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A BILL TO BE ENTITLED
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AN ACT
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relating to arbitration proceedings. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.021, Civil Practice and Remedies |
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Code, is amended by adding Subsection (d) to read as follows: |
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(d) An order compelling arbitration may not violate a right |
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protected by the United States Constitution or the Texas |
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Constitution. The provisions of Section 171.098(a) apply to an |
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appeal on constitutional grounds from an order compelling |
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arbitration. |
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SECTION 2. Section 171.041, Civil Practice and Remedies |
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Code, is amended by adding Subsection (d) to read as follows: |
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(d) An arbitrator appointed under Subsection (b) must |
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satisfy objective qualification standards, including an |
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appropriate level of education, training, and experience. A court |
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may not appoint an unqualified arbitrator. |
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SECTION 3. Subsection (b), Section 171.044, Civil Practice |
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and Remedies Code, is amended to read as follows: |
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(b) The notice must be served not later than the fifth day |
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before the hearing either personally or by registered or certified |
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mail with return receipt requested. Notice may not be waived, and |
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the hearing may not proceed without proper [Appearance at the
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hearing waives the] notice. |
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SECTION 4. Section 171.047, Civil Practice and Remedies |
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Code, is amended to read as follows: |
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Sec. 171.047. RIGHTS OF PARTY AT HEARING. Unless otherwise |
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provided by the agreement to arbitrate, a party at the hearing is |
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entitled to: |
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(1) be heard; |
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(2) present evidence material to the controversy; |
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[and] |
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(3) cross-examine any witness; and |
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(4) a transcript of the hearing. |
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SECTION 5. Subchapter C, Chapter 171, Civil Practice and |
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Remedies Code, is amended by adding Section 171.0481 to read as |
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follows: |
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Sec. 171.0481. TRANSCRIPT. (a) A transcript of the |
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hearing must be requested by a party before commencement of the |
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hearing or the right to a transcript is waived. |
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(b) A party requesting the transcript and any party |
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requesting a copy of the transcript are responsible for the cost. |
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(c) An arbitrator may consider the cost of the transcript to |
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be an expense incurred in conducting the arbitration as provided by |
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Section 171.055. |
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SECTION 6. Subsection (a), Section 171.088, Civil Practice |
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and Remedies Code, is amended to read as follows: |
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(a) On application of a party, the court shall vacate an |
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award if: |
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(1) the award was obtained by corruption, fraud, or |
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other undue means; |
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(2) the rights of a party were prejudiced by: |
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(A) evident partiality by an arbitrator |
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appointed as a neutral arbitrator; |
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(B) corruption in an arbitrator; or |
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(C) misconduct or wilful misbehavior of an |
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arbitrator; |
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(3) the arbitrators: |
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(A) exceeded their powers; |
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(B) refused to postpone the hearing after a |
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showing of sufficient cause for the postponement; |
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(C) refused to hear evidence material to the |
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controversy; or |
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(D) conducted the hearing, contrary to Section |
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171.043, 171.044, 171.045, 171.046, or 171.047, in a manner that |
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substantially prejudiced the rights of a party; [or] |
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(4) there was no agreement to arbitrate, the issue was |
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not adversely determined in a proceeding under Subchapter B, and |
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the party did not participate in the arbitration hearing without |
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raising the objection; or |
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(5) the award clearly violates fundamental public |
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policy. |
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SECTION 7. Section 171.092, Civil Practice and Remedies |
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Code, is amended by adding Subsections (c) and (d) to read as |
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follows: |
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(c) Notwithstanding a limitation in Section 171.087, |
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171.088, 171.090, or 171.091, the court may vacate, modify, or |
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correct an award as if the award were a judgment entered by a court |
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sitting without a jury. |
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(d) An appellate court reviewing a judgment entered on an |
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award must apply the same standard of review as if the judgment were |
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entered by a court sitting without a jury. |
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SECTION 8. Subsection (a), Section 171.098, Civil Practice |
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and Remedies Code, is amended to read as follows: |
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(a) A party may appeal a judgment or decree entered under |
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this chapter or an order: |
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(1) granting or denying an application to compel |
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arbitration made under Section 171.021; |
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(2) granting an application to stay arbitration made |
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under Section 171.023; |
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(3) confirming or denying confirmation of an award; |
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(4) modifying or correcting an award; or |
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(5) vacating an award without directing a rehearing. |
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SECTION 9. Title 7, Civil Practice and Remedies Code, is |
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amended by adding Chapter 181 to read as follows: |
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CHAPTER 181. ARBITRATOR REQUIREMENTS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 181.001. POLICY; FINDINGS. It is this state's policy |
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to ensure that a person's right to the fair and impartial hearing |
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and resolution of a civil complaint is not infringed. To protect |
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that right, it is in the public interest and is the purpose of this |
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chapter to require the provision of information needed to evaluate |
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whether the public policy supporting arbitration is being served |
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and to establish a basic system for evaluating and ensuring the |
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accountability of arbitrators and arbitration services providers. |
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Sec. 181.002. DEFINITIONS. In this chapter: |
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(1) "Arbitration panel" means a group or panel of |
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arbitrators. |
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(2) "Arbitration services provider" means a person |
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that holds itself out as: |
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(A) managing, coordinating, or administering |
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arbitrations; |
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(B) providing the services of arbitrators; |
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(C) making referrals or appointments to |
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arbitrators; or |
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(D) providing lists of arbitrators. |
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(3) "Arbitrator" means a neutral individual, |
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including a member of a panel of neutral individuals, who hears the |
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claims of the parties to a dispute and renders a decision and who |
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is: |
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(A) chosen by the parties to the dispute; |
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(B) appointed by a court; or |
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(C) selected by an arbitration services provider |
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under an agreement of the parties or applicable rules. |
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(4) "Consumer arbitration" means an arbitration that |
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arises out of or relates to a transaction in which an individual |
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acquires or seeks to acquire credit, or the purchase or lease of |
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goods or services, primarily intended to be used for personal, |
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family, or household purposes. This term does not include an |
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arbitration proceeding between members of the same real estate |
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trade association. |
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(5) "Employment arbitration" means an arbitration |
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that arises out of or relates to an employment relationship or |
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prospective employment relationship. The term does not include a |
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grievance or arbitration proceeding subject to a collective |
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bargaining agreement. |
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(6) "Office of court administration" means the Office |
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of Court Administration of the Texas Judicial System. |
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Sec. 181.003. APPLICABILITY. (a) Except as provided by |
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Subsection (b), the requirements of this chapter apply to any |
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consumer arbitration or employment arbitration conducted in this |
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state that is subject to Chapter 171 or Chapter 1, Federal |
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Arbitration Act (9 U.S.C. Sections 1-16). |
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(b) This chapter does not apply to: |
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(1) an arbitration conducted or administered by a |
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self-regulatory organization as defined by the Securities Exchange |
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Act of 1934 (15 U.S.C. Section 78c), the Commodity Exchange Act (7 |
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U.S.C. Section 1 et seq.), or regulations adopted under those acts; |
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or |
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(2) a residential construction arbitration to which |
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Chapter 437, Property Code, applies. |
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[Sections 181.004-181.050 reserved for expansion] |
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SUBCHAPTER B. DISCLOSURE PROCEDURES |
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Sec. 181.051. DISCLOSURE FILING. For each consumer |
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arbitration or employment arbitration conducted in this state, the |
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arbitrator or arbitration panel that conducts the arbitration or, |
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if an arbitration services provider administers the arbitration, |
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the arbitration services provider shall file an arbitration |
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disclosure with the office of court administration before the 90th |
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day after the date the arbitration award is signed. |
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Sec. 181.052. DISCLOSURE INFORMATION. (a) The disclosure |
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may not reveal the name of any party to the arbitration. |
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(b) Subject to Subsection (a), the disclosure must contain |
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the following information: |
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(1) the name of the arbitration services provider |
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administering the arbitration, if any; |
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(2) a general statement of the nature of the dispute |
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and the relief requested by each party; |
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(3) a description of the arbitrator's or the |
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arbitration panel's decision and award that states in general terms |
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which party prevailed and if that party received the relief |
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requested; |
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(4) the date the award was signed; |
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(5) the date the arbitrator or arbitration panel was |
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selected or appointed to conduct the arbitration; |
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(6) the fees and expenses charged by each arbitrator; |
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(7) the fees and expenses charged by the arbitration |
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services provider administering the arbitration, if any; |
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(8) a statement of whether the claimant or respondent |
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prevailed in the arbitration; and |
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(9) a description of the general nature of the |
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prevailing party, for example, whether the prevailing party is a |
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business, consumer, employer, employee, or other appropriate |
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category. |
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Sec. 181.053. OPTION TO LIMIT DISCLOSURE. |
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(a) Notwithstanding Section 181.052, the parties may agree to |
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except from disclosure the information required by Section |
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181.052(3). |
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(b) An agreement to limit disclosure may not be entered |
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into: |
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(1) before the 20th day after the filing and service of |
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the demand for arbitration; or |
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(2) after the close of the arbitration hearing. |
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(c) The parties shall provide evidence of their agreement to |
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limit disclosure by signing a form adopted for that purpose by the |
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office of court administration, under the supervision of the chief |
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justice. |
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(d) If the parties agree to limit disclosure: |
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(1) the arbitrator or arbitration services provider |
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shall: |
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(A) retain the original agreement to limit |
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disclosure in the records of the proceeding until the second |
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anniversary of the date on which the award is signed; and |
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(B) provide each party with a copy of the |
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agreement; and |
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(2) the arbitrator or arbitration services provider, |
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as applicable, shall file with the office of court administration |
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the information not excepted by this section from disclosure in |
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accordance with this subchapter and shall certify to the office of |
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court administration that the parties have signed and submitted an |
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agreement to limit disclosure. |
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Sec. 181.054. INTERNET SITE FOR INFORMATION. The office of |
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court administration shall make the information collected under |
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this subchapter available on its Internet website. |
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[Sections 181.055-181.100 reserved for expansion] |
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SUBCHAPTER C. ENFORCEMENT PROVISIONS |
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Sec. 181.101. LATE FILING FEE. (a) The director of the |
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office of court administration, under the supervision of the chief |
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justice, shall implement procedures for the collection of a fee not |
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to exceed $100 for the late filing of an arbitration disclosure in |
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accordance with rules adopted by the supreme court for the |
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efficient administration of justice. |
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(b) A party to an arbitration, or an attorney for the party, |
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may report an overdue filing of the arbitration disclosure to the |
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office of court administration. |
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(c) An arbitration disclosure that is filed within the |
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period specified by Section 181.051 is not subject to a filing fee. |
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Sec. 181.102. LATE DISCLOSURE FILERS; INELIGIBILITY FOR |
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ARBITRATION ADMINISTRATION. (a) An arbitrator, including a |
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member of an arbitration panel, or arbitration services provider is |
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ineligible for a court appointment to arbitrate or administer an |
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arbitration under Section 171.041(b) during the period in which the |
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arbitrator or panel of which the arbitrator is a member or |
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arbitration services provider: |
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(1) fails to file an overdue arbitration disclosure; |
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or |
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(2) owes a fee for late filing. |
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(b) An arbitrator who personally or as a member of an |
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arbitration panel has failed, or an arbitration services provider |
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that has failed, three times in the preceding 12-month period to |
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timely file arbitration disclosures is ineligible for a court |
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appointment to arbitrate or administer an arbitration under Section |
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171.041(b) until the first anniversary of the date the office of |
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court administration receives the third report of an overdue filing |
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with respect to that arbitrator or arbitration services provider. |
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(c) The office of court administration shall compile, |
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maintain, and publish on the Internet an updated list of |
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arbitrators and arbitration services providers that are ineligible |
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to conduct or administer a court-ordered arbitration under |
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Subsection (a) or (b). |
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(d) The director of the office of court administration, |
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under the supervision of the chief justice, shall implement a |
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procedure by which an arbitrator or arbitration services provider |
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can be removed from the published list, in accordance with rules |
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adopted by the supreme court for the efficient administration of |
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justice. |
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(e) The office of court administration and the Texas |
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Judicial Council shall include in the annual report under Section |
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71.034, Government Code, a list of the names of all arbitrators or |
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arbitration services providers who have been on the ineligible list |
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during the period included in that report. |
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[Sections 181.103-181.150 reserved for expansion] |
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SUBCHAPTER D. IMMUNITY |
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Sec. 181.151. IMMUNITY FROM CIVIL LIABILITY. An arbitrator |
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or arbitration services provider is immune from civil liability for |
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providing information required for compliance with this chapter |
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unless the complaining party proves that the arbitrator or |
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arbitration services provider recklessly or knowingly provided |
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false information. |
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SECTION 10. (a) For the purposes of this section, the date |
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an arbitration is commenced is the date an arbitrator, as defined by |
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Section 181.002, Civil Practice and Remedies Code, as added by this |
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Act, is selected or appointed. |
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(b) Except as provided by Subsection (c) of this section, |
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the change in law made by this Act applies only to arbitration |
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commenced on or after January 1, 2008. An arbitration commenced |
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before January 1, 2008, is governed by the law applicable to |
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arbitrations immediately before January 1, 2008, and that law is |
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continued in effect for that purpose. |
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(c) Section 171.092, Civil Practice and Remedies Code, as |
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amended by this Act, applies to an arbitration award signed by an |
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arbitrator on or after January 1, 2008. |
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SECTION 11. This Act takes effect January 1, 2008. |
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* * * * * |