning is completed, you should be prepared to give a summary of your position. Deal with any questions that have not been answered and tell the arbitrator exactly what you think the decision should be and why.
Remember that the sole purpose of the hearing is to allow the arbitrator to gather and sort the facts in order to make a fair decision. You should be prepared to convince the arbitrator that your position is right and that it supports the remedies/outcome you seek from the arbitration process.
A cooperative approach works best. You are there because a disagreement exists, but keep that disagreement factual and within the bounds of normal courtesy and conventional language. Arbitrators may not have industry specific expertise, so your presentation may be more productive if you provide facts and documentation from authoritative and impartial experts supporting key points in your presentation.
An arbitration checklist
- Organize your materials in the order you wish to present them. This will help you present your case clearly and logically.
- Clearly state what the problem is, what are the relevant facts, and why these facts should convince the arbitrator to agree with your position.
- List in chronological order the actions you took to resolve the dispute, including:
Collect and present all available written information relating to your dispute. You will be asked to supply copies of all original documents. Documents that might be useful include:
- individuals with whom you spoke;
- when you spoke with them;
- what they told you and/or what actions they took;
- other business/service persons involved:
- Who were they?
- When did they get involved?
- How did they become involved?
- What did they tell you and/or what actions did they take? Written statements or the presence of witnesses can help substantiate the facts of your case.
List any witnesses who may have information about your dispute. Try to contact them and ask them to testify or to submit written statements. You are responsible for your witnessesí submission of information. If you want them to testify, keep them informed about the time of the hearing.
- Purchase order, contract or other agreement.
- Any relevant warranty or written representation.
- Correspondence between you and the other party.
- Other documents which may support your case, e.g., applicable industry standards, court decisions and legal documents, and technical information.
The arbitrator will accept all relevant evidence presented at the hearing. The arbitrator will decide the importance of each piece of evidence after the hearing is closed. It is better to be over prepared than under prepared.
Evidence will not be accepted after the hearing if it was possible to present that evidence at the hearing, or if the arbitrator has already rendered a decision.
- Organize your case.
- Back up your position with evidence.
- A clear, concise and well-organized presentation supported by relevant facts and good documentation will help the arbitrator fulfill his or her responsibility.
BBB Rules of Binding Arbitration for the Direct Marketing Association
The following list defines key words as they are used in these Rules.
- Arbitration is a process in which two or more parties agree to let an impartial person decide their dispute.
- Arbitrator refers to the individual selected to conduct your arbitration and make a decision in your dispute.
- BBB refers to the Better Business Bureau that is administering the arbitration.
- Days refers to calendar days.
- Decision refers to the written document signed by the arbitrator and mailed to the parties.
- Parties refers to the businesses agreeing to resolve their dispute under these Rules by signing an Agreement to Arbitrate.
- Shall is mandatory; may is discretionary.
- You refers to one of the parties involved in the dispute being arbitrated.
SCOPE OF BBB ARBITRATION
Disputes alleging a deficiency or problem in a product and/or service involved in the transaction between the parties may be arbitrated under these Rules, as long as the parties agree to arbitrate the dispute after it arises. If an agreement between the parties is signed before the dispute arises and requires that both parties arbitrate dispute through the BBB or under any BBB binding arbitration rules, then any arbitration under that agreement will be conducted using the BBB Rules of Binding Arbitration for Disputes Subject to Pre-Dispute Binding Arbitration Clauses.
The following claims shall not be considered unless specifically agreed in writing by all parties that the arbitrator may consider them:
- Claims seeking criminal penalties;
- Claims seeking compensation for damages or injuries caused by a defective product;
- Claims for personal injuries;
- Claims where no deficiency or problem is alleged in the product or services involved in the transaction;
- Claims that are the subject of a lawsuit filed by the either party or that have been resolved by a previous court action, arbitration or settlement between the parties.
The decision as to whether your dispute (or any part of it) can be arbitrated rests solely with the BBB or the arbitrator. (See Rule 31.)
The following remedies may be awarded in an arbitration proceeding: a) release of contractual obligations between the parties; b) full or partial refund of the cost of the product and/or service involved in the transaction, including sales tax and other direct incidental costs associated with the sale of the product or service; c) return of the product (if a full or partial refund is awarded); d) completion of promised work or fulfillment of contractual obligations; and/or e) the amount of any actual out of pocket loss or damages, not to exceed $50,000, caused by the deficiency in the product or service.
Additional remedies may be awarded in an arbitration proceeding only if the parties agree in writing that the arbitrator may award the specific remedy.
The following may not be awarded in BBB arbitration unless it is specifically agreed by all parties that the arbitrator may award them: compensation for mental anguish, punitive damages or legal fees.
AGREEMENT TO ARBITRATE
To initiate the arbitration process, the parties shall submit to the BBB a brief description of the nature of the dispute and the relief sought in arbitration. The BBB shall prepare an Agreement to Arbitrate that briefly describes the partiesí positions and the decision sought.
The Agreement to Arbitrate is intended to be a general outline of the dispute, not an argument of your case. You should contact the BBB at once if you disagree with the general description of your case and/or the decision you are seeking.
The Agreement to Arbitrate shall include only those claims that fall within the scope of these Rules, unless both parties agree to arbitrate additional claims in your case.
The BBB shall provide the Agreement to Arbitrate to each party prior to the hearing. Each party shall sign the Agreement to Arbitrate and return it to the BBB within five days of receiving it. Failure to mail the signed Agreement within this time period may result in a delay of the resolution of your case.
Parties should not contact the BBB if they think the description of the other partyís case is in error; that is an issue for the arbitrator to decide.
SELECTING YOUR ARBITRATOR
The BBB shall select the arbitrator in a procedure designed to avoid any conflict of interest and to provide the parties with a neutral arbitrator to hear their case.
The BBB maintains a pool of qualified, experienced arbitrators, from which the BBB shall select the arbitrator who will decide your dispute. The BBB shall inform the arbitrator(s) of the identities of the parties and attorneys, if any. If an arbitrator finds that he or she has a conflict of interest with any party or attorney, the arbitrator(s) shall recuse himself or herself.
The BBB may use variations of this selection process, provided that the alternative procedure shall also result in the appointment of a neutral arbitrator.
QUALIFYING THE ARBITRATOR
The arbitrator shall sign an oath pledging to make an impartial decision in your dispute. If the arbitrator believes that he or she cannot make an impartial decision, the arbitrator shall refuse to serve.
If a financial, competitive, professional, family or social relationship exists between the arbitrator and one of the parties (even if the arbitrator believes the relationship is so minor as to have no effect on the decision), it shall be revealed to all parties and you may decide that this arbitrator should not serve in your case.
The BBB reserves the right to reject any arbitrator for any reason that it believes will affect the credibility of the arbitration process.
COMMUNICATING WITH THE ARBITRATOR
You or anyone representing you shall not communicate in any way with the arbitrator about your dispute except: a) at a hearing for which the other party has received notice but does not appear, or b) when all other parties are present or have given their written permission.
All other communication with the arbitrator must be sent through the BBB.
Violation of this rule may result in your case being discontinued.
You may present your own case or have someone represent you.
If your representative is a lawyer, you must give the lawyerís name and address to the BBB at least eight days before the hearing. The BBB shall notify the other parties to give them an opportunity to obtain lawyers if they want. Your failure to give the BBB advance notice of legal representation may result in a rescheduling of your hearing.
You are responsible for any fees charged by your representative.
PRE-HEARING EXCHANGE OF INFORMATION
The arbitrator, at his or her discretion, may direct that the parties exchange documents or other information prior to the hearing. A copy of any such documents or information shall also be sent to the BBB.
The BBB shall set a date and time (during normal business hours) for your arbitration hearing. The hearing shall be set with due regard for the schedule of the parties and the arbitrator. Notice of the date and time of the hearing shall be sent to you at least 10 days in advance of the hearing.
Contact the BBB immediately if you object to the date and time stated in your notice. If an unforeseen emergency arises that prevents you from attending a hearing, call the BBB before the scheduled hearing time.
The BBB reserves the right to make the final decision as to the date and time for the arbitration hearing.
MANNER IN WHICH HEARING IS CONDUCTED
Arbitrations will involve telephone hearings to permit the parties to participate from various locations throughout the country. However, if all parties and the BBB agree, the BBB may arrange to have your hearing conducted in person.
YOUR ABSENCE FROM THE HEARING
If one party does not attend a hearing after receiving proper notice from the BBB, the arbitrator shall proceed with the hearing and receive evidence from the other party.
One partyís absence will not result in an automatic decision against that party. The party who did not attend the hearing shall be given an opportunity to present its position in writing within time limits set by the BBB. If that party does not submit its position within the specified time limits, the arbitrator shall make a decision without that partyís position.
ATTENDANCE AT HEARINGS
BBB staff may attend the hearing in an administrative capacity.
The parties, any representatives, and their witnesses may attend the hearing, although the arbitrator may determine that one or more witnesses should not be present by telephone or in person while others are giving testimony.
For any observer to attend a hearing, the BBB will first determine that reasonable accommodations exist and then make sure that the parties and the arbitrator have no objection to the presence of an observer. If there are no objections, the observer shall be permitted to attend the hearing subject to the BBBís directions regarding proper conduct.
CAMERAS AND RECORDING DEVICES
Unless there is approval of all parties and the arbitrator, no one is permitted to bring or use cameras, lights, recording devices or any other equipment during the hearing. However, the BBB may make an audio recording of the hearing if requested by the arbitrator, and any such audio recording may only be used by the arbitrator for the sole purpose of assisting the arbitrator in writing his/her decision and reasons.
OATH OF PARTICIPANTS
You and your witnesses shall be placed under oath at the hearing by the arbitrator or BBB staff administering your hearing.
The arbitrator will decide on the order and the procedures to follow for you to present your side of the dispute.
You shall be given an opportunity to make a personal presentation of your case, and you may present witnesses and evidence in support of your case. You shall also be given the opportunity to question the other parties, their witnesses and their evidence. After everyone has presented his or her case, each party shall be given the opportunity to make a closing statement.
If the arbitrator determines that additional information is necessary in order to make a fair decision, the arbitrator may direct that this additional evidence be submitted at a subsequent hearing or in any manner deemed appropriate by the arbitrator. If the arbitrator directs that written evidence be submitted after the initial hearing, the evidence shall be sent to the BBB within the time frame specified by the arbitrator. The BBB shall send a copy to the other party and solicit a response. Both the written evidence and any response shall be submitted by the BBB to the arbitrator.
ADMISSION OF EVIDENCE AT THE HEARING
You may present your case without being restricted by courtroom rules of evidence. However, you should be sure your evidence is relevant to your case.
The arbitrator may limit your presentation if it is repetitious or irrelevant.
At the request of the arbitrator, the BBB shall make reasonable efforts to obtain a volunteer impartial technical expert to evaluate the product or service involved in the dispute. The BBB may obtain the assistance of DMA to locate an expert with knowledge and experience relevant to the dispute.
The expertís findings shall be presented in writing or by telephone, at the BBBís option, either before, during or after the hearing. In any case, you shall have an opportunity to evaluate and comment on the qualifications and findings of the expert.
You also have the right to have your own technical expert serve as a witness at your own expense.
If you have a witness who cannot attend the hearing, you may present that personís written statement to the arbitrator. You must make a copy for the other party to read and use for response.
You must provide copies of all written documents on which you will rely to the BBB at least 10 days before the hearing so the BBB may make copies available to the other party and the arbitrator.
ADMISSION OF EVIDENCE AFTER INITIAL HEARING
During the hearing, you may ask the arbitrator to give you a reasonable number of days to respond to evidence presented by the other party at the hearing. The arbitrator may grant your request at his or her discretion.
Before a decision is made, an arbitrator may schedule new or additional hearings or otherwise request new or additional evidence to get all possible facts relating to your dispute.
Before a decision is made, you may send the BBB new information that was impossible to present at your original hearing and request that it be considered. The BBB shall send it to the other parties for their response and then forward the information and any response to the arbitrator.
After the arbitrator has made a decision in your case, no more arguments or evidence may be presented, even if newly discovered or not available at the time of the hearing.
CLOSING THE HEARING
The arbitrator shall close the hearing when he or she determines that the parties have had sufficient opportunity to present all relevant evidence. The arbitrator will normally render a decision within five days after the hearing is closed.
If all parties voluntarily decide to settle the dispute before the hearing, the settlement will end the dispute and no hearing will be held.
If a voluntary settlement is reached during the hearing, the arbitrator shall include the settlement in a consent decision. If a settlement is reached after the hearing but before the arbitratorís decision is issued, be sure to notify the BBB at once.
The BBB shall make every effort to obtain a final resolution of your complaint within 60 days from the date the signed Agreement to Arbitrate is received from both parties. The BBB may extend this time at its discretion.
When the arbitrator has reached a decision in your case, the BBB shall send to all parties a written decision accompanied by the arbitratorís brief statement of reasons for the decision. The BBB will not read a decision to you over the phone.
- Scope of decision
A decision shall be one that:
- the arbitrator considers fair;
- falls within the scope of these Rules and your Agreement to Arbitrate.
Unless otherwise provided by agreement of the parties, the arbitrator is not bound to apply legal principles in reaching what the arbitrator considers to be a fair resolution of the dispute.
The decision may order an action to be performed, money to be paid or a combination of these remedies. The arbitrator may award all or part of what you seek or may decide to award no payment or performance at all.
Clarifying the decision
You may request that the arbitrator clarify a decision if you do not understand the decision, or if you and the other parties disagree about the specific action required by the decision. Requests for clarification must be sent in writing and must be received by the BBB prior to the time that performance is required under the decision.
The BBB will not accept a clarification request that attempts only to reargue your case or that is based solely upon your disagreement or disappointment with the decision.
If your written statement to the BBB is an appropriate request for clarification of the decision, the BBB shall send the request to the other parties, solicit their views, and send the request and any response to the arbitrator. The arbitrator may either clarify the decision or reject the request for clarification and let the decision stand as written.
You may not ask the arbitrator to clarify the reasons for decision.
Correcting the decision or reasons for decision
You may request correction of the decision or the reasons for decision if you believe the decision or reasons contain a mistake of fact, a miscalculation of figures, or exceed the arbitratorís authority. Requests for correction of a decision or reasons must be in writing and received by the BBB prior to the time that performance is required under the decision.
A mistake of fact is not a conclusion of the arbitrator with which you disagree; it is a true error in such things as a date, time, place or name, and may justify a correction only if it concerns the essence of the decision.
A miscalculation of figures is not a dollar figure you consider to be unfair; it is a mathematical error.
The arbitratorís authority is limited to the scope of these Rules and the Agreement to Arbitrate.
The BBB will not accept a correction request that attempts only to reargue your case or that is based solely upon your disagreement or disappointment with the decision.
If your written statement to the BBB is an appropriate request for correction, the BBB shall send the request to the other parties, solicit their views, and send the request and any response to the arbitrator. The arbitrator may either correct the decision or reasons or reject the request for correction and let the decision or reasons stand as written.
Decision is impossible to perform or to perform timely
If you believe you cannot perform the arbitratorís decision within the established time limit or at all, you should immediately inform the BBB in writing. The BBB will process your submission in the same manner as a request for correction.
The arbitrator may request additional evidence, request another hearing or do anything necessary to confirm or deny your claim of impossibility of performance. If the arbitrator confirms such impossibility, the original decision may then be changed to include any remedy falling within the scope of these Rules and your Agreement to Arbitrate.
Suspending the time to perform
If you submit to the BBB a written statement relating to correction, clarification, or impossibility of performing the decision, the time for performance of a decision shall be suspended until the issue is resolved by the arbitrator or by the BBB.
After decision is issued
Once a decision in your case has been issued:
- The parties will be legally bound to abide by the decision and must comply with the decisionís terms (subject to clarification/correction under these Rules or to any limited right of review that may be provided by state or federal law).
- Each party gives up any right to sue the other party in court on any claim that has been resolved at the arbitration hearing, unless a party fails to perform according to the arbitratorís decision.
If a party fails to perform the decision, you may have the right to enforce the decision in court or pursue other legal remedies under state or federal law.
Any failure to follow these Rules that may significantly affect the independence, impartiality, or fairness of the arbitration process must be raised with the BBB at the earliest opportunity. The BBB shall make a final decision on the appropriate action to be taken if the BBB determines that a failure to follow these Rules has significantly affected the independence, impartiality, or fairness of the arbitration process.
CHANGE OF TIME
You and the other parties to the arbitration may jointly agree in writing to change any period of time stated in these Rules.
The dispute resolution process, and any records of that process, are private and confidential.
BBB may share the results of your individual case with DMA for consideration in its ethics review process. Otherwise, BBB shall not release the results of your individual case to any person or group that is not a party to the arbitration unless all parties agree or unless such release is required by law or pertinent to judicial or governmental administrative proceedings.
JUDICIAL PROCEEDINGS/EXCLUSION OF LIABILITY
In submitting to arbitration under these Rules, the parties agree that the DMA (including its staff), BBB (including its staff), Council of Better Business Bureaus (including its staff), and/or the arbitrator shall not be subpoenaed by either party in any subsequent legal proceeding and shall not be liable for any act or omission in connection with your arbitration.
INTERPRETATION OF RULES/RIGHT TO DISCONTINUE ARBITRATION
The BBB or the arbitrator shall make the final decision on procedural questions, on the scope of the agreements, on a claimís eligibility for arbitration, and on any other question concerning the application and interpretation of these Rules.
The BBB at all times reserves the right to decline or discontinue administration of arbitration for any case(s) due to a conflict with any BBB Policy or state/federal law or regulation, or due to the conduct of a party.
© 2008 by the Council of Better Business Bureaus, Inc., Arlington, VA