Review Of Legal Error Here Was Job For Court Of Appeal
Though an error in law or fact is not a basis for overturning an arbitrator’s award, in California, the parties by agreement can make the arbitrator’s award reviewable for legal error. Here, the parties agreed that the award was to be reviewed for legal error, yet the trial court simply affirmed the award, declining to review for legal error. Naturally, the losing plaintiffs appealed from the judgment. Clarke v. Kilpatrick, Case No. C071313 (3rd Dist. May 28, 2014) (Blease, Nicholson, Mauro) (unpublished).
Affirmed.
Why? The answer is to be found in the language of the arbitration agreement. The parties here agreed that “judicial review of any … legal error by the arbitrator shall proceed . . . from a final judgment . . . entered in the Superior Court. . . “ And that is what happened – the Court of Appeal, rather than the Superior Court, reviewed the final judgment for legal error, and found none.
DRAFTING TIP. If you want to empower a court to review the arbitrator’s award for legal error, it’s not enough to simply require the arbitrators to follow the rule of law – because that may allow them to apply it “wrongly as well as rightly.” Cable Connection, Inc. v. DIRECTV, Inc., 44 Cal.4th 1334, 1360 (2008). Be sure to add that “legal errors are an excess of arbitral authority that is reviewable by the courts.” Id. at p. 1361. The language used in the specific agreement in Cable Connection did work to create the power to review for legal error.
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