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Pre-dispute jury waivers



A bill submitted in the California legislature would restore the right of contracting parties to opt out of the uncertainties of full-dress trial before a dispute arises. The Civil Justice Association of California explains:

Senate Bill 1386 (Morrow) would restore the ability to agree by contract to settle future legal disputes before a judge without a jury. The California Supreme Court ruled last year in Grafton Partners v. PriceWaterhouseCoopers that state law does not permit pre-dispute "jury waivers," and ruled them invalid in existing contracts, including those involved in pending litigation. The decision makes California one of only two states (Georgia is the other) that forbids this contractual option that would allow both parties to agree to have a judge decide their case rather than a lengthy and costly jury trial.

Justice Ming Chin "reluctantly" concurred in the Supreme Court�s decision but urged the Legislature to reverse the situation.

The Supreme Court�s ruling removes a useful option for people who want to settle legal disputes fairly and swiftly. In a commercial setting, this decision is especially unfortunate. Companies in California will not be able to agree to a lower-cost option that lets them solve a dispute and more quickly get on with their business. An increased drain on court resources will be an additional undesirable result.

On the positive side, the Supreme Court�s opinion reinforces the validity of agreements to submit future disputes to arbitration. This too is an important option for California businesses and consumers.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.