BILL NUMBER: AB 1093 CHAPTERED
BILL TEXT
CHAPTER 445
FILED WITH SECRETARY OF STATE SEPTEMBER 24, 1997
APPROVED BY GOVERNOR SEPTEMBER 23, 1997
PASSED THE ASSEMBLY AUGUST 28, 1997
PASSED THE SENATE AUGUST 12, 1997
AMENDED IN SENATE JULY 31, 1997
AMENDED IN SENATE JULY 9, 1997
INTRODUCED BY Committee on Judiciary (Escutia (Chair), Morrow (Vice
Chair), Alby, Aroner, Baugh, Figueroa, Keeley, Kuehl, Ortiz, Pacheco,
Shelley, and Villaraigosa)
FEBRUARY 27, 1997
An act to amend Sections 1281.6, 1281.9, 1282, and 1286.2 of the
Code of Civil Procedure, relating to arbitration.
LEGISLATIVE COUNSEL'S DIGEST
AB 1093, Committee on Judiciary. Arbitration.
Existing law governing the enforcement of arbitration agreements
provides that, except as specified, in any arbitration pursuant to an
arbitration agreement involving a claim for damages when a person is
proposed for nomination or appointment to serve as a neutral
arbitrator, as specified, that person shall disclose, within 10 days
of service of notice of the proposed nomination or appointment, to
all parties, certain information concerning the names of prior or
pending cases arbitrated by that proposed arbitrator. Existing law
provides for the disqualification of a proposed nominee or appointee,
as prescribed.
This bill would revise and recast these provisions by, among other
things, revising the procedures relating to the disqualification of
a neutral arbitrator, as specified and revising the contents of a
required notice.
This bill would also make conforming changes.
The bill would also incorporate changes to Section 1286.2 of the
Code of Civil Procedure proposed by SB 19, contingent upon its prior
enactment.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1281.6 of the Code of Civil Procedure is
amended to read:
1281.6. If the arbitration agreement provides a method of
appointing an arbitrator, that method shall be followed. If the
arbitration agreement does not provide a method for appointing an
arbitrator, the parties to the agreement who seek arbitration and
against whom arbitration is sought may agree on a method of
appointing an arbitrator and that method shall be followed. In the
absence of an agreed method, or if the agreed method fails or for any
reason cannot be followed, or when an arbitrator appointed fails to
act and his or her successor has not been appointed, the court, on
petition of a party to the arbitration agreement, shall appoint the
arbitrator.
When a petition is made to the court to appoint a neutral
arbitrator, the court shall nominate five persons from lists of
persons supplied jointly by the parties to the arbitration or
obtained from a governmental agency concerned with arbitration or
private disinterested association concerned with arbitration. The
parties to the agreement who seek arbitration and against whom
arbitration is sought may within five days of receipt of notice of
the nominees from the court jointly select the arbitrator whether or
not the arbitrator is among the nominees. If the parties fail to
select an arbitrator within the five-day period, the court shall
appoint the arbitrator from the nominees.
All neutral arbitrators shall comply with the requirements of
subdivision (a) of Section 1297.121, which requirements shall apply
to every agreement to arbitrate pursuant to this title.
SEC. 2. Section 1281.9 of the Code of Civil Procedure is amended
to read:
1281.9. (a) In any arbitration pursuant to an arbitration
agreement, when a person is to serve as a neutral arbitrator, subject
only to the disclosure requirements of law, the proposed neutral
arbitrator shall disclose in writing within 10 calendar days of
service of notice of the proposed nomination or appointment, to all
parties, all of the following:
(1) The names of the parties to all prior or pending noncollective
bargaining cases in which the proposed neutral arbitrator served or
is serving as a party arbitrator for any party to the arbitration
proceeding or for a lawyer for a party and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties' attorneys and the amount of monetary damages awarded, if
any. In order to preserve confidentiality, it shall be sufficient to
give the name of any party who is not a party to the pending
arbitration as "claimant" or "respondent" if the party is an
individual and not a business or corporate entity.
(2) The names of the parties to all prior or pending noncollective
bargaining cases involving any party to the arbitration or lawyer
for a party for which the proposed neutral arbitrator served or is
serving as neutral arbitrator, and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties' attorneys and the amount of monetary damages awarded, if
any. In order to preserve confidentiality, it shall be sufficient to
give the name of any party not a party to the pending arbitration as
"claimant" or"respondent" if the party is an individual and not a
business or corporate entity.
(3) Any attorney-client relationship the proposed neutral
arbitrator has or had with any party or lawyer for a party to the
arbitration proceeding.
(4) Any professional or significant personal relationship the
proposed neutral arbitrator or his or her spouse or minor child
living in the household has or has had with any party to the
arbitration proceeding or lawyer for a party.
(b) A proposed neutral arbitrator shall be disqualified if he or
she fails to comply with subdivision (a) and any party entitled to
receive the disclosure serves a notice of disqualification within 15
calendar days after the proposed nominee or appointee fails to comply
with subdivision (a). A proposed neutral arbitrator shall be deemed
to have complied with subdivision (a) with respect to any
arbitration commenced prior to January 1, 1995, if the person
declares in writing that he or she has disclosed all required
information pertaining to those arbitrations within his or her
knowledge or possession and has made a good faith effort to obtain
the required information from any arbitration service administering
those prior cases.
(c) (1) If the proposed neutral arbitrator complies with
subdivision (a), the proposed neutral arbitrator shall be
disqualified on the basis of the disclosure statement after any party
entitled to receive the disclosure serves a notice of
disqualification, within 15 calendar days after service of the
disclosure statement.
(2) A party shall have the right to disqualify one court-appointed
arbitrator without cause in any one arbitration, and may petition
the court to disqualify a subsequent appointee only upon a showing of
cause.
(d) The right of a party to disqualify a proposed neutral
arbitrator pursuant to this section shall be waived if the party
fails to serve the notice pursuant to the times set forth in this
section, unless the proposed nominee or appointee makes a material
omission or material misrepresentation in his or her disclosure. In
no event may a notice of disqualification be given after a hearing of
any contested issue of fact relating to the merits of the claim or
after any ruling by the arbitrator regarding any contested matter.
Nothing in this subdivision shall limit the right of a party to
vacate an award pursuant to Section 1286.2, or to disqualify an
arbitrator pursuant to any other law or statute.
(e) An arbitrator shall disclose to all parties the existence of
any grounds specified in Section 170.1 for disqualification of a
judge; and, if any such ground exists, shall disqualify himself or
herself upon demand of any party made before the conclusion of the
arbitration proceeding. However, this subdivision does not apply to
arbitration proceedings conducted under a collective bargaining
agreement between employers and employees or their respective
representatives.
(f) For purposes of this section, "lawyer for a party" includes
any lawyer or law firm currently associated in the practice of law
with the lawyer hired to represent a party.
(g) For purposes of this section, "prior cases" means
noncollective bargaining cases in which an arbitration award was
rendered within one of the following time periods:
(1) Three years prior to the date of the proposed nomination or
appointment if the proposed nomination or appointment occurs on or
between January 1, 1995, and December 31, 1995.
(2) Four years prior to the date of the proposed nomination or
appointment if the proposed nomination or appointment occurs on or
between January 1, 1996, and December 31, 1996.
(3) Five years prior to the date of the proposed nomination or
appointment if the proposed nomination or appointment occurs on or
after January 1, 1997.
(h) For purposes of this section, "any arbitration" does not
include an arbitration conducted pursuant to the terms of a public or
private sector collective bargaining agreement.
SEC. 3. Section 1282 of the Code of Civil Procedure is amended to
read:
1282. Unless the arbitration agreement otherwise provides, or
unless the parties to the arbitration otherwise provide by an
agreement which is not contrary to the arbitration agreement as made
or as modified by all of the parties thereto:
(a) The arbitration shall be by a single neutral arbitrator.
(b) If there is more than one arbitrator, the powers and duties of
the arbitrators, other than the powers and duties of a neutral
arbitrator, may be exercised by a majority of them if reasonable
notice of all proceedings has been given to all arbitrators.
(c) If there is more than one neutral arbitrator:
(1) The powers and duties of a neutral arbitrator may be exercised
by a majority of the neutral arbitrators.
(2) By unanimous agreement of the neutral arbitrators, the powers
and duties may be delegated to one of their number but the power to
make or correct the award may not be so delegated.
(d) If there is no neutral arbitrator, the powers and duties of a
neutral arbitrator may be exercised by a majority of the arbitrators.
SEC. 4. Section 1286.2 of the Code of Civil Procedure is amended
to read:
1286.2. Subject to Section 1286.4, the court shall vacate the
award if the court determines any of the following:
(a) The award was procured by corruption, fraud or other undue
means.
(b) There was corruption in any of the arbitrators.
(c) The rights of the party were substantially prejudiced by
misconduct of a neutral arbitrator.
(d) The arbitrators exceeded their powers and the award cannot be
corrected without affecting the merits of the decision upon the
controversy submitted.
(e) The rights of the party were substantially prejudiced by the
refusal of the arbitrators to postpone the hearing upon sufficient
cause being shown therefor or by the refusal of the arbitrators to
hear evidence material to the controversy or by other conduct of the
arbitrators contrary to the provisions of this title.
(f) An arbitrator making the award was subject to disqualification
upon grounds specified in Section 1281.9, but failed upon receipt of
timely demand to disqualify himself or herself as required by that
provision. However, this subdivision does not apply to arbitration
proceedings conducted under a collective bargaining agreement between
employers and employees or between their respective representatives.
SEC. 5. Section 1286.2 of the Code of Civil Procedure is amended
to read:
1286.2. Subject to Section 1286.4, the court shall vacate the
award if the court determines any of the following:
(a) The award was procured by corruption, fraud or other undue
means.
(b) There was corruption in any of the arbitrators.
(c) The rights of the party were substantially prejudiced by
misconduct of a neutral arbitrator.
(d) The arbitrators exceeded their powers and the award cannot be
corrected without affecting the merits of the decision upon the
controversy submitted.
(e) The rights of the party were substantially prejudiced by the
refusal of the arbitrators to postpone the hearing upon sufficient
cause being shown therefor or by the refusal of the arbitrators to
hear evidence material to the controversy or by other conduct of the
arbitrators contrary to the provisions of this title.
(f) An arbitrator making the award was subject to disqualification
upon grounds specified in Section 1281.9, but failed upon receipt of
timely demand to disqualify himself or herself as required by that
provision. However, this subdivision does not apply to arbitration
proceedings conducted under a collective bargaining agreement between
employers and employees or between their respective representatives.
(g) As provided in Section 1286.5.
SEC. 6. Section 5 of this bill incorporates amendments to Section
1286.2 of the Code of Civil Procedure proposed by both this bill and
SB 19. It shall only become operative if (1) both bills are enacted
and become effective on or before January 1, 1998, (2) each bill
amends Section 1286.2 of the Code of Civil Procedure, and (3) this
bill is enacted after SB 19, in which case Section 4 of this bill
shall not become operative.