Fiscal Note
BILL # SB 1046 TITLE: arbitrators; appointment requirements
SPONSOR: Kern STATUS: Senate Engrossed
PREPARED BY: Ryan Fleischman
REVISED
Description
The bill would require the Superior Courts' list of arbitrators to include any person who is qualified by training,
experience, or credential. The bill further specifies that the court may not require an attorney to serve as an arbitrator.
The Courts' Rules of Civil Procedure effectively limits arbitrators to attorneys at this time.
We have revised the Fiscal Note to incorporate a reference to the fiscal impact projection of the Administrative Office of
the Courts (AOC) and Maricopa County. We received this projection after publication of our original Fiscal Note.
Estimated Impact
We cannot determine if the bill would have a state fiscal impact. There could be a state cost if the elimination of
mandatory attorney participation in arbitrations reduces the pool of eligible arbitrators. There could also be no cost if the
expansion to non-lawyers generates sufficient numbers of qualified arbitrators.
AOC believes that the bill would reduce the number of eligible arbitrators and result in higher costs for counties.
Maricopa County also assumes that it would need to institute different procedures for resolving the cases that go through
arbitration in the Superior Court. Maricopa County recommends 4 options to replace the arbitration system, 3 of which
range in cost from $4.1 million to $4.8 million. Their analysis assumes that the expanded pool of qualified arbitrators
under SB 1046 would yield no eligible individuals. We lack sufficient information to evaluate the AOC and Maricopa
County perspectives.
Analysis
A.R.S. ยง 12-133 requires arbitration in all civil cases in which the Superior Court finds, or the parties agree, that the
amount in question does not exceed the jurisdictional limit (established by each county, but not to exceed $65,000).
Statute requires the Superior Court in each county to maintain a list of eligible arbitrators to settle disputes under the
jurisdictional limit. Arizona's Rules of Civil Procedure (Rule 73) requires that the list of eligible arbitrators include all
attorneys in the county who have been active members of the State Bar of Arizona for at least 4 years, all other State Bar
members that have agreed to serve as arbitrators in that county, and all members of any other federal court or other
state bar who have agreed to serve as arbitrators in that county. The clerk of the court is required to select an arbitrator
from the list at random. Statute requires that arbitrators be paid a "reasonable sum" not to exceed $140 per day paid by
county General Fund revenues.
According to data provided by Maricopa County, there were a total of 26,901 new civil case filings in Maricopa County
Superior Court in FY 2022, 10,870 of which were placed in mandatory arbitration. The court appointed 3,685 arbitrators
who each heard an average of 3 arbitrations in FY 2022. Maricopa County anticipates that no current arbitrators would
continue to participate under this bill.
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Maricopa County assumes that they would need to institute different procedures for resolving civil cases currently
handled by arbitrators. Maricopa County provided 4 potential scenarios and the associated cost. Of those, 3 range in cost
from $4.1 million to $4.8 million and include either adding new judgeships, commissioners or staff attorneys to replace
arbitrators. A fourth option is estimated to cost $13.8 million on a new "contract attorney program." We lack sufficient
information to evaluate the potential need for and details of these alternatives to the current system.
3/9/23