Arbitration Is Not Always Mandatory

Boilerplate arbitration provisions do not always bind litigants to private arbitration.  Our firm is currently disputing a big-box home retailer’s compulsory arbitration provision and jury waiver.  The case could have wide-ranging implications and effects in favor of subrogating insurers and individual litigants.   

 The big-box retailer regularly issues home improvement contracts which seek to completely prevent any litigant from suing the retailer in court.  The contract seeks instead to mandate a limited, private arbitration hearing.  While arbitration may have laudable overall goals – and because Pennsylvania courts occasionally enforce these provisions – we closely scrutinize when and where Arbitration clauses are enforceable.  After our review and that close scrutiny, we sued in court anyway… and we prevailed.

In many instances, Pennsylvania’s Home Improvement Consumer Protection Act (HICPA) invalidates a so-called compulsory Arbitration provision.  HICPA sets mandatory requirements for Pennsylvania home improvement contracts, even for big box retailers.  Our Complaint, filed in state court,  pre-emptively cited to HICPA and asserted the inability to enforce the arbitration clause.

The Court of Common Pleas of Tioga County agreed.  Private litigants seeking redress for the wrongs of a contractor may have their day in court.  Arbitration is not always compulsory. (January 2016)


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