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Can I require customers to sign contracts with binding arbitration clauses in Rhode Island? What are the requirements?

Yes, you can require customers to sign contracts with binding arbitration clauses in Rhode Island. However, there are certain requirements that must be met.

Requirements for binding arbitration clauses in Rhode Island

According to RIGL 27-10.3-1, every contract of motor vehicle liability insurance issued in Rhode Island by an insurance carrier authorized to do business in the state must contain provisions for arbitration. The arbitration provision must allow any person suffering a loss allegedly resulting from the ownership, maintenance, or use of a motor vehicle by an insured or self-insured to submit the matter to arbitration. The claim must be for $50,000 or less, and the arbitration must be conducted pursuant to chapter 3 of title 10.

If you are not dealing with motor vehicle liability insurance, you can still require customers to sign contracts with binding arbitration clauses in Rhode Island, but you must ensure that the arbitration provision meets the requirements set forth in RIGL 28-9.5-8 and RIGL 28-9.7-7. These statutes provide that if the bargaining agent and state authorities are unable to reach an agreement on a contract within thirty days, any unresolved issues shall be submitted to arbitration. The parties must each select and name one arbitrator within five days from the expiration of the thirty-day period, and the two arbitrators selected must agree upon and select a third arbitrator within ten days from the expiration of the five-day period. If the arbitrators are unable to agree upon the selection of a third arbitrator, the chief justice of the Rhode Island supreme court shall select a resident of Rhode Island, or a person whose place of business or principal place of employment is in Rhode Island, as the third arbitrator upon request, in writing, from either the bargaining agent or the state authorities. The third arbitrator shall act as chair of the arbitration board.

Fees and necessary expenses of arbitration shall be equally borne by the bargaining agent and the state. If a party fails to make timely payment of its share of the arbitrator’s fees and expenses, the arbitrator or a party who has paid its share of the fees and necessary expenses of a court-appointed arbitrator may petition the superior court for sanctions against the non-paying party, including, but not limited to, contempt powers pursuant to § 8-6-1.

Therefore, if you want to require customers to sign contracts with binding arbitration clauses in Rhode Island, you must ensure that the arbitration provision meets the requirements set forth in the relevant statutes.

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Source(s):
Jurisdiction

Rhode Island