Our court system is crowded, so people are turning to arbitration to solve their problems instead. It can be faster and cheaper, and it’s easier to enforce decisions in other countries. But there are still some issues that need to be worked out, like who pays the lawyers’ fees in arbitration. This article will explain the current situation and give some tips for lawyers dealing with this issue. Arbitrators in Florida have the authority to make decisions and resolve disputes according to the Florida Arbitration Code. If there is a written agreement that says disputes must be settled through arbitration, then the code and the Federal Arbitration Act apply. The act takes priority if both apply. As for attorney fees, the agreement or arbitration provision will determine if they are covered. In general, arbitrators’ expenses and fees are paid according to the arbitration award. Before 1991, some courts thought that a Florida law prohibited attorneys’ fees for arbitration. Then in 1990, a court said that the law doesn’t actually ban attorneys’ fees for time in arbitration. In 1991, the Florida Supreme Court confirmed that the law doesn’t stop people from getting attorneys’ fees for arbitration, but it does stop arbitrators from giving out those fees. Another court later said that parties can’t give arbitrators the power to decide on attorneys’ fees, only the circuit court can do that. In a legal case, different district courts in Florida disagreed on whether parties in an arbitration agreement can let the arbitrators decide on attorneys’ fees. The Florida Supreme Court eventually ruled that parties can agree to have arbitrators decide on attorneys’ fees, but if there’s a dispute about this agreement, only the trial court can decide. Since then, there haven’t been any new rulings on this issue. Two cases involving arbitration and attorneys’ fees were decided in Florida courts. In the first case, a claimant argued that the arbitrator had the authority to award fees, but the court ruled that only the circuit court had the power to do so. In the second case, a building supplier and general contractor were in a dispute, and the supplier claimed they were entitled to attorneys’ fees under a performance bond. The court had to determine if the supplier was the prevailing party in the arbitration. After a mediation hearing, Ceco was awarded relief and Gay got a credit against Ceco’s reward. Ceco wanted the arbitrator to say that they were the winning party, but the motion was denied. Both Ceco and Gay asked for legal fees in the court, and the court said that Ceco was the winning party and awarded them a lot of legal fees. Gay appealed, and the court then said that because Ceco asked the arbitrator to decide who was the winning party, they couldn’t ask the court to do it instead. So, since the arbitrator didn’t say Ceco was the winning party, they couldn’t get any legal fees. GCA, the construction company, filed a lawsuit to get paid for their work. The court told them to settle the dispute through arbitration instead. After arbitration, GCA asked the court to decide on their legal fees, but the other company disagreed. The court ruled that GCA can still ask for legal fees in court. In the first case, the court had to decide if arbitrators could award attorneys’ fees in a dispute between an investment firm and investors. The court said that both parties needed to agree to arbitration for the arbitrators to decide on attorneys’ fees. In the second case, the court had to decide if the arbitrators could deny attorneys’ fees for both parties in a dispute between an investment firm and an investor. The court said that because the parties didn’t agree to let the arbitrators decide on attorneys’ fees, the decision was up to the circuit court. The court dismissed Ruskin’s complaint, but said the arbitration panel shouldn’t have decided on attorney fees. The court also said Prudential and Ryan couldn’t get fees because they didn’t ask for them at the right time. The appeals court agreed that the arbitration panel shouldn’t have decided on attorney fees, and said Prudential and Ryan should have asked for fees earlier. One judge disagreed, saying it’s not fair to have to ask for fees during arbitration when the panel can’t decide on them. The courts have issued conflicting decisions on whether arbitrators or the circuit court have the authority to decide who gets attorneys’ fees in arbitration cases. This disagreement may lead to more confusion and legal battles in the future. Unless the Supreme Court steps in to address this issue, the conflict between the different districts will continue to cause uncertainty for parties involved in arbitration. Federal courts have similar but slightly different rules regarding attorneysâ fees in arbitration compared to Florida courts. In some cases, federal courts have allowed arbitrators to award attorneys’ fees if the arbitration agreement allows for all disputes to be decided by the arbitrators. However, there is still some debate over whether the trial court or the arbitrators should decide on attorneys’ fees in certain situations.
For attorneys, it’s important to remember that parties can set their own rules for arbitration in their agreements. This means they can agree on almost any procedure for resolving their disputes, as long as it’s not completely unreasonable. In order to avoid uncertainty over attorneys’ fees in arbitration, it’s important for lawyers to carefully write a provision in an agreement to address this issue. It’s also a good idea to include other arbitration issues in the agreement to avoid any future problems. However, it’s important to be specific when drafting the arbitration clause to avoid further legal issues and expenses. The parties agree to settle any disagreements through arbitration administered by an organization like the American Arbitration Association. If needed, each party will choose an arbitrator and those two will choose a third arbitrator. The decision made by the arbitrators must be followed, and it can be enforced in court. However, if someone needs temporary help from a court, like an injunction, they can still ask for it without giving up their right to arbitration. In order to make sure that arbitration is fair and effective for everyone involved, it’s important to have a tailored arbitration provision that meets the specific needs of the parties. This can include things like setting rules for gathering information, requiring mediation before arbitration, and deciding where arbitration will take place. It’s also important to have clear rules about attorney fees and costs. This helps avoid unnecessary disputes and keeps the arbitration process running smoothly. Overall, the goal is to make sure that arbitration is a fair and efficient way to resolve conflicts without having to go through a long and expensive court process. According to the First District court in Gay, when deciding who wins in arbitration, the arbitrators also have the power to decide on attorney fees. It makes sense to take the next step and say that under F.S. §682.11, arbitrators can also decide on attorney fees for arbitration. The Florida Supreme Court should agree with this and make it so that parties don’t have to agree to let arbitrators decide on attorney fees. Until the Supreme Court makes a decision, lawyers and parties to an agreement should include a provision in their contract that says any disagreements about attorney fees will be resolved through arbitration. This way, they can avoid going to court. Frank Nussbaum is a lawyer in Miami who has specialized in international law. He is certified to mediate civil and family disputes in the court system. This information is provided by the General Practice, Solo and Small Firm Section.
Source: https://www.floridabar.org/the-florida-bar-journal/arbitration-and-attorneys-fees-issues-an-attorneys-and-arbitrators-viewpoint/
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