Arbitrating? Be Careful Out There
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Thanks to the National Arbitration Forum for passing this nugget along from a Texas Appellate Court -- nullifying the American Rule on attorneys fees in arbitration proceedings permitting the arbitrator to award "just and equitable relief."
Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008)
Where the rules of arbitration authorize the arbitrator to grant any "just and equitable" relief, the arbitrator may award attorney fees without any other contractual or statutory basis for the award, according to the Texas Court of Appeals. In light of the Court's holding, if parties select arbitration rules that permit any "just and equitable" relief, they are effectively opting out of the American Rule, which provides that parties are responsible for their own attorney fees in the absence of any contractual or statutory basis for shifting such fees.
In Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008), Thomas sued Providian, her former employer, for discrimination and assault and battery. Providian moved to compel arbitration pursuant to an arbitration agreement between the parties . . . continue reading here . . . .




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