HB 1135

1
A bill to be entitled
2An act relating to the Florida Consumer and Small Business
3Arbitration Act; reorganizing provisions of ch. 682, F.S.;
4amending s. 682.01, F.S.; conforming a short title
5provision; creating s. 682.501, F.S.; providing a short
6title; creating s. 682.502, F.S.; providing for
7applicability; providing definitions; providing that the
8act does not apply to certain insurance policies and
9certain arbitrations; providing that mandatory binding
10arbitration is void and unenforceable except as otherwise
11provided by federal law; creating s. 682.503, F.S.;
12providing proceedings to compel arbitration; creating s.
13682.504, F.S.; providing for the appointment of
14arbitrators and umpires; prohibiting certain persons from
15serving as an arbitrator or umpire; providing disclosure
16requirements; requiring arbitrators and umpires to perform
17their duties in compliance with certain standards;
18requiring an oath; creating s. 682.505, F.S.; providing
19procedures for an arbitration proceeding; requiring
20arbitrators and umpires to conduct arbitration in a manner
21that is fundamentally fair; authorizing an arbitrator or
22umpire to issue subpoenas for the attendance of witnesses
23and production of documents; providing for discovery and
24procedures to be conducted by certain rules; requiring
25that witnesses testify under oath; providing for per diem
26and travel expenses; providing that a party has a right to
27be represented by an attorney at an arbitration proceeding
28or hearing; providing for venue; providing for decisions
29to be made by majority vote in certain circumstances;
30prohibiting the administration of an arbitration under
31certain agreements or rules; prohibiting the award of
32certain fees; providing recording requirements; creating
33s. 682.506, F.S.; providing requirements for issuing an
34arbitration award; requiring that the written award and
35agreement or provision for arbitration be entered into the
36court of record; requiring the court to confirm the award
37under certain circumstances; requiring the judgment to be
38recorded, docketed, and enforced as any other judgment in
39a civil action; creating s. 682.507, F.S.; authorizing an
40arbitrator or umpire to award any relief or damages
41allowed by law; requiring the circuit court to establish
42the amount of compensation for arbitrators and umpires if
43the parties cannot agree; authorizing an arbitrator or
44umpire to award attorney's fees and other expenses of
45arbitration to the same extent as would be allowed if the
46same claim were brought in a court of law; creating s.
47682.508, F.S.; providing circumstances under which a court
48may vacate an award; prohibiting parties from narrowing or
49expanding the grounds for vacating an award; creating s.
50682.509, F.S.; providing procedures for the modification
51and correction of awards; providing that an application to
52modify or correct an award may be joined in the
53alternative with an application to vacate the award;
54authorizing the court to modify or correct awards under
55certain circumstances; providing that an application to
56modify or correct an award may be joined in the
57alternative with an application to vacate the award;
58requiring a motion to modify or correct an award to be
59filed under a certain rule; creating s. 682.510, F.S;
60authorizing the appeal of an arbitration decision;
61providing circumstances under which an arbitration
62decision may be appealed; specifying rules which may be
63reviewed by writ of certiorari; creating s. 682.511, F.S.;
64providing information to be included in arbitration
65agreement disclosure provisions; providing that failure to
66make such disclosures constitutes a deceptive and unfair
67trade practice and a waiver of rights to compel
68arbitration; providing for the enforcement of such
69provision by injunction; providing liability; providing an
70effective date.
71
72Be It Enacted by the Legislature of the State of Florida:
73
74     Section 1.  The title of chapter 682, Florida Statutes, is
75redesignated as "Arbitration." Chapter 682, Florida Statutes,
76shall be divided into parts. Part I of chapter 682, Florida
77Statutes, shall consist of sections 682.01 through 682.22,
78Florida Statutes, and the title of that part shall be
79"Arbitration Code." Part II of chapter 682, Florida Statutes,
80shall consist of sections 682.501 through 682.511, Florida
81Statutes, and the title of that part shall be "Consumer and
82Small Business Arbitration Act."
83     Section 2.  Section 682.01, Florida Statutes, is amended to
84read:
85     682.01  Short title Florida arbitration code.--This part
86Sections 682.01-682.22 may be cited as the "Florida Arbitration
87Code."
88     Section 3.  Part II of chapter 682, Florida Statutes,
89consisting of sections 682.501, 682.502, 682.503, 682.504,
90682.505, 682.506, 682.507, 682.508, 682.509, 682.510, and
91682.511, is created to read:
92
PART II
93
CONSUMER AND SMALL BUSINESS ARBITRATION ACT
94     682.501  Short title.--This part may be cited as the
95"Florida Consumer and Small Business Arbitration Act."
96     682.502  Application in general; definitions.--
97     (1)  Except as otherwise provided in this part, this part
98applies to consumer and small business arbitration agreements.
99Notwithstanding any provision of part I of this chapter to the
100contrary, part I of this chapter does not apply to any
101arbitration agreement to which this part applies.
102     (2)  As used in this part, the term:
103     (a)  "Arbitration agreement" or "agreement" means any
104arbitration agreement involving a consumer or small business to
105which this part applies, except as otherwise provided in this
106section.
107     (b)  "Consumer" means an individual, including a child by
108and through its parent or legal guardian and the personal
109representative of the estate of a deceased individual regardless
110of the cause of death, who seeks or acquires, including by
111lease, any goods or services.
112     (c)  "Court" means any court of competent jurisdiction of
113this state. The making of an agreement or provision for
114arbitration subject to this part and providing for arbitration
115in this state shall, whether made within or outside this state,
116confer jurisdiction on the court to enforce the agreement or
117provision under this part, refuse to enforce the agreement,
118enter judgment on an award duly rendered in an arbitration
119thereunder, or vacate, modify, or correct an award rendered
120thereunder for such cause and in the manner provided in this
121part.
122     (d)  "Small business" means an independently owned and
123operated business concern that employs no more than 200
124permanent full-time employees or that, together with its
125affiliates, has a net worth of not more than $10 million or any
126firm based in this state which has a Small Business
127Administration 8(a) certification.
128     (3)  Every provision in an insurance policy requiring
129arbitration or restricting a party or beneficiary from enforcing
130any right under the policy by legal proceedings or limiting the
131time to do so is void and unenforceable.
132     (4)  This part does not apply to any arbitrator,
133arbitration organization, or umpire in an arbitration proceeding
134governed by rules adopted by a securities self-regulatory
135organization and approved by the United States Securities and
136Exchange Commission under the Securities and Exchange Act of
1371934, 15 U.S.C. s. 78s, as amended.
138     (5)  This part does not apply to arbitrations covered under
139chapter 718.
140     (6)  Any provision for mandatory binding arbitration within
141any pre-dispute arbitration agreement is void and unenforceable
142except to the extent federal law provides for its
143enforceability.
144     682.503  Proceedings to compel arbitration.--A party to an
145agreement or provision for arbitration which is subject to this
146part who claims the neglect or refusal of another party to
147comply, or who claims that the agreement or provision does not
148apply, may make application to the court for an order
149determining applicability, including validity, of the agreement
150or provision to the case or controversy or the application of
151this part. The court shall take evidence and hear and determine
152the issue as soon as practicable and shall attempt to expedite
153the issue on its calendar. If the court is satisfied that no
154substantial issue exists as to the making of the agreement or
155provision, that an arbitratable issue exists, that the
156arbitration agreement is not void as against public policy, and
157that the right to arbitration has not been waived, it shall
158grant the application.
159     682.504  Appointment of arbitrators and umpires;
160disclosure.--
161     (1)  The parties shall select the arbitrators or umpires
162within 30 days after the arbitration has been initiated. If the
163parties are unable to come to an agreement, the party compelling
164arbitration shall send the responding party a complete list of
165certified arbitrators in the responding party's county who
166qualify to arbitrate under s. 44.103. The responding party shall
167choose three arbitrators from the list within 15 days. The party
168compelling arbitration shall then select one arbitrator from the
169list of three within 15 days.
170     (2)  Before accepting appointment, an individual or
171arbitration organization asked to serve as an arbitrator or
172umpire, hereinafter referred to as the "prospective arbitrator,"
173shall disclose to all parties and to any other arbitrators or
174umpires involved in the proceeding any facts that might affect,
175or appear to affect, the impartiality of the arbitrator or
176umpire in the arbitration proceeding, including, but not limited
177to:
178     (a)  Any personal or financial interest in the outcome of
179the arbitration proceeding.
180     (b)  Any existing or past relationship with:
181     1.  Any of the parties to the agreement to arbitrate or the
182arbitration proceeding.
183     2.  The parties' industry.
184     3.  The parties' counsel or representatives.
185     4.  Witnesses.
186     5.  Other arbitrators.
187     (c)  The number of arbitrations conducted for the past 5
188years involving either party, their industry, the attorneys or
189their firms, the outcomes of those past arbitrations, and the
190dates of decision.
191     (3)  If a prospective arbitrator fails to comply with the
192disclosure in this section within 10 days after notice of
193appointment, the prospective arbitrator may not serve as an
194arbitrator absent the written consent of all parties and a new
195prospective arbitrator shall be selected.
196     (4)  After receipt of the disclosures required in this
197section, any party may object to a prospective arbitrator within
19810 days and the parties will then select different prospective
199arbitrators.
200     (5)  In addition to the other requirements of this section,
201a prospective arbitrator shall comply with the standards set
202forth in Canon 1 and Canon 3 of the Code of Judicial Conduct.
203Failure to comply with the provisions of this part shall be
204grounds for disqualification.
205     (6)  The prospective arbitrator shall subscribe to an oath
206that he or she has reviewed and met all of the standards in this
207section and will continue to comply with those standards
208throughout the arbitration proceeding. A copy of the oath shall
209be served on each party to the arbitration and the other
210prospective arbitrators.
211     (7)  After appointment, the standards and procedure for
212disqualification of an arbitrator or umpire shall be those
213provided by general law, rule, and judicial precedent for the
214disqualification of judges.
215     682.505  Arbitration process.--
216     (1)  The purpose of this part is to secure the just,
217speedy, inexpensive, and fair resolution of disputes between the
218parties to consumer or small business arbitration.
219     (2)  Arbitrators and umpires must conduct arbitration in a
220manner that is fundamentally fair. Fundamental fairness includes
221due process, adequate and appropriate notice, and the
222opportunity to be heard, present relevant and material evidence,
223cross-examine witnesses appearing at the hearing, present
224arguments, and cite legal authority before unbiased
225decisionmakers.
226     (3)  The parties shall be given the opportunity to perform
227adequate and appropriate discovery to properly present and prove
228their case, and the arbitrators and umpires shall use rules
229designed to secure appropriate discovery in a speedy and
230inexpensive manner. Arbitrators and umpires may issue subpoenas
231for the attendance of witnesses and for the production of books,
232records, documents, and other evidence, and shall have the power
233to administer oaths, as would otherwise be provided for in a
234civil action.
235     (4)  Unless the parties agree otherwise, the scope of
236discovery and the procedure for any hearings and trials shall be
237governed by Rule 7.020 of the Florida Small Claims Rules.
238     (5)  All witnesses must be under oath during testimony.
239Witnesses shall serve without compensation but shall be entitled
240to receive reimbursement for per diem and travel expenses as
241provided in s. 112.061.
242     (6)  A party has the right to be represented by an attorney
243at any arbitration proceeding or hearing under this part. A
244waiver thereof before the proceeding or hearing shall be void.
245     (7)  Venue shall be governed by s. 682.19.
246     (8)  If the parties agree to arbitration with more than one
247arbitrator or umpire, then all decisions shall be by majority
248vote, unless the parties agree otherwise.
249     (9)  Notwithstanding any other provision of law, an
250arbitrator or umpire may not administer an arbitration under any
251agreement or rule requiring that a consumer or small business
252who is a party to the arbitration pay the fees and costs
253incurred by any opposing party if the consumer or small business
254does not prevail in the arbitration, including, but not limited
255to, the fees and costs of the arbitrator, provider organization,
256attorney, or witnesses.
257     (10)  The arbitrators and umpires shall maintain a record
258of all activity in any arbitration proceeding.
259     682.506  Award, opinion, and judgment.--
260     (1)  An arbitrator's or umpire's award shall be in writing
261and shall contain an opinion with findings addressing the issues
262raised and the damages awarded, if any. The award shall be
263issued within a reasonable time after the final hearing but not
264more than 60 days after the date of the final hearing, unless an
265extension is granted by the court upon a demonstration of good
266cause. The parties may, by written agreement, extend the
267deadline; however, in no case shall a party disclose indirectly
268or directly to the arbitrator or umpire that the other party
269refuses to agree to extend the deadline. The award shall be
270signed by the arbitrators joining in the award or by the umpire
271in the course of his or her jurisdiction. A copy of the award
272shall be delivered to each party to the arbitration personally
273or by registered or certified mail.
274     (2)  The written award and the agreement or provision for
275arbitration shall be entered into the court record by filing
276them with the clerk of the court having jurisdiction over the
277arbitration at such time as entry of judgment is sought. If a
278court file has not been previously opened, the party seeking
279entry of judgment shall pay the applicable filing fee and file
280the documents specified in this section before a judgment is
281entered.
282     (3)  After a party to an arbitration proceeding receives
283notice of the filing of the arbitration opinion as required by
284subsection (2), the court shall confirm the award unless the
285court modifies or vacates an award as provided in s. 682.508 or
286s. 682.509.
287     (4)  Upon the granting of an order directing a rehearing or
288confirming, vacating, modifying, or correcting an award, the
289judgment or decree shall be entered in conformity therewith and
290be enforced as any other judgment or decree.
291     (5)  The judgment shall be recorded, docketed, and enforced
292as any other judgment in a civil action.
293     682.507  Remedies; fees and expenses of arbitration.--
294     (1)  An arbitrator or umpire may award any relief or
295damages allowed by law and otherwise awardable under the legal
296standards that would apply to the same claim if brought in a
297court of law.
298     (2)  Arbitration fees and expenses shall be reasonable. A
299consumer or small business may not be subject to any arbitration
300fee or cost amounts greater than the consumer or small business
301would be if the action were brought in a court of law. Unless
302otherwise agreed by the parties to the arbitration after the
303arbitration proceeding has been instituted, the circuit court
304shall establish the amount of compensation, if any, that each
305arbitrator or umpire shall receive. The court may order that the
306arbitrator's and umpire's fees, the cost of facilities for the
307arbitration, and the arbitration expenses be apportioned between
308the parties in an equitable manner so as to make a prevailing
309consumer or small business whole.
310     (3)  An arbitrator or umpire shall award reasonable
311attorney's fees and other reasonable expenses of arbitration to
312the extent authorized by law in a civil action involving the
313same claims.
314     682.508  Vacating an award.--
315     (1)  Upon application of a party within 90 days after the
316applicant knew or should have known, the court shall vacate an
317award if:
318     (a)  The award was procured by corruption, fraud, or other
319undue or unjust means; or
320     (b)  The arbitrator or umpire failed to meet the standards
321in s. 682.504.
322     (2)  Upon application of a party within 90 days after the
323date of delivery of a copy of the award to the applicant, the
324court shall vacate an award if:
325     (a)  The arbitrator or umpire exceeded his or her powers;
326     (b)  The arbitrator or umpire conducted the hearing
327contrary to the provisions of this part or without proper notice
328of the initiation of any stage of arbitration as required by
329this part, or otherwise failed to comply with s. 682.505;
330     (c)  The arbitration award is inconsistent with applicable
331law, violates public policy, is arbitrary or capricious or lacks
332a rational basis, or is not supported by substantial evidence as
333reflected in the record; or
334     (d)  The arbitration was conducted in a manner that was not
335fundamentally fair.
336     (3)  Parties may not narrow or expand the grounds for
337vacating an award as provided in this section. A motion to
338vacate an arbitration award shall be filed under Rule 1.540 of
339the Florida Rules of Civil Procedure.
340     682.509  Modification or correction of award.--
341     (1)  Upon application made within 90 days after the date of
342delivery of a copy of the award to the applicant, the court
343shall modify or correct the award if:
344     (a)  There is an evident miscalculation of figures or an
345evident mistake in the description of any person, thing, or
346property referenced in the award;
347     (b)  The arbitrator or umpire has made an award upon a
348matter not submitted to him or her, and the award may be
349corrected without affecting the merits of the decision upon the
350issues actually submitted; or
351     (c)  The award is imperfect as a matter of form, not
352affecting the merits of the controversy.
353     (2)  If the application is granted, the court shall modify
354and correct the award so as to effect its intent and shall
355confirm the award as modified and corrected. Otherwise, the
356court shall confirm the award as made.
357     (3)  An application to modify or correct an award may be
358joined in the alternative with an application to vacate the
359award. However, the filing of a motion to modify or correct an
360award shall toll the time for taking any other action under this
361part as to the award or opinion.
362     (4)  A motion to modify or correct an award shall be filed
363under Rule 1.540, Florida Rules of Civil Procedure.
364     682.510  Appeals.--
365     (1)  A final appeal, or an interlocutory appeal if
366appropriate, may be taken from a circuit or county court to the
367appropriate court of appeals as a result of:
368     (a)  An order denying or granting an application to compel
369arbitration made under s. 682.503, pursuant to Rule 9.130 of the
370Florida Rules of Appellate Procedure;
371     (b)  An order denying or granting an application to stay
372arbitration made under s. 682.503, pursuant to Rule 9.130 of the
373Florida Rules of Appellate Procedure;
374     (c)  A decision regarding the impartiality or lack of
375conflict on the part of the arbitrator or umpire;
376     (d)  An evidentiary ruling, except as provided in paragraph
377(2)(a), after final award or decision;
378     (e)  An order confirming or denying confirmation of an
379award;
380     (f)  An order modifying or correcting an award;
381     (g)  An order on a motion to vacate an award; or
382     (h)  A judgment or decree entered under this part.
383     (2)  The following may be reviewed by writ of certiorari:
384     (a)  A ruling concerning evidentiary privileges or
385confidentiality rights of the parties; or
386     (b)  A ruling concerning a protective order relating to the
387disclosure of privileged information, confidential information,
388or trade secrets.
389     (3)  The appeal or petition for certiorari shall be taken
390in the manner and to the same extent as from orders or judgments
391in a civil action.
392     682.511  Disclosure provisions.--
393     (1)  An arbitration agreement shall clearly and
394conspicuously, in bold type no smaller than 18 point and on a
395separate piece of paper, disclose the following:
396     (a)  The filing fee for the arbitration proceeding.
397     (b)  The average daily cost for an arbitrator, umpire, and
398hearing room.
399     (c)  Other charges that the arbitrator or umpire will
400assess in conjunction with an arbitration.
401     (d)  The proportion of these costs that each party bears if
402the consumer or small business prevails or if the consumer or
403small business does not prevail.
404     (e)  A place on the consumer or agreement where a consumer
405may choose not to arbitrate, and in that area of the agreement
406the agreement shall prominently state that opting not to
407arbitrate does not affect the right of the consumer or small
408business to goods or services.
409     (f)  Any and all conditions precedent that must occur
410before any party may demand arbitration or enforce rights under
411the contract.
412     (2)  Failure to provide disclosures under subsection (1)
413constitutes a deceptive and unfair trade practice under the
414Florida Deceptive and Unfair Trade Practices Act as provided in
415part II of chapter 501 and a waiver of rights to compel
416arbitration pursuant to the arbitration agreement. Further, the
417information provided in the disclosure may be considered in a
418determination of whether an arbitration agreement is
419unconscionable or is otherwise not enforceable under applicable
420law.
421     (3)  Upon a violation of this section by a party
422responsible for providing disclosures under subsection (1), any
423person or entity, including the Office of the Attorney General,
424may petition a court to enjoin the party from violating this
425section as to arbitration agreements into which it enters in the
426future. The party violating subsection (1) is liable to the
427person or entity bringing such an action for that person's or
428entity's reasonable attorney's fees and costs if the court
429issues an injunction or if, after the action is commenced, the
430party voluntarily complies with the Florida Deceptive and Unfair
431Trade Practices Act as provided in part II of chapter 501.
432     Section 4.  This act shall take effect July 1, 2009.


CODING: Words stricken are deletions; words underlined are additions.