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Florida’s Revised Arbitration Code: Better Review Today!

February 27, 2015

In Florida, with six active appellate courts creating case-law and a legislature annually generating new statutory law, it is the wise lawyer who strives to keep up with changes in the law.

Recently, in reviewing an arbitration agreement to consider accepting service as an Arbitrator, I was struck by some language I had not seen before.  I alerted the requesting attorney for his greater caution, but as it is common to have almost no routine wording (or structure) in many such critical contractual agreements’ sub-sections, I merely personally filed it away to consider the “odd” language in-depth another day.

That “another day” came this  week, when, much to my surprise, I  confronted  my first actual close review of the “Revised Florida Arbitration Code”!  See, Chapter 682, FL. Statues (2014)

Embarrassingly, and under my radar (and, I now am involved in far more arbitration than I was as only a civil litigator), after nearly 50 years of the older Code version, in 2013, the Florida Legislature passed significant (dramatic) statutory changes to the law of Arbitration in Florida.

What a shock!

If you do any work that involves any Arbitration, and if you haven’t already, I strongly suggest you take the time, now, to carefully review and cautiously consider  this “new” Code.

I call it “new” not only because it became effective to all agreements to arbitrate made on or after July 1, 2013, but because it contains numerous important changes that must be considered as new (dare I say revolutionary) to arbitration!

As usual, the Revised Code contains many provisions that should at least give pause to those who perhaps have not fully considered the impact any number of the changes COULD have.

And, I suggest, if your practice is sensitive to fee shifting, such as is common in personal injury litigation, stop and go read it now!  (And, if Nursing Home work is in your inventory, run to your review.)

(If you can’t find time to do your own complete comparison, one helpful start to the large and important changes would be to Google an excellent related synopsis  article by Jose M. Ferrer,  “Florida’s Arbitration Code Comes of Age”. )

As Mr. Ferrer points  out, the new Code now provides for non-traditional forms of Arbitration Agreements, i.e. contract by emails, the power of early injunctive relief, the power of the summary judgment and even consolidation of similar claims.  (Sound a lot like Circuit Court?  It is supposed to!)

But what should be startling to all sides in any arbitration is that “now”*, among other important new powers, the code permits an arbitrator to award attorneys fees (and “other expenses of arbitration”) if such an award is authorized by law in a civil action involving the same claim or by the agreement of the parties to the arbitration proceeding”.

This was precisely the new “fee shifting” language I had earlier noted recently (clearly a post-2013 Agreement) and cautioned about; wouldn’t such language in that “agreement” open the door for prevailing party awards?  At the least, in my opinion, it opens the door for the use of Florida’s proposal for settlement.

(*Now means:  “By agreement (thus beware?) OR depending upon the law at the time of the Agreement.  Otherwise, the new statute does not apply to any arbitration that commenced or any right that accrued before July 1, 2013.  However, commencing July 1, 2016, all arbitration agreements, regardless of their dated, will be governed by the Revised Code.)

( And, the really troubling language in the agreement I reviewed was that the “carrot” for signing the binding arbitration agreement was that it was to be fully paid for, i.e. a “free”  hearing to the signer, if elected.  However, a more careful reading referred to the “possible” ability of the arbitrator to award fees and costs “under some circumstances”  Does “misleading” come to mind to anyone else?)

Although the prevailing party issue may have always been a prior concern depending upon the language of the full contract in which the Arbitration Agreement is often found as a sub-section, all of the positives and negatives of the use of proposals for settlement have not been before available.

There is more.

The Revised code also now allows arbitrators to award punitive damages to the same extent they would be available in a civil action.  More to think about in your arbitrator selection!  See, Mediators as Arbitrators?, August 1, 2013

Clearly these changes elevate the Arbitrators’ powers much more closely to that of elected judges!  (Some suggest even higher!)

Thus, for those of you who only occasionally see arbitration being used in your practice, a word of warning. As I have noted in past articles, arbitration is coming increasingly to a town near you.  In every legal field arbitration is being pushed as the “cheap alternative” to litigation.

The problem:  Once you leave our carefully regulated and highly predictable judicial system, the alleged savings in money and time in arbitration, is highly questionable in actual practice.

For one example, unlike Civil litigation and the wealth of procedural structure provided by the Rules of Civil Procedure and a totally independent (and “free”) judicial system, unless you are well-versed and constantly diligent in your efforts, arbitration could become an unexpected nightmare.

Paying an arbitrator or a panel of arbitrators for what is “free” in the judicial system is often a shock to the parties in an arbitration when the totality of the arbitrator’s fees and costs arrive.

There is a comparative  loss of the ability to timely “select” your panel and thus obtain any timely “trial” date.  See, Nursing Home Arbitration:  The Headache of Obtaining Your “Deciding” Arbitrator,  August 23, 2013; Arbitration:  Unilateral Steps to Manage Timely Selecting Your “Deciding” Arbitrator, August 30, 2013

And, simply obtaining your hearing date (or, if continued, another) can many times see a much greater time passage than if in comparable Circuit Court.

These are only a few of issues to consider.

Be fore-warned and thus fore-armed.

Make sure  any arbitration is really in your client’s interest.  But, if it is not avoidable (i.e., your client elected without consultation,  make sure you really know just what you are now really facing.

Dan, from Kissimmee, Florida.

(P. S.  Sorry for missing a substantive posting in January.  But the wine and the Mediterranean in Winter in Spain was, frankly, worth it!)

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