Arbitration is an increasingly popular alternative to traditional litigation because arbitration proceedings are faster and more cost effective. Many would-be litigants are incorporating binding arbitration clauses into their agreements for the economic benefits. However, parties who enter agreements with arbitration clauses should consider the conclusive nature of an arbitration proceeding. As arbitration clauses become prevalent in the consumer and commercial context, more and more individuals and businesses will face the reality of an oftentimes-unreviewable arbitration award. The Mavrick Law Firm has significant experience with assessing the validity of arbitration clauses and successfully representing clients in arbitration proceedings.
The Revised Florida Arbitration Code allows parties to arbitration to file a motion to vacate, modify, or correct an award in limited circumstances. See §§ 682.13 – 682.14, Fla. Stat. § 682.13 provides, in part, that a court can vacate an arbitration award only if:
(a) The award was procured by corruption, fraud…(b) There was:1. Evident partiality by an arbitrator …3. Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding; (c) An arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to hear evidence material to the controversy, …(d) An arbitrator exceeded the arbitrator’s powers;(e) There was no agreement to arbitrate …(f) The arbitration was conducted without proper notice …
Further, § 682.14, Fla. Stat., provides, in part, that a court can modify or correct an award only if:
(a) There is an evident miscalculation of figures or an evident mistake…(b) The arbitrators have awarded upon a matter not submitted in the arbitration …(c) The award is imperfect as a matter of form, not affecting the merits of the controversy.
Therefore, a party that encounters any of the grounds listed in §§ 682.13 – 682.14 should timely file a motion to vacate, modify, or correct with the court. See Nestor v. Ward, 163 So. 3d 582, 585 (Fla. 3d DCA 2015) (“In the absence of a motion to vacate, modify, or correct the arbitration award, the trial court must confirm the award”).
In sum, potential parties to arbitration proceedings should understand the finality of an arbitrator’s decision. Like a judgment from a lower court, “[t]he binding effect of an arbitration … award becomes final once the arbitrator releases his findings.” Capital Factors, Inc. v. Alba Rent-A-Car, Inc., 965 So. 2d 1178, 1182–83 (Fla. 4th DCA 2007). Unlike a judgment from a lower court, the right to judicial review is exclusively limited to the grounds enumerated in the Revised Florida Arbitration Code: This is true even if an arbitrator makes errors of judgment as to the law or fact and even when an award is excessive under substantive law. See Managed Care Ins. Consultants, Inc. v. United Healthcare Ins. Co., 2017 WL 3085339 (Fla. 4th DCA July 19, 2017); Prudential-Bache Sec., Inc. v. Shuman, 483 So. 2d 888 (Fla. 3d DCA 1986). No matter the facts, unless provided for by statute, the award of an arbitrator cannot be disturbed. An arbitration award operates “as a final and conclusive judgment, and – however disappointing it may be – the parties must abide by it.” Cassara v. Wofford, 55 So. 2d 102, 105 (Fla. 1951). Therefore, individuals and businesses should enter agreements with an awareness of dispute resolution clauses and negotiate accordingly if the concept of arbitration of an unassailable arbitration award is undesirable.
The Mavrick Law Firm has successfully represented many parties in arbitration proceedings. This article is not a substitute for legal advice tailored to a particular situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311.