In a pivotal legal development, California has ceased the practice of automatically staying litigation when orders denying motions to compel arbitration are appealed. This change that came into effect on October 10, 2023, is due to the signing into law of California Senate Bill No. 365 (SB365) by Governor Newsom.
As outlined by Ballard Spahr LLP, prior to this, California trial court proceedings were automatically stayed when a party appealed an order that rejected a motion to push for arbitration.
This development has significant implications for various stakeholders in California’s legal landscape, particularly for corporations, law firms, and other entities frequently involved in litigation and arbitration processes.
Lawyers, legal academics, and corporate professionals engaged in arbitration will need to reassess their strategies and prepare for this change in litigation proceedings in California. The termination of automatic stays in litigation proceedings may lead to various scenarios that require new legal solutions and approaches to manage effectively.
Tracking these changes in the legal atmosphere, particularly those related to arbitration, can be an essential part of navigating complexities in the field of law. For those involved in legal practice in California, comprehending the impacts of the SB365 is of utmost importance.
California’s recent shift signifies a crucial turning point, potentially leading to a reconsideration of arbitration strategies and approaches in other parts of the United States. It remains to be seen whether this development will influence arbitration and litigation arrangements in other jurisdictions.