For businesses and individuals entering into agreements with any risk of
the other party failing to adhere to its obligations - perhaps all contracts
- it can be more important than possibly ever to include well-drafted
In other words, if you should already have an arbitration clause in your
contract, we recommend to make sure it is in there, now.
The state of the State Court backlog in Illinois and many jurisdictions
nationwide is perhaps the largest in decades. Since many states have reopened
from the COVID-19 shutdowns of 2020, we are only now seeing the actual
rescheduling dates of many cases. In Cook County for example, Illinois'
largest county court system, cases are proceeding on a case-by-case basis,
with some case status hearings being held now by video conference, but
others being rescheduled to the fall of 2020 or even as late as February
of 2021. This means if you are a Plaintiff attempting to recover a debt,
compensate for damages or achieve specific performance, you will need
to take your place in this increasingly long line.
However, there is a solution that predates the COVID-19 outbreak. Arbitration
firms have been offering alternative dispute resolution by phone or video
conference for some time. Mediation and arbitration have continued at
a faster pace than their State Court alternatives. Currently as of July
of 2020 plaintiffs have been achieving outcomes in mediation and arbitration
in a time where it would be impossible to obtain a similar judgment in
State Courts. As many of you know, federal law mandates that arbitration
awards may be enforced in Court, and in a rather more efficient way than
filing the entire case in Court. Executed settlements from mediation,
properly drafted, are also typically upheld by courts of competent jurisdiction.
Be careful however to properly draft and insert mediation and arbitration
provisions into contracts. Failing to specify certain conditions or process
can invalidate the arbitration provisions. For example, in Illinois a
business or individual engaging in residential home repair and remodeling
must allow for a home owner to specifically acknowledge and agree to the
arbitration provision in writing, not just in the final signature line
for the contract, along with other requirements. Finally, it is important
to note that arbitration provisions may not be optimal for every contract