Wednesday, June 1, 2016

Next Month Rev. Arb. Code Applies Across the Board in FL

Commencing on July 1, 2016, all arbitration agreements, regardless of their date, will be governed by Chapter 682, Fla. Stat. (2013), The Revised Florida Arbitration Code. At present, the statute does not apply to any arbitration that commenced, or any right that accrued, before July 1, 2013. Pursuant to the revised code which is based on the Revised Uniform Arbitration Act (RUAA), it automatically applies to all non-FAA arbitration agreements entered into after July 1, 2013. For now, it 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. Revision applicability should be of interest to legal professionals enforcing arbitration provisions common to industries throughout Florida, including: construction, consumer, insurance, employment, securities, and commercial contracts. It is also important to note that Florida’s statutes of limitation (SOL) 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 recently rejected arguments that the legislature did not intend to incorporate arbitrations within its reference to proceedings such that an arbitration proceeding is an “action” broadly defined to encompass any “civil action or proceeding." 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 revised statute here-- and Fla. S. Ct. decision on SOL in arbitration here--