arbitration; deposits
SB1344 requires an appellant, when appealing an arbitration ruling to superior court, to receive a judgment in superior court that is at least 25% more favorable than the relief granted by arbitration in order for the appellant to get back its deposit.
Currently,
as a condition of appealing the arbitration ruling to superior court, the
appellant must deposit up to 10% of the amount in controversy with the
court. The court shall refund the
deposit if the judgment of the superior court is at least 10% more favorable
than the relief granted by the arbitrator.
Arizona law authorizes the superior court to require
mandatory arbitration for civil cases where the amount in controversy is
$50,000 or less (§12-133(A)).
In 1999, 6,017 cases were placed into arbitration in
Maricopa County. There were 1,700
arbitration awards. Parties filed
appeals in 852 cases, which resulted in 166 trials.
A party may appeal the arbitration ruling by filing
a demand for a trial de novo to the
superior court. As a condition of
filing the appeal, the party shall deposit an amount equal to the compensation
paid to the arbitrator, but not to exceed 10% of the amount in
controversy. If the appellant fails to
receive an award that is 10% more favorable than the arbitration ruling, the
appellant loses the deposit.
There are several purposes for the deposit:
a.
To
reimburse the county to cover the cost of the arbitrator;
b.
To
pay the appellee’s reasonable attorneys fees the appellee incurs in the appeal;
and
c.
To
cover the expense of any expert witness incurred by the appellee in the appeal.
Plaintiff (P) sues Defendant (D) for $10,000.
Arbitrator awards P $5,000.
P appeals to superior court and deposits 10% of the
amount in controversy.
In order for P to get back its deposit, superior
court must award P at least $5,500.
SB1344 would
require P to receive at least $6,250 in order to receive its deposit.