05/13/2003 02:20 PM Senate L&C

             HB  83-REVISED UNIFORM ARBITRATION ACT                                                                         
                                                                                                                                
CHAIR BUNDE announced HB 83 to be up for consideration.                                                                         
                                                                                                                                
MS. LISA  WEISSLER, staff to  Representative Berkowitz,  said the                                                               
Revised  Uniform  Arbitration  Act   was  adopted  in  1968.  She                                                               
explained that  arbitration is essentially private  resolution of                                                               
a dispute;  it's a  voluntary process  and provides  a relatively                                                               
speedier,  lower  cost  and more  efficient  means  of  resolving                                                               
disputes. The uniform  acts around the entire country  need to be                                                               
revised because there  is an increasing use of  arbitration and a                                                               
variety of  issues have come  up that  were not addressed  by the                                                               
original  act. The  revised act  seeks to  address some  of those                                                               
issues.                                                                                                                         
                                                                                                                                
The National  Conference of Commissioners  on Uniform  State Laws                                                               
drafted the act that is the  basis for this legislation and HB 83                                                               
essentially follows  what they have recommended.  Grant Callow is                                                               
the  Alaska  representative on  the  Conference  and can  provide                                                               
testimony  on this  issue. Representative  Berkowitz is  bringing                                                               
this forward on behalf of the Commission.                                                                                       
                                                                                                                                
MR.  GRANT   CALLOW,  Alaskan  member,  National   Conference  of                                                               
Commissioners on  Uniform State  Laws, said  he practices  law in                                                               
Anchorage.  This act  was  drafted  by the  Commission  and is  a                                                               
revision of the  original act that was created in  1955. It is an                                                               
update  of the  Uniform Arbitration  Act, because  of changes  in                                                               
procedure.  It also  takes into  account certain  court decisions                                                               
and  other issues  that came  up over  the years  and need  to be                                                               
addressed. Those  can best be  addressed in a revision  that will                                                               
make revisions uniform across the states.                                                                                       
                                                                                                                                
He  explained that  new procedures  have  been incorporated  that                                                               
allow  more   flexibility  in  terms  of   how  arbitrations  are                                                               
conducted -  for instance, when  multiple arbitrations  are going                                                               
on  involving similar  issues arriving  from similar  events like                                                               
contract interpretations,  the revised  act, among  other things,                                                               
allows all  those to be  consolidated. This is  important because                                                               
the number of disputes to be  resolved by arbitration seems to be                                                               
growing yearly  by significant amounts.  If more disputes  can be                                                               
resolved privately through arbitration  instead of in the courts,                                                               
the reduction in the caseload  will have a positive fiscal impact                                                               
on the state.                                                                                                                   
                                                                                                                                
He  highlighted one  of  the revisions  that  provides that  [the                                                               
uniform act]  is a default  act and  that most of  its provisions                                                               
may be  waived by  contract, but there  are some  provisions that                                                               
may not  be waived or varied.  Those include the basic  rule that                                                               
any agreement  to submit  a dispute to  arbitration is  valid and                                                               
that  the rules  that govern  disclosure  of facts  by a  neutral                                                               
arbitrator  are   in  place.  In  addition,   rules  guaranteeing                                                               
enforcement  of an  appeal of  the act  cannot be  waived and  an                                                               
arbitration decision in a court cannot be waived.                                                                               
                                                                                                                                
MR. CALLOW said it also sets  forth standards for when awards can                                                               
be vacated  and allows  the court  to order  provisional remedies                                                               
during  the  course  of  arbitration   before  an  arbitrator  is                                                               
selected.  That is  important because  it  prevents parties  from                                                               
delaying the  selection of  an arbitrator in  order to  delay the                                                               
proceedings and  somehow dissipate  the effect of  an arbitration                                                               
award.                                                                                                                          
                                                                                                                                
MR.  CALLOW  explained this  bill  also  addresses the  issue  of                                                               
arbitrators'  immunity to  civil liability.  Judges, unless  they                                                               
perpetrate some  kind of fraud,  are immune from  civil liability                                                               
for their decision-making and that  wasn't made clear in the 1955                                                               
act. The  upshot of  that is  in some  circumstances, arbitrators                                                               
have been  sued for  no good  reason. In  most cases  those suits                                                               
don't go  anywhere, but having a  provision in the act  that says                                                               
that arbitrators  are immune from  civil liability will  insure a                                                               
supply  of arbitrators.  It  also prevents  a  situation where  a                                                               
person who had arbitration would  have to have another proceeding                                                               
in court on the same issue.                                                                                                     
                                                                                                                                
SENATOR FRENCH  asked if this bill  was modeled on a  uniform act                                                               
that is being adopted in other states.                                                                                          
                                                                                                                                
MR.  CALLOW replied  yes; this  has  already been  enacted in  12                                                               
other  states and  was just  approved by  the Commission  and the                                                               
AVA.                                                                                                                            
                                                                                                                                
SENATOR FRENCH asked  if all the stakeholders  had an opportunity                                                               
to provide input into the uniform act.                                                                                          
                                                                                                                                
MR. CALLOW replied yes, absolutely.                                                                                             
                                                                                                                                
CHAIR BUNDE  said they were  running out  of time today  and held                                                               
the bill for further work.