Provides relative to arbitration awards and payment of attorney fees and costs. (8/1/12)
The enactment of SB 194 would alter state arbitration law pertaining specifically to construction contracts. It would enable arbitrators to determine how attorney fees and costs are allocated between parties, rather than defaulting to one party bearing all expenses. This shift could establish a precedent for how costs are evaluated in future arbitration cases, promoting a more balanced approach that could lead to fairer outcomes in construction disputes. By extending the possibility of apportionment to both parties, it enhances the viability of arbitration as a dispute resolution mechanism in this sector.
Senate Bill 194, introduced by Senator Appel, focuses on the regulation of arbitration awards related to construction contracts. The bill amends existing laws to clarify the conditions under which attorney fees and related costs can be apportioned in arbitration proceedings. Specifically, it allows for an equitable distribution of reasonable attorney fees and costs incurred by both parties involved in a construction contract arbitration. This change aims to facilitate a fairer resolution of disputes and enhance the efficacy of arbitration as a means of resolving construction-related conflicts.
The general sentiment regarding SB 194 appears to be supportive, particularly among proponents of improved arbitration practices. Advocates argue that equitable apportionment is a step toward addressing perceptions of imbalance in arbitration results, particularly for the party that may face significant costs. While specific dissenting viewpoints were not highlighted in the available discussion, any controversy around such adjustments typically stems from concerns about how costs could be awarded and the implications for smaller participants in construction contracts.
While the bill proposes a progressive change in arbitration practices, potential contention may arise regarding its application in different case contexts. Opponents may argue that allowing arbitrators to arbitrarily apportion costs could introduce uncertainty, leading to disputes over fairness in the apportionment process. Additionally, those with concerns about the independence and impartiality of arbitrators may see this as a potential conflict. Establishing clear guidelines for what constitutes 'reasonable' fees and costs will also be crucial in preventing disputes in future arbitration scenarios.