Individuals frequently sign contracts without reading and understanding the significance of an arbitration provision which may be included and the type of dispute to which it will apply. In a 2017 decision, the Mississippi Court of Appeals addressed for the first time “whether a challenge to the validity of an arbitration clause may be brought post-arbitration.” [Click here for Decision] In that case, the contractor had entered into an agreement for services with an attorney that included an arbitration provision. It provided the arbitration provision would apply to “any disputes between the parties which arise from, or is related to, a claimed breach of this agreement, the professional services rendered by Davis & Feder, P.A., or any claim for legal and or professional malpractice…”
The contractor claimed the law firm mishandled the contractor’s claims and sued the law firm for malpractice. The parties proceeded to arbitration where an award was issued in favor of the law firm and denied the contractor any relief. The contractor then sued the lawyer for malpractice in state court claiming the arbitration award should be vacated because the arbitration clause in the contract was unconscionable and the arbitrator exceeded his authority. The trial court disagreed with the contractor and the contractor appealed. The Mississippi Court of Appeals affirmed the decision of the trial court finding the contractor had waived its right to challenge the arbitration provision in the contract. The Court, citing supporting decisions from a number of other jurisdictions, found that “participation in arbitration proceedings waives the right to object to an arbitrator’s authority.”
The lesson to be learned from this case is if you what to challenge an arbitration provision you need to raise the issue before and not after the arbitration proceeding.