Ruling Provides Certainty in Arbitration
Tampa Bay Business Journal, July 5, 2013 — A recent Florida Supreme Court decision is good news for the many businesses using arbitration to settle controversies with clients, vendors and others.
The court ruled that the state’s statute of limitations applies to arbitration just as it applies to court actions and proceedings.
The ruling evolved from a case involving Raymond James Financial Services and clients who contended a RJF manager made improper investment decisions years ago. The clients signed an arbitration agreement with the company when they became a client, which basically means a dispute is settled by going to arbitration instead of to the courts.
Tampa lawyer George Guerra, partner at Wiand Guerra King, who represented RJF before the high court, said the decision is beneficial for businesses.
“Arbitration clauses are becoming pretty commonplace for businesses,” he said. “The ruling gives those businesses the certainty of knowing they have protection from old claims coming back to haunt them. It also means arbitration remains a viable form of alternative dispute resolution.”
In arbitration, a third party or third parties, designated by the different sides in a business dispute, resolve the controversy outside of courts with a decision that is usually binding.
“Arbitration is cheaper and faster,” Guerra said. “There are a lot of reasons to go to arbitration. You can decide up front who decides the dispute, set the rules and the number of arbitrators.”
The issue of statutes of limitations applying to arbitration has been “swirling” nationwide. The way Florida’s statute is written says it applies to any action or proceeding, which includes arbitration, so the element of uncertainty is removed for businesses, he said.
“This decision impacts arbitrations of all kinds in any business sector,” Guerra said. “We encourage people not to sit on their rights.”
Tampa Bay Business Journal