An edited version of the below article was published in the January 2007 issue of the King County Bar Bulletin. Below article © Phil Cutler and Tom Brewer (2006 and 2007); published article © King County Bar Association (2006 and 2007).
In 2005 Washington joined a short but growing list of other states that have enacted the Revised Uniform Arbitration Act. As enacted, the new statute provided for a gradual phase-in but, effective July 1, 2006, the new statute governs all non-labor and non-family law agreements to arbitrate in Washington, regardless of whether the contract containing the parties’ arbitration agreement was drafted before or after that date. RCW 7.04A.030.
The new statute contains a number of features that should be of interest to trial lawyers. Some of these were specifically intended by the drafters to remedy several perceived problems previously associated with arbitration, and thus promote its use in the future as an even more popular alternative dispute resolution tool than it is already in Washington.
Background. Since the 19th century, Washington has provided for and recognized the resolution of disputes through arbitration. Prior to 2005, the last major revision of the arbitration code occurred in 1943 when the Legislature adopted the Washington Arbitration Act, RCW Chapter 7.04. Although the National Conference of Commissioners on Uniform State Laws promulgated a uniform arbitration act in 1955, and a majority of states adopted it, Washington did not – although it did modify its 1943 statute from time to time over the years.
Because of the growth of arbitration as a preferred method of dispute resolution in many areas, the greater complexity of many disputes resolved through arbitration, and various developments to the law of arbitration, in the mid-1990s the Commissioners began drafting the Revised Uniform Arbitration Act to meet perceived changes in the needs of clients and lawyers using arbitration. The final draft was approved in August 2000. In 2005 our Legislature adopted the new Revised Uniform Arbitration Act, RCW Chapter 7.04A. For several reasons, this comprehensive revision of our state’s arbitration procedures is likely to spur the use of arbitration as a method of dispute resolution in Washington.
As of this writing, 12 states have adopted the RUAA; legislation to enact it is pending in 7 other states.
What’s New? The new Washington UAA not only puts Washington in line with other states adopting the RUAA, it gives the lawyer advising clients concerning arbitration important new tools for the arbitration process. As the new act changes arbitration practice considerably, this article can only highlight some of the more significant changes. These are:
Provisional Remedies: One important issue addressed by the drafters is the problem of how to get emergency injunctive relief, both in the window of time before the arbitral panel has been composed and is able to act and, subsequently, from the arbitral tribunal itself: in appropriate cases such an application may be made to a court of competent jurisdiction when the arbitrator is not yet in place – without waiving the applicant’s ability to enforce the arbitration agreement later – and thereafter to the arbitrator. Prior to appointment of an arbitrator who is able to act, the court, on motion “and for good cause shown,” may “enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding….” After an arbitrator is appointed and able to act, the arbitrator “may issue such orders for provisional remedies, including interim awards, as the arbitrator finds necessary to protect the effectiveness of the arbitration proceeding and to promote the fair and expeditious resolution of the controversy, to the same extent and under the same conditions as if the controversy were the subject of a civil action.” RCW 7.04A.080.
Consolidation: One of the difficulties of arbitration practice in Washington previously was the lack of any statutory authority concerning consolidation. The new Act permits the court to “order consolidation of separate arbitration proceedings as to all or some of the claims” under certain circumstances. RCW 7.04A.100. This may be a double-edged sword: for example, in a construction case, subcontractors with a small claim may find themselves tied up in a large and complex case involving all the other contracting parties. However, the court “may not order consolidation of the claims of a party to an agreement to arbitrate that prohibits consolidation.”
Summary Judgment: A somewhat controversial feature of arbitration practice under the prior statute (and under the Federal Arbitration Act) has been the lack of any statutory authority for the arbitrator to summarily dispose of a case. This omission, coupled with the prior statute’s (and the federal statute’s) inclusion of “refusal to hear evidence pertinent and material to the controversy” in the rather short list of statutory grounds that may lead to vacatur of an award, caused many arbitrators to be more conservative than judges in reviewing motions for dismissal or summary judgment. The new statute essentially puts arbitrators on the same level as judges and gives the arbitrator broad power to “conduct the arbitration in such manner as the arbitrator considers appropriate so as to aid in the fair and expeditious disposition of the proceeding” and to decide a request for “summary disposition of a claim or particular issue.” RCW 7.04A.150. Although the new statute continues to list “refused to consider evidence material to the controversy” among the list of grounds for vacatur, RCW 7.04A.230(1)(c), this provision must now be read together with the new statute’s express authorization for summary judgment practice. We suspect that these provisions may prove to have considerable practical importance in future Washington arbitrations.
Discovery: Unlike the Federal Arbitration Act and the 1950’s-vintage Uniform Arbitration Act, Washington’s prior arbitration law gave the parties some discovery rights. See RCW 7.04.120 (depositions permitted); see also Balfour, Guthrie & Co. Ltd. v. Commercial Metals Co., 93 Wn.2d 199, 607 P.2d 856 (1980) (arbitrators should determine nature and scope of discovery). The new statute continues the prior statute’s grant of power to the arbitrator to issue subpoenas, including subpoenas for depositions. Compare RCW 7.04.110 with RCW 7.04A.170(1). Although the new act does not model the Washington or Federal civil rules’ panoply of specific discovery methods, it does expressly give the arbitrator power to (1) define and set parameters for discovery, including sanctions for violation of the tribunal’s discovery orders, and (2) issue protective orders to prevent the disclosure of privileged, confidential and trade secret information. RCW 7.04A.170(3), (4), (5), and (6). In this regard, the new state statute goes well beyond the discovery authorized in the federal act.
Remedies: The new statute confirms the authority of arbitrators to award a broad range of remedies, including perhaps some remedies that a court itself could not grant. RCW 7.04A.210. Neither prior Washington law nor the original UAA addressed the arbitrator’s power to award punitive damages, attorneys’ fees, or other exemplary relief. Under the new law, the arbitrator “may award punitive damages or other exemplary relief if such an award is authorized under the applicable law in a civil action involving the same claim and the evidence produced at the hearing justifies the award under the legal standards otherwise applicable to the claim.” Attorneys’ fees and arbitration expenses may also be awarded “if such an award is authorized by law in a civil action involving the same claim” or by the parties’ agreement. The WUAA expressly provides that the arbitrator may grant all other remedies, “just and reasonable under the circumstances of the arbitration” and the fact that a court could not, or would not, grant such a remedy is not a basis for refusal to confirm or to vacate the resulting award. Although prior Washington law did not expressly give arbitrators the right to do so, the drafters of the RUAA note that this section “preserves the traditional, broad right of arbitrators to fashion remedies.” The arbitrator must state in the award the bases in fact and law for any award of “punitive damages or other exemplary relief” and separately state the amount of punitive damages or other exemplary relief.
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In summary, Washington’s new arbitration statute contains a number of provisions that may lead to important changes for Washington attorneys representing clients in arbitrations – expanded access to emergency relief, new provisions governing consolidation of cases, an express authorization for summary judgment practice, discovery rights that go well beyond those available under the federal statute, expanded remedies, as well as a number of other features beyond the scope of this brief article. Although it is still too early to assess how the new statute will work out in practice, it is likely that some or all of these changes will be important for those who practice in this area.