The Contractual Right to Arbitrate a Dispute Can be Waived
Arbitration is a form of dispute resolution. Instead of litigating your case in court with a judge, you arbitrate your case with an arbitrator. Arbitration is less formal and, ideally, the arbitrator will have more of a background relating to the issues driving the dispute. The parties either agree to an arbitrator or an arbitrator is appointed through a selection process. With everything, there are pros and cons to arbitration to be discussed in detail with your counsel. There are many disputes I prefer arbitration and there are many disputes I do not.
Arbitration is a creature of contract so if you are interested in arbitration as your form of dispute resolution then you need to include that in your contract. However, the contractual right to arbitration can be waived. Just because parties contractually agree to arbitrate a dispute is not an absolute — the right can be waived.
The right to arbitration, like any contract, can be waived. Waiver is the voluntary and relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right. The right to arbitration must be safeguarded by a party who seeks to rely upon that right, and the party must not act inconsistently with the right.
Ship IV Harbour Island, LLC v. Boylan, 44 Fla. L. Weekly D831a (Fla. 5th DCA 2019) (internal quotations and citations omitted).
One way a party can waive the right to arbitration is by filing a lawsuit (without a contemporaneous motion to compel arbitration) since filing the lawsuit, in of itself, is inconsistent with the party’s desire to arbitrate the dispute.
Another way a party can waive the right to arbitrate is by engaging in discovery in a litigation since this would be inconsistent with that party wanting to arbitrate the dispute. See Ship IV Harbour Island, supra (“[E]ngaging in merits discovery is inconsistent with an arbitration request and constitutes a waiver of the right to arbitration.”).
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.