Employers Take Heed: Promptly Pay Arbitration Fees Or Lose The Right To Arbitrate.

        California Code of Civil Procedure, sections 1281.97 and 1281.98 provide that if a company or business that drafts an arbitration agreement does not pay arbitration fees within 30 days of when fees are due, the company or business is in material breach of the agreement. The consequences are serious, as an employee or consumer can withdraw from arbitration and proceed to court. 

        That was the situation in Kail De Leon v. Juanita's Foods, B315394 (2/3  11/23/22) (Edmon, Egerton, Richards (Anne.K.)). Following the commencement of arbitration proceedings, De Leon's employer failed to timely pay fees. As a consequence, the trial court held that there was a material breach, and allowed De Leon to proceed with his claims in court.

        The upshot was that, despite various efforts by the employer to argue that De Leon was not prejudiced by a delay, the Court of Appeal affirmed the order granting De Leon's motion to vacate the order compelling arbitration. In sum, the Court of Appeal strictly applies §§ 1281.97 and 1281.98. It does not read in to the statutory language "but there was no prejudice" or other excuses.

        COMMENT: When the language of a statute is clear, the task of statutory interpretation is (usually) straightforward. As I wrote in a previous post dated 10/3/22 concerning the same statutory requirement, "Substantial Compliance With CCP § 1281.97 Just Won't Cut It."