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House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: February 8, 2017 03:37 PM
From: Representative Tedd C. Nesbit
To: All House members
Subject: Revised Uniform Arbitration Act (RUAA) -- Prior HB 34
 
In the near future I plan to reintroduce the Revised Uniform Arbitration Act (Prior HB 34). In 1980 Pennsylvania became one of 49 jurisdictions adopting the National of Commissioners on Uniform State Laws (NCCUSL) 1955-drafted Uniform Arbitration Act (UAA) (or similar legislation). A key purpose of the UAA was to ensure arbitration agreements were enforceable. The widespread acceptance and use of arbitration, however, has pushed the NCCUSL to revise the UAA, as it fails to cover the following issues which arise in arbitration:

(1) who decides the arbitrability of a dispute and by what criteria;
(2) whether a court or arbitrators may issue provisional remedies;
(3) how a party can initiate arbitration;
(4) whether arbitration proceedings may be consolidated;
(5) whether arbitrators must disclose facts reasonably likely to affect impartiality;
(6) what extent arbitrators or an arbitration organization are immune from civil actions;
(7) whether arbitrators or representatives of arbitration organizations may be required to testify in another proceeding;
(8) whether arbitrators have the discretion to order discovery, issue protective orders, decide motions for summary dispositions, hold pre-hearing conferences, and otherwise manage the arbitration process;
(9) when a court may enforce a pre-award ruling by an arbitrator;
(10) what remedies an arbitrator may award, especially in regard to attorney's fees, punitive damages, or other exemplary relief;
(11) when a court can award attorney's fees and costs to arbitrators and arbitration organizations;
(12) when a court can award attorney's fees and costs to a prevailing party in an appeal of an arbitrator's award;
(13) which UAA sections would not be waivable, a key matter to insure that fairness to the parties is preserved, particularly where one party may have significantly less bargaining power than another; and
(14) the use of electronic information and other modern technology in arbitration.

The RUAA addresses these issues and provides a more up-to-date arbitration process. It generally gives parties the opportunity to shape the arbitration process to their own needs, while generally providing a default mechanism if the parties do not have a specific agreement on a particular issue. The RUAA also protects arbitrators from unwarranted litigation to insure their independence by giving them immunity, and recognizes United States Supreme Court decisions that the pro-arbitration policy of the Federal Arbitration Act (FAA) preempts state law on issues that would moot or limit contractual agreements to arbitrate.

In addition, note that the RUAA ends the UAA presumption (42 Pa.C.S. § 7302(a)) that all arbitrations are governed by common law unless the parties have provided in writing to the contrary. Instead, under the RUAA all arbitrations are governed by RUAA unless the parties have provided otherwise. Further, the RUAA ends the UAA’s broad judicial review of arbitration awards where: i) the Commonwealth is a party; ii) any political subdivision arbitrates with an employee or employee representatives; or iii) any person has been required by law to submit or agree to submit a controversy to arbitration pursuant to UAA (42 Pa.C.S. § 7302(d)). This broad judicial review is highly protective of the Commonwealth and its subdivisions and was enacted when there was little experience with the government engaging in arbitration. Given the proliferation of and favorable experiences with arbitration, there is now no need for such protections, which in fact are inconsistent with a key goal of arbitration, finality and avoidance of the costly and time consuming judicial process.

This bill enacts the RUAA as drafted by the NCCUSL with three changes, as follows:
  1. The time for filing to vacate an award per subsection (b) of Section 23, VACATING AWARD, has been changed from 90 to 30 days.
  2. Subsection (b) of Section 28, APPEALS, specifies 30 days as the time within which an appeal from an award must be taken
  3. Section 3, WHEN [ACT] APPLIES, is amended as follows, the amendments in italics:
    (a) This [Act] governs an agreement to arbitrate made on or after [the effective date of this [Act]] unless the parties have expressly provided in writing to the contrary.
    . . . .
    (c) On or after [a delayed date], this [Act] governs an agreement to arbitrate whenever made unless the parties have expressly provided in writing to the contrary.

    Please join me in cosponsoring this legislation.
Previous Cosponsors - CUTLER, MARSICO, EVERETT, JAMES, OBERLANDER, M. K. KELLER, PETRI and MOUL



Introduced as HB781