The application of a limitations period in arbitration has always been a source of controversy. FINRA has its famous “six year rule.” But other than that, there didn’t seem to be much order when it came to applying a time limitation. Some arbitrators followed Florida or Federal law, some didn’t. It was the wild west.
Now there is order. The Florida Supreme Court has ruled that Florida law on time limitations applies to arbitration. In a unanimous ruling, the Court held that arbitration is a “civil action” for the purposes of Florida law. Therefore, the justices ruled, the Florida statutes of limitation apply.
What does this mean? First, it means that the time limitation for certain actions may be time-barred. Second, it means that the FINRA “six year rule” may not be the only deadline in play.
And remember the lawyers and regulators who wanted arbitration to be optional? Now arbitration will have the same time limitations as court.
That the view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.