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California Courts say Failure to Pay Arbitration Fees Could have Unfortunate Consequences for Attorneys, Clients

June 14, 2023 (2 min read)
Two figures facing each other as if in a dispute

By The Wagstaffe Group

California Arbitration Fees 

California litigators pursuing arbitration take heed: the failure to timely pay arbitration fees could have disastrous consequences for your client.  

A California appellate court has yet again held that a party’s failure to timely pay arbitration fees will result in a waiver of their right to arbitrate a dispute.  

As reported by The Wagstaffe Group on numerous occasions, California law provides a strong incentive to defendants in consumer or employment arbitrations to timely pay arbitration fees. This means a waiver of the risk to arbitrate on the grounds that the failure to pay is a material breach of the arbitration agreement.  

What happens if you do not pay arbitration fees in California? 

In one case, a convalescent hospital in California failed to timely pay its arbitration fees in a suit brought by the family of a now-deceased patient. The Plaintiffs moved to vacate the trial court stay and reinitiate litigation in court.  

That same day, the Defendant belatedly paid the fees. The trial court granted the Plaintiff’s motion, allowing litigation in court to resume. The Defendant argued that before a plaintiff may proceed in court, the arbitrator must make a finding of material breach by failure to pay. The appellate court rejected this suggestion as inconsistent with the statute.  

The appellate court also rejected the Defendant’s argument that the trial court lacked jurisdiction to grant the Plaintiff’s motion. Contractual arbitration is not an “ouster” of the court’s jurisdiction, and the court did not dismiss the arbitration or exercised jurisdiction over the arbitration.  

Finally, the appellate court rejected the Defendant’s argument that the statute applied only to mandatory arbitration agreements, and not to voluntary agreements; again, the statute contains no such limitation. Williams v. W. Coast Hosps., Inc., 2022 Cal. App. LEXIS 1049 (Dec. 22, 2022). 

In short, clients should pay arbitration fees in a timely manner otherwise the result could be a waiver of their right to arbitrate a dispute.  

The Waiver of the Right to Compel Arbitration is just one of the topics featured within California Civil Procedure Before Trial: The Wagstaffe Group. The practice guide provides exhaustive coverage on all pretrial matters, including:  

  • Client interview 
  • Subject matter and personal jurisdiction 
  • Anti-SLAPP motions 
  • Pretrial injunctive relief 
  • Oral depositions 
  • Discovery motion procedure and sanctions 
  • Summary judgment and summary adjudication 
  • Settlement and release 

California Civil Procedure Before Trial is just one of thirteen practice guides for California practitioners. Click here to view the entire offering, including Matthew Bender® Practice Guide: California Trial and Post-Trial Civil Procedure and Matthew Bender® Practice Guide: California Civil Appeals and Writs. 

About The Wagstaffe Group 

Led by Jim Wagstaffe, partner and founder of WVBR Law LLP, The Wagstaffe Group was launched in 2016 with its primary goal to provide practicing litigators with groundbreaking tools for success as they tackle the complexities of civil procedure. 
The Contributing Authors to The Wagstaffe Group represent a highly experienced and talented array of federal judges and law clerks, law firm managing partners, honored trial and appellate attorneys, and longtime writers of litigation practice guides. 
The Wagstaffe Group also authors The Wagstaffe Practice Guide: Federal Civil Procedure Before Trial.