Pennsylvania has joined at least twenty (20) other states in adopting the Revised Uniform Arbitration Act (RUAA) that now governs all agreements to arbitrate in Pennsylvania. Arbitration can come up in numerous areas of law:
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Employment contracts, involving non-compete clauses or non-disparagement agreements,
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Construction contracts, often involving AAA arbitration,
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A home inspection done by home inspection company, relative to the purchase of a dwelling,
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Ride-share (or “rideshare”) contracts involving Lyft or Uber (for more, click here),
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Agreement to waive mechanic’s liens for construction or improvement to real property.
PA enacted the RUAA to address modern issues that come up and to address matters not squarely addressed before, such as:
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How to initiate arbitration proceedings,
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Ensuring that arbitrators will be impartial,
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Immunity for individual arbitrators,
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How discovery will be handled, and
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When sanctions may be ordered
Initiation of Arbitration
The new PA law — which is the RUAA — establishes procedures for the initiation of arbitration. Notice must be given in writing or by an electronic record describing the nature of the controversy and the remedy sought. Notice must be given to all parties to the arbitration agreement, not just to the party against which a claim is filed. A court may vacate an arbitration award for failure to give proper notice of the initiation of arbitration.
A Duty to Disclose
An arbitrator must disclose potential biases, such as a financial interest in the outcome or personal connections to the litigants. This is a continuing duty.
Other Provisions
What are some of the other provisions?
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The Arbitrator Being Immune. An arbitrator has immunity under the RUAA like any publicly elected judge.
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The Discovery Process. The standard under the RUAA permits discovery “as appropriate in the circumstances, taking into consideration the needs of the parties to the arbitration proceeding and other affected parties and the desirability of making the proceeding fair, expeditious and cost-effective.” This also permits discovery against non-parties via power from the Commonwealth of Pennsylvania even though this is only “private” arbitration.
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The Ability to Punish and Sanction. Thanks to the RUAA, the arbitrator may order sanctions and award punitive damages so long as the arbitrator specifies in the award the basis for the determination. As a practical matter, however, the arbitrator is selected with consent of all parties, and therefore the arbitrator – if he or she wants future business from these litigators in new and subsequent cases — will hesitate before coming down too hard on one party or that party’s attorney. This, with the AAA rules, can allow a court to sanction a worker for violating a non-compete agreement. A mediation agreement cannot, however, constitute a mechanic’s lien, which has its own separate procedure through the courts, which clouds title to property.
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The Right to Opt Out and Waive Provisions. Via the RUAA, the parties may modify or restrict the provisions of the RUAA, with certain exception.
Call our Pittsburgh Litigation Lawyers any time to learn more about arbitration agreements, how arbitration works in Pennsylvania. We will explain the process plus legal updates in general!
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