Court Lets State Bar Arbitration Clauses

At the federal level, “arbitration has long been recognized as a favored means of dispute resolution,” Judge Edward Barfield writes in an opinion for the court.

“The Florida legislature, however, has determined that the business of insurance with respect to the enforcement of the contract shall be in the courts,” Barfield writes. “Barring preemption, the legislature may determine when arbitration will not be used.”

United said the federal arbitration law should allow for the inclusion of the mandatory arbitration provision, but the Florida court held that federal law does not apply because the dispute is specifically related to the business of insurance.

Florida Insurance Commissioner Kevin McCarty welcomed the court’s decision.

“Policyholders have fewer rights and constitutional protections under the more restrictive arbitration process than they would have in a civil court proceeding,” McCarty says in a statement. “I’m pleased that the Court made it clear that Florida consumers should not be shut out of the traditional legal system.”