Pay Your Arbitration Fees On Time
Parties often agree to arbitration, because they hope that it will be faster, less expensive, simpler and less formal, or some combination of those reasons. If arbitration was agreed to in a contract before any dispute arose, then when a dispute arises, one of the parties might decide it does not want arbitration. For some reason, it might prefer the application of the rules of evidence in order to keep some adverse evidence out of the proceedings. It might want the option of appealing an adverse decision that it believes is an error. It might want a jury.
Arbitration is considered less formal and technical than court proceedings. In many ways, that is true. In some ways, the statutes and rules applicable to arbitrations are inflexible. One of those is the timely payment of fees. In the recent case of Doe v. Na Hoku, Inc., (09/28/23, 1st Dist.), the Court of Appeal re-affirmed, again, the rule that arbitration fees must be paid timely. Code of Civil Procedure section 1281.98(a)(1) provides that arbitration fees and costs must be paid within 30 days after the due date.
In Doe and several prior cases relied on in Doe, payment was mailed before the expiration of 30 days after the due date, but was not delivered until after the 30 days expired. In each case, the Court of Appeal held that late payment, even only a day or two late, allowed the other side to elect to refuse arbitration. This deadline was not subject to any substantiality, materiality, prejudice or balancing-of-burdens rule which might allow a late party to avoid the impact of paying late. Representing yourself and not being represented by an attorney is not a defense to being late.
One of the reasons to elect arbitration is to avoid the cost of employing an attorney to represent you. If you don’t have an attorney, be sure to read all the rules of the company administering the arbitration. Some of those rules are inflexible. You do not want to lose the right to have your dispute decided by the faster and less expensive process of arbitration, because you failed to follow the rules.
If you want arbitration, do not be late paying your arbitration fees.
If you have questions regarding the pros and cons of including a mandatory arbitration in your contract, or other questions regarding arbitration, please email [email protected] or call us at 510-286-2200.