Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

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

Yes, you can require customers to sign contracts with binding arbitration clauses in Utah, but there are specific requirements that must be met.

Requirements for Binding Arbitration Clauses in Utah

According to UTAC R590-215-4 and UTAC R590-122-4, there are several requirements for permissible arbitration provisions in Utah. These include:

  1. Compulsory binding arbitration is not a permissible arbitration provision.
  2. Compulsory non-binding arbitration is a permissible arbitration provision when used as an internal review of an adverse benefit determination under 29 CFR 2560.503-1(c)(4).
  3. Voluntary binding arbitration, at the election of an insured, is a permissible arbitration provision, and may only be used as a voluntary level of review under 29 CFR 2560.503-1(c)(3)(iii).
  4. A policy form containing a compulsory binding or a voluntary binding arbitration provision for the exclusive election of an insurer will be disapproved under Subsection 31A-21-201(3)(a)(iv), and these provisions in any previously filed form are declared not enforceable.
  5. Each application for an individual or group health benefit plan or income replacement insurance policy that contains a voluntary arbitration provision shall include or have attached a prominent statement substantially as follows:

ANY MATTER IN DISPUTE BETWEEN YOU AND THE COMPANY MAY BE SUBJECT TO ARBITRATION AS AN ALTERNATIVE TO COURT ACTION PURSUANT TO THE RULES OF (THE AMERICAN ARBITRATION ASSOCIATION OR OTHER RECOGNIZED ARBITRATOR), A COPY OF WHICH IS AVAILABLE ON REQUEST FROM THE COMPANY. THE COMPANY SHALL BEAR THE COSTS OF ARBITRATION, FILING FEES, ADMINISTRATIVE FEES AND ARBITRATOR FEES. OTHER EXPENSES OF ARBITRATION, INCLUDING, BUT NOT LIMITED TO: ATTORNEY FEES, EXPENSES OF DISCOVERY, WITNESSES, STENOGRAPHER, TRANSLATORS, AND SIMILAR EXPENSES, WILL BE BORNE BY THE PARTY INCURRING THOSE EXPENSES. ANY DECISION REACHED BY ARBITRATION SHALL BE BINDING UPON BOTH YOU AND THE COMPANY. THE ARBITRATION AWARD MAY INCLUDE ATTORNEY’S FEES, IF ALLOWED BY STATE LAW, AND MAY BE ENTERED AS A JUDGMENT IN ANY COURT OF PROPER JURISDICTION. 6. A voluntary binding arbitration provision may not preclude a dispute from being resolved through any small claims court having jurisdiction. 7. Any arbitration provision contained in an insurance policy shall comply with Title 78B, Chapter 11, Utah Uniform Arbitration Act. 8. An agreement for arbitration may not obligate an insured to pay for the arbitration as part of the voluntary appeal in accordance with 29 CFR 2560.503-1(c)(3)(v). 9. An arbitration provision may not require that arbitration be held at a place further from the residence of the insured than the nearest location of a State Court of General Jurisdiction.

Initiation of Arbitration

According to UTCO 78B-11-110, a person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate in the agreed manner between the parties or, in the absence of agreement, by certified or registered mail, return receipt requested and obtained, or by service as authorized for the commencement of a civil action. The notice must describe the nature of the controversy and the remedy sought.

Motion to Compel Arbitration

According to UTCO 78B-11-108, on motion of a person showing an agreement to arbitrate and alleging another person’s refusal to arbitrate pursuant to the agreement, the court shall order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate. If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in court, a motion under this section must be made in that court. Otherwise, a motion under this section may be made in any court as provided in Section 78B-11-128. If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration.

Conclusion

In summary, you can require customers to sign contracts with binding arbitration clauses in Utah, but the arbitration provision must comply with the requirements outlined in UTAC R590-215-4 and UTAC R590-122-4, and any arbitration proceeding must be initiated and compelled in accordance with UTCO 78B-11-110 and UTCO 78B-11-108, respectively.

Jurisdiction

Utah