FINALLY, A CASE THAT HOLDS THAT ARBITRATION IS NOT ALLOWED

Arbitration has its advocates, but I am not one of them. The judicial system in Tennessee provides most litigants with a fair and speedy disposition. Moreover, the judicial system provides a system for appeal and reconsideration. Arbitration does not. Often, even the best judges make mistakes of law or even in findings of fact. The arbitration process does not allow for that “further review.”

In Tennessee, the courts almost uniformly compel arbitration any time that the agreement provides for arbitration. In Tuetken v. Tuetken, W2008-00274-SC-R11-CV (Sept. 22, 2010), the Tennessee Supreme Court issued an opinion that gives a small victory to non-arbitration enthusiasts. In Tuetken, the court held that the parties could not agree, and the courts could not enforce, an agreement in a divorce proceeding to submit parenting issues to binding arbitration.

But the Court went further. The Court held that the parties in an arbitration proceeding cannot agree to change or modify the review procedures of the Tennessee Uniform Arbitration Act. So, even if the parties want the court to have the ability to provide “further review,” the court cannot exercise that authority. But, that is not all. The Court said that because the agreement to arbitrate was based upon the parties’ intent to give the court this expanded review authority, the agreement to arbitrate was invalid.

THE MORAL OF THIS STORY: If the other side insists on arbitration, insist that the agreement be tied to modifying the scope of appeal to the court to include a “do over.” Either the arbitration provision will be invalid or you may actually obtain a fair review.