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Trial Lawyers Oppose Uniform Arbitration Act (UAA) in Pennsylvania

Tuesday, April, 2, 2013

The Pennsylvania Bar Association is one of many entities on board for the state’s consideration of passing legislation aimed at reorganizing arbitration laws within Pennsylvania.  Although the Bar Association is for it, Pennsylvania Association for Justice, a lobbying group for trial lawyers, isn’t. 

Since arbitration has been celebrated as an alternative dispute resolution forum that avoids the cost of litigation, trial lawyers and their lobbying organizations often are not the happiest about expanding citizens’ access to arbitration in place of litigation.   The legislative reform occurring in Pennsylvania is part of a larger reform sweeping the nation, as states are encouraging their legislator to pass the Uniform Arbitration Act (UAA) aimed at setting uniform statutes and standards for arbitration across the country.  Sixteen states across the nation have already passed legislation to adopt the UAA.  Currently, in addition to Pennsylvania, three more states are considering it—Florida, West Virginia and Massachusetts. 

One part of the Act that has many trial lawyers concerned is the provision that when a court orders compliance with an arbitration award, they can require that the prevailing party be paid the associated attorneys’ fees and costs of litigation.  This “loser pays” system helps to maintain a balance and ensures that the party not receiving an award doesn’t ignore the arbitrator’s decision or start filing frivolous lawsuits against the party who did receive the award.  In such circumstances, the party that has lost will risk the responsibility of all costs associated with that decision. 

The Act would also insure that the judgments given by neutral, third party arbitrators are upheld in state courts across Pennsylvania or other states that have adopted the UAA legislation.  In such, it mirrors the “strong federal policy” that is reflected and enforced by the Federal Arbitration Act of 1925.  The Federal Arbitration Act (FAA) has also been recently reiterated by the U.S. Supreme Court.