Is the Revised Uniform Arbitration Act a Good Fit for Alaska?

• Citation: Vol. 19
• Publication year: 2002

§ 19 Alaska L. Rev. 339. IS THE REVISED UNIFORM ARBITRATION ACT A GOOD FIT FOR ALASKA?

Alaska Law Review
Volume 19
Cited: 19 Alaska L. Rev. 339

IS THE REVISED UNIFORM ARBITRATION ACT A GOOD FIT FOR ALASKA?

CARL H. JOHNSON, PETE D.A. PETERSEN ^{[*] [**]}

I. INTRODUCTION

II. AN ARBITRATION PRIMER: THE ORIGINAL UNIFORM ARBITRATION ACT AND JURISPRUDENTIAL ATTEMPTS TO FILL ITS VOIDS

A. Brief History of Arbitration

B. Primary Issues Addressed in Court Decisions Regarding the UAA

III. ADOPTION OF THE REVISED UNIFORM ARBITRATION ACT: CODIFYING THE COMMON LAW

A. New Provisions

B. Clarifying Provisions

IV. ALASKA'S ARBITRATION LAW AND THE RUAA

A. Review of Alaska Law

B. Comparing Key RUAA Provisions to Alaska's Common Law

V. CONCLUSION AND RECOMMENDATIONS

FOOTNOTES

This Article considers the suitability of the Revised Uniform Arbitration Act (RUAA) for adoption by the State of Alaska. The Article provides background information on the history of alternative dispute resolution in Alaska, including the use and development of arbitration, and discusses the main issues that have been litigated both in Alaska courts and across the country with respect to the original Uniform Arbitration Act. The Authors provide a detailed review of the changes and clarifications included in the RUAA and conclude that the RUAA should be adopted by Alaska, as it is consistent with state case law and promotes Alaska's oft-stated goal of facilitating efficient and effective methods of alternative dispute resolution.

I. INTRODUCTION

Long before the advent of the court system and the now familiar practice of litigation, people were required to resolve their disputes among themselves. ^[1] There were no bureaucracies, judici- [*pg 340] aries, or other government officials resolving their disputes for them. All issues were handled locally. Eventually, this private method of dispute resolution was replaced with one where third parties, sometimes judges, sometimes panels of "peers," decided how disputes would be handled. These anonymous third parties became the arbiters of the fate of the parties before them. In recent decades, the American trend has been to lean more favorably once again toward these private roots of dispute resolution, ^[2] toward various alternative dispute resolution (ADR) methods, and particularly toward arbitration. ^[3]

[*pg 341]

The earliest state-promulgated experiments with ADR mechanisms in Alaska came in the form of conciliation boards in rural areas. Between 1975 and 1977, the Alaska court system used federal funds to create and evaluate conciliation boards in six southwestern Alaska villages. ^[4] The Standing Advisory Committee on Mediation (Committee), created by the Alaska Supreme Court in 1991, currently works to establish and improve the use of ADR by the Alaska Court System. ^[5] The Committee, in conjunction with the Alaska Judicial Council, made the recommendations that eventually led to the adoption of the current version of Civil Rule 100 by the Alaska Supreme Court in 1993. ^[6] While the rule focuses on mediation as the primary ADR mechanism, ^[7] it also suggests that [*pg 342] other forms of ADR, such as early neutral evaluation and arbitration, may be used in the alternative. ^[8]

In addition to these general ADR efforts, Alaska has focused on developing arbitration as a viable ADR option. The Alaska legislature adopted the original 1955 Uniform Arbitration Act (UAA) ^[9] in 1968, ^[10] amending it in 1972. ^[11] In 1974, the Alaska Supreme Court adopted mandatory fee arbitration rules for attorney fee disputes. ^[12] The Alaska Bar Association originally proposed these rules, requesting that the court adopt them. ^[13]

After adopting the UAA, the Alaska legislature has largely left the task of shaping Alaska's arbitration law or, more accurately, filling in the voids of the original UAA, to the Alaska Supreme Court. The Alaska courts have not been alone in attempting to plug the holes in the original UAA. The court systems for the vast majority of jurisdictions that have adopted the UAA ^[14] have engaged in routine battles over such issues as the arbitrability of particular disputes, the procedures employed by arbitrators, the remedies arbitrators may award, and the reviewability of those decisions by state courts. ^[15] In an effort to clarify, codify, and improve [*pg 343] the body of law on arbitration, the National Conference of Commissioners on Uniform State Laws (NCCUSL) adopted a Revised Uniform Arbitration Act (RUAA) in August 2000. ^[16]

This Article provides background material on the primary issues that have been litigated regarding the gaps in the original UAA and the codification of that law in the RUAA. It also discusses whether the principles adopted in the RUAA are a good fit under Alaska Supreme Court case law. Part I provides background information on the Federal Arbitration Act (FAA), the UAA, and how courts have addressed many of the issues that have developed in arbitration. Part II highlights the key provisions of the RUAA that clarify the original act. Part III discusses how many of these issues have been addressed by the Alaska Supreme Court and compares the court's precedent to the solutions offered in the Revised Act. The Article concludes that the RUAA is consistent with Alaska case law and recommends that the Alaska legislature adopt the RUAA in substantial form to solidify arbitration law in Alaska and bring the state in line with arbitration developments currently underway across the nation.

II. AN ARBITRATION PRIMER: THE ORIGINAL UNIFORM ARBITRATION ACT AND JURISPRUDENTIAL ATTEMPTS TO FILL ITS VOIDS

Arbitration and other ADR processes have become widely accepted and are being used in an increasing number of sectors, including commercial, insurance, employment, and family relationships. The centerpieces of arbitration are rooted in the FAA, enacted in 1925, and the model UAA, created in the 1950s and adopted by a majority of the states. ^[17]

A. Brief History of Arbitration

Until the early twentieth century, the common law did not look favorably upon arbitration. Courts had historically refused to enforce arbitration agreements, likely due to a jealous guarding of their own power to resolve disputes. ^[18] Critics complained that arbitration was susceptible to unjust results, making it easy for a [*pg 344] stronger party to take advantage of a weaker party. ^[19] Nevertheless, in 1920, New York became the first state to enact an arbitration statute. ^[20]

The general opposition to arbitration diminished greatly with the enactment of the FAA in 1925. ^[21] The FAA sought to place arbitration agreements on the same level of enforceability as contracts, noting that such agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." ^[22] Early U.S. Supreme Court case law stressed that the FAA created a strong presumption in favor of arbitrability of disputes. ^[23] With the adoption of the FAA, courts could no longer refuse to enforce arbitration agreements. ^[24]

The UAA was completed by the NCCUSL in 1954 and approved in 1955. ^[25] Commentators have hailed the UAA as "one of the most successful Acts" ever promulgated by NCCUSL. ^[26] Decisions by the U.S. Supreme Court in the 1980s further contributed to a boom in the use of arbitration in commercial disputes. ^[27]

Court-ordered arbitration, unlike other forms of ADR, has been subjected to systematic empirical study for more than a decade. At first, researchers assessed the value and effectiveness of arbitration by comparing arbitrations to traditional jury or bench trials. They found that arbitration hearings, on average, were shorter than trials, involved less attorney preparation time, cost courts and private litigants less, and required less time in the [*pg 345] schedule queue. ^[28] Later research focused on the effects of arbitration on case processing and settlement behavior, concluding that, in general, arbitration programs do not divert cases from trial, but instead provide an alternative forum for cases that would have otherwise settled without a hearing. ^[29] Generally, litigants and their attorneys have reported high levels of satisfaction with the arbitration process and its results, regardless of whether they won or lost. ^[30] Arbitration has become the primary method to resolve disputes in many areas of the law. ^[31]

B. Primary Issues Addressed in Court Decisions Regarding the UAA

The UAA failed to provide for many issues that are commonly addressed in the realm of traditional courtroom dispute resolution. These unresolved issues include procedural issues such as consolidation and intervention and remedy-related issues such as attorney's fees and punitive damages. Thus, the courts have been left to decide whether such procedural or remedial options exist under the UAA. Since so much has been previously written on these major points, this subsection will provide only a brief overview of the major issues that have been subject to litigation under the original UAA.

1. Arbitrability. Challenges over what disputes are covered by an arbitration agreement frequently fill the dockets of state and federal courts. The matter typically at issue is whether a particular dispute is covered by the language of an arbitration agreement. Generally speaking, if the arbitration...