Chapter 2 - § 2.4 • PUBLIC POLICY AND THE COMMON LAW OF ARBITRATION

• Jurisdiction: Colorado

§ 2.4 • PUBLIC POLICY AND THE COMMON LAW OF ARBITRATION

Arbitration is a very long and well-established method of dispute resolution. George Washington reputedly had an arbitration clause in his will. Alexander Hamilton is said to have generally favored arbitration or amicable settlement in lieu of lawsuits.²¹ However, at common law in most jurisdictions, arbitration agreements were not enforceable, although that was not true under Colorado common law.²²

CRUAA

In Coors Brewing Co. v. Cabo,²³ the Colorado Court of Appeals stated that the "CUAA [Colorado Uniform Arbitration Act] is in derogation of common law and must be strictly construed."²⁴ But, it is suggested that the arbitration statutes are not in derogation of Colorado common law, and these statutes should not be strictly construed.

At least since 1861, the policy of the Territory and State of Colorado has been to foster and encourage arbitration as a method of dispute resolution, and all disagreements as to whether a dispute is arbitrable are to be resolved in favor of arbitration.²⁵ See § 1.6.

On the other hand, the Colorado Court of Appeals has defined the purpose of the Colorado Uniform Arbitration Act as "to provide a uniform statutory framework for arbitration and to encourage settlement of disputes through the arbitration process."²⁶

FAA

As reflected in the FAA, federal law also establishes a strong policy favoring arbitration.²⁷ Public policy in Colorado also strongly encourages the resolution of disputes through arbitration.²⁸ "A broad or unrestricted arbitration clause makes the 'strong presumption favoring arbitration [apply] with even greater force.'"²⁹ Any state law relative to arbitration will not take precedence over the federal policy when the federal act is applicable.³⁰ Failure to follow the mandates of a valid alternative dispute resolution clause will contravene that policy.

As a result of this state and federal public policy, when issues involved in arbitration are presented to a court, the starting point is a public policy in favor of the arbitration process.³¹

The U.S. Supreme Court has repeatedly observed that the achievement of "finality" (a word that is often used in the arbitration context as a synonym for "efficiency") is not the primary policy underlying the FAA. Rather, the primary policy underlying the FAA is the enforcement of the parties' agreement to arbitrate. In Dean Witter Reynolds, Inc. v. Byrd,³² the Court stated:

The legislative history of the [FAA]

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