§ 1.8.6.2 Arbitration Cost. The cost of arbitration?fees paid to an administering agency and fees paid to arbitrators?has always been a proper concern for employees. The United States Supreme Court provided some guidance on this issue in Green Tree Financial Corp. v. Randolph.48 In that case, the Court held arbitration costs may not be "prohibitively expensive" and that a party making this claim "bears the burden of showing the likelihood of incurring such costs."49 Regrettably, the Court provided no guidance on how lower courts were to determine when arbitration is prohibitively expensive or what evidence must be presented to make such a showing. Although the rule adopted by the Court applied to statutory claims and was derived from the Court's opinion in Gilmer (where the Court permitted the arbitration of statutory claims so long as arbitration provided an effective forum for the vindication of statutory rights),50 this rule has been extended to claims that an arbitration agreement is unconscionable.51 The alleged prohibitive cost of arbitration was been discussed by a number of Arizona state and federal cases, as well as in Ninth Circuit decisions.
Citing California law, the Ninth Circuit has held that a $75 filing fee in an employment arbitration was unconscionable because the employer's rules did not permit a waiver of that fee in the case of indigence, required the parties to share equally in the cost of arbitration, and potentially exposed the employee to pay all of the employer's arbitration costs subject to the discretion of the arbitrator.52 The Arizona Court of Appeals considered the issue of arbitration costs in a dispute between homeowners and a builder. In Harrington v. Pulte Home Corp.,53 the court held that the homeowners, who each had claims of between $500,000 and $1 million, did not meet their burden of proving that arbitration would be prohibitively expensive where they offered no specific facts regarding their financial condition and where their general allegations they could not afford even $1000 in costs were not credible given the scope and magnitude of the class arbitration they were undertaking. Furthermore, the court pointed out that the applicable arbitration rules permitted the administering agency's fees to be reduced in the case of hardship.
The issue of prohibitive arbitration costs was the subject of Clark v. Renaissance West, LLC,54 a decision of the Arizona Court of Appeals. In a medical negligence case, the plaintiff...
