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BILL # SB 1046 |
TITLE: arbitrators; appointment requirements |
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SPONSOR: Kern |
STATUS: Senate Engrossed |
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PREPARED BY: Ryan Fleischman |
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REVISED
The bill would require the Superior Courts' list of arbitrators to include any person who is qualified by training, experience, or credential. The bill further specifies that the court may not require an attorney to serve as an arbitrator. The Courts' Rules of Civil Procedure effectively limits arbitrators to attorneys at this time.
We
have revised the Fiscal Note to incorporate a reference to the fiscal impact
projection of the Administrative Office of the Courts (AOC) and Maricopa County.
We received this projection after publication of our original Fiscal Note.
Estimated Impact
We cannot determine if the bill would have a state fiscal impact. There could be a state cost if the elimination of mandatory attorney participation in arbitrations reduces the pool of eligible arbitrators. There could also be no cost if the expansion to non-lawyers generates sufficient numbers of qualified arbitrators.
AOC
believes that the bill would reduce the number of eligible arbitrators and
result in higher costs for counties. Maricopa County also assumes that it
would need to institute different procedures for resolving the cases that go
through arbitration in the Superior Court. Maricopa County recommends 4 options
to replace the arbitration system, 3 of which range in cost from $4.1 million
to $4.8 million. Their analysis assumes that the expanded pool of qualified
arbitrators under SB 1046 would yield no eligible individuals. We lack
sufficient information to evaluate the AOC and Maricopa County perspectives.
A.R.S. § 12-133 requires arbitration in all civil cases in which the Superior Court finds, or the parties agree, that the amount in question does not exceed the jurisdictional limit (established by each county, but not to exceed $65,000).
Statute
requires the Superior Court in each county to maintain a list of eligible
arbitrators to settle disputes under the jurisdictional limit. Arizona's Rules
of Civil Procedure (Rule 73) requires that the list of eligible arbitrators
include all attorneys in the county who have been active members of the State
Bar of Arizona for at least 4 years, all other State Bar members that have
agreed to serve as arbitrators in that county, and all members of any other
federal court or other state bar who have agreed to serve as arbitrators in
that county. The clerk of the court is required to select an arbitrator from
the list at random. Statute requires that arbitrators be paid a
"reasonable sum" not to exceed $140 per day paid by county General Fund
revenues.
According
to data provided by Maricopa County, there were a total of 26,901 new civil
case filings in Maricopa County Superior Court in FY 2022, 10,870 of which were
placed in mandatory arbitration. The court appointed 3,685 arbitrators who
each heard an average of 3 arbitrations in FY 2022. Maricopa County anticipates
that no current arbitrators would continue to participate under this bill.
(Continued)
Maricopa County assumes that they would need to institute different procedures for resolving civil cases currently handled by arbitrators. Maricopa County provided 4 potential scenarios and the associated cost. Of those, 3 range in cost from $4.1 million to $4.8 million and include either adding new judgeships, commissioners or staff attorneys to replace arbitrators. A fourth option is estimated to cost $13.8 million on a new "contract attorney program." We lack sufficient information to evaluate the potential need for and details of these alternatives to the current system.
3/9/23