2016 Arbitration Clause Thoughts

Originally published by Rob Radcliff.

 

I spent most of last week in a construction arbitration.  It got me to thinking about drafting arbitration clauses, be it in the employment or any context.  A few years ago I wrote an article on what I would consider in preparing an agreement.  The suggestions included:

1. A requirement that the case be disposed of within a certain time period. (i.e. 6 months from filing);
2. A limitation on the num the number of witnesses that can be called, the amount of time each side has to put on their case, basically anything that would set parameters on how long the hearing will take;
3. Statute of Limitations – is a provision necessary that spells out how long a party has to bring a claim;
4. A provision that either adopts and references the Texas arbitration statute or Federal Arbitration Act;
5. A provision that specifically states there is no appeal;Can witnesses appear by phone or some form of video, or can affidavits be submitted in lieu of live testimony?;
6. A provision that requires some form of mediation before an arbitration can be filed (another way to try and short circuit the process); and
7. If the provision dispenses with using AAA or some other group, specific details about arbitrator selection and the process of the hearing.

Some more items to add to the list:

1. A fee provision that provides for attorneys’ fees, expert fees, arbitration fees, other arbitration costs, and maybe anticipated fees to confirm an arbitration award;
2. A provision that permits the depositions of corporate representatives; and
3. A provision that is broad enough to encompass any potential dispute between the parties.

As I said several years ago. you can overlawyer any provision with too much information but in Texas parties are free to contract as they see fit and that goes for arbitration provisions too.

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