Arizona’s Compulsory Arbitration Program: Is It Time for a Reform?

By Christian Fernandez.

What is Arizona’s compulsory arbitration program?

Arbitration is a form of alternative dispute resolution where an independent third party hears the case and determines the result. Arizona courts have adopted a compulsory arbitration program for all civil lawsuits that meet the requirements listed in Rules 72–77 of the Arizona Rules of Civil Procedure. All civil disputes valued under a specific amount are resolved through this arbitration program instead of litigating in court. This program applies to plaintiffs that are only seeking money damages. In addition, this program does not apply to criminal lawsuits.

How does the compulsory arbitration program work?

A person that brings a lawsuit in Arizona is required to fill out a form stating the type and estimated value of damages they seek. The compulsory arbitration program applies if the amount of damages sought is less than a specific threshold set by each county. For example, the threshold amount for Maricopa and Pima county is $50,000. A defendant that disagrees with a plaintiff’s estimate of the damages can file a response in an attempt to convince the judge that the dispute should not be resolved through compulsory arbitration. The court then decides whether compulsory arbitration is appropriate by determining whether the case’s estimated value is above or below the $50,000 threshold.

A court can waive compulsory arbitration even if the value of the dispute is below the jurisdictional limit if both parties agree and provide a valid reason why the case should be in court. A court can also waive the arbitration requirement if both parties agree that another form of alternative dispute resolution would be more effective to resolve the case. For example, mediation may be an option.

During arbitration the arbitrator has the judicial authority to resolve the case without a trial. With a few exceptions, the arbitrator has similar powers to that which a judge would have during a trial. Within ten days after hearing the case, the arbitrator will file his or her decision with the court and provide the decision to all the parties involved. A party can file an appeal that may be heard by a court if it is not satisfied with the decision.

Why did Arizona adopt this program?

Arizona adopted this compulsory arbitration program for two main reasons. First, it was intended to lower court costs for litigants. Lower costs would provide an avenue of relief for people with small claims that traditionally would not be worth litigating in court. Second, it was intended to help Arizona courts utilize judicial resources more effectively. The compulsory arbitration program attempted to lighten Arizona’s overburdened court system by reducing the number of cases that judges must hear and decide.

Is it time to reform the program?

Recently, there have been many who support reforming Arizona’s current compulsory arbitration system. Many years ago, the Supreme Court of Arizona commissioned a study of the compulsory arbitration program. This study, discussed here, concluded that it was unclear if the program improves efficiency or effectiveness at all. More recently, Arizona has considered alternatives to replace or improve the compulsory arbitration program. In 2015, the Arizona Supreme Court’s Committee on Civil Justice Reform reviewed potential reform options. One option included revamping the current arbitration program. Ultimately, the committee recommended a new “short trial” program. As a result, a three-year pilot program was launched in 2017 in Arizona’s Pima County Superior Court. This pilot program is called the Fast Trial and Alternative Resolution Program (“FASTAR”). A plaintiff that qualifies for compulsory arbitration has the option to choose to proceed through the FASTAR program instead. The FASTAR program places restrictions on the litigation process to compress the proceeding to under nine months.

Practical considerations moving forward

The pilot FASTAR program is set to end on October 31, 2020. The Arizona Supreme Court may decide to do away with the compulsory arbitration program entirely if the data collected on the FASTAR program results in lower litigation costs and increased judicial efficiency. This may require attorneys to proceed through more traditional, although expedited, trial processes. As a result, attorneys with trial skills will become that much more valuable going forward.

More information on the FASTAR program can be found here.

The opinions expressed herein are those of the individual contributors to the ASLJ Blog and should not be construed as the opinions of the Arizona State Law Journal or the Sandra Day O’Connor College of Law at Arizona State University.

Christian Fernandez
J.D. Candidate, 2021
Christian is a 2L staff writer from Prescott, Arizona. Prior to law school, Christian studied biomedical engineering at the University of Arizona (Bear Down). In his free time Christian enjoys playing golf, working out, and spending time with friends and family. Christian is expected to graduate in 2021.

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