ARBITRATION STILL A BAD IDEA IN BUSINESS CONTRACTS

Florida recently amended its Arbitration Act, mostly to put it in line with the federal version.  Reading the changes’ review in the Florida Bar Journal only confirms, in our mind, that arbitration remains a very bad idea in most, if not all, business contracts.  (Some liberties retailers may take in arbitration clauses change the picture a bit for business-to-consumer deals.)

The amendments codify what was already fairly common practice.  They expressly allow the same discovery procedures as regular lawsuits, including depositions.  They allow for motions to be brought, including the equivalent of motions for summary judgment.  The arbitrator has as much control over the proceedings as a judge over judicial ones, including the authority to awards attorneys’ fees, punitive damages, or temporary relief like injunctions.

All these provisions go to show that arbitration will not necessarily be any quicker, or cheaper, than a lawsuit.  And yet, still, there are no provisions to appeal arbitral decisions where the arbitrator commits an egregious error of law.  There is, in short, very little to gain and a lot to lose.