Don’t Find Yourself SOL: Know Whether the Statute of Limitations Applies to Your Arbitration
This post has been viewed 3,230 times.
Statutes of limitations provide peace of mind for many attorneys and clients, knowing previous conduct cannot lead to liability after a prescribed time period. But, do statutes of limitations apply to arbitration proceedings? The answer is: not necessarily. Because of that, advocates and parties need to know when statutes of limitation may apply as well as how they can revise their arbitration clauses to avoid this confusion.
The benefits of applying the statute of limitations to arbitration procedures are clear. However, it is often unclear whether a state will apply a time bar to arbitration actions. Neither the Federal Arbitration Act (FAA) nor the Revised Uniform Arbitration Act (RUAA) has a statute of limitations, so the arbitrator must look to state law to apply a time bar. When drafting the arbitration clause, or preparing for arbitration, there are three sources to review to determine whether a statute of limitations applies:
- The state’s relevant statute of limitations, to see if it expressly applies to arbitration proceedings;
- The case law in the relevant jurisdiction, deciding whether the statute of limitations applies in arbitration; and
- The Uniform Commercial Code.
Tags:
