Monday, January 18, 2016

Revised Florida Arbitration Code Reminders

It is important to remind potential parties to state arbitration that the Revised Florida Arbitration Code can still apply to arbitration agreements made before its effective date of July 1, 2013, if all the parties agree. Otherwise, the law existing at the time of the arbitration agreement applies through June 30, 2016. Commencing on July 1, 2016, all arbitration agreements, regardless of their date, will be governed by Chapter 682, Fla. Stat. The statute does not apply to any arbitration that commenced, or any right that accrued, before July 1, 2013. Pursuant to the revised code, it automatically applies to all arbitration agreements entered into after July 1, 2013. Revision applicability should be of interest to legal professionals drafting arbitration provisions common to industries throughout Florida, including: construction, consumer, insurance, employment, securities, and commercial contracts. In regard to application of Statutes of Limitation, we are reminded of the Florida Supreme Court Case of Raymond James v. Phillips, et al., No. SC11-2513 (May 16, 2013) holding that Florida’s statutes of limitation apply to arbitrations. Florida’s SOL time frames are contained in Chapter 95, Fla. Stat. and apply to any “civil action or proceeding.” Fla. Stat. § 95.011 does not expressly define “action” or “proceeding.” The use of this undefined phrase was the subject of significant debate in securities arbitrations a few years ago. Without reference to Florida’s SOL, securities firms, as well as foreign and domestic companies conducting business in this state, were faced with rewriting their arbitration agreements to provide an express limitations period. Because of the uncertainty associated with the enforceability of such provisions, some may have avoided doing business in this state altogether. The Supreme Court of Florida in Phillips rejected arguments that the legislature did not intend to incorporate arbitrations within its reference to proceedings. Likewise, the court found an arbitration proceeding is an “action” broadly defined to encompass any “civil action or proceeding." Writing for a unanimous court, Justice Pariente opined arbitration proceedings are utilized in a wide array of contexts and not applying statutes of limitation would permit parties to wait to bring a claim until documents or witnesses are difficult to locate-- a situation that would significantly increase the time, effort, and expense to resolve a dispute. See more in the statute here-- and opinion here--