The Californian Governor Gavin Newsom has approved a measure geared towards halting arbitration delay strategies. Based on the newly enacted bill S.B. 365, companies and employers situated in California will no longer automatically receive stays on orders while they appeal a denial or dismissal of a motion to compel arbitration. The decision was delivered earlier this week, marking a significant shift in the state’s arbitration policy and potentially transforming how companies handle arbitration procedures in the state.
The move is seen as a decisive action to curtail delay tactics in the context of arbitration, a controversial issue that has caused a rift in legal circles. Arbitration, by nature, is aimed towards providing a quicker, more efficient way for litigants to resolve their disputes outside the court. However, it’s been noted that some entities have attempted to, controversially, extend the arbitration process by filing appeals for denial or dismissal of a motion to compel arbitration.
The new bill counters this by preventing the automatic stay on orders, thereby potentially limiting such delay tactics. It marks a significant change from the erstwhile norm wherein businesses could automatically enjoy a prolongation of the decision-making process while filing an appeal. The latest action from the government of California is likely to prompt a re-evaluation of arbitration strategies among the state’s businesses, particularly those frequently engaged in such legal proceedings.
For additional details about S.B. 365 and its implications, you might find it helpful to refer to the full article posted on Bloomberg Law.