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

To require customers to sign contracts with binding arbitration clauses in Virginia, the following requirements must be met:

Validity of Arbitration Agreement

According to VACV 8.01-581.01, a written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable, and irrevocable, except upon such grounds as exist at law or in equity for the revocation of any contract. This article also applies to arbitration agreements between employers and employees or between their respective representatives unless otherwise provided in the agreement.

Agreement to Arbitrate

Claimants shall submit their request for arbitration to the board on a form prescribed by the department. Claimants shall also provide an affidavit pursuant to § 45.2-1623 of the Code of Virginia [1.4].

Extension of Arbitration

If the claimants agree that the arbitrator may take longer than six months from the date the board ordered the arbitration to render a determination, the arbitrator shall notify the board of this extension [1.1].

Postponement of Arbitration

Any request for postponement may be granted by the arbitrator if all claimants consent, or if good cause for a postponement is shown to the satisfaction of the arbitrator. Whenever a postponement is granted, the arbitrator will promptly reschedule the hearing and notify the board and the claimants [1.3].

Conflicts of Interest

In addition to the limitations set forth in § 45.2-1623 of the Code of Virginia, an arbitrator may not hear an arbitration if the arbitrator is related to one of the claimants, has a personal interest in the subject of the arbitration, or if other circumstances exist that might affect the arbitrator’s ability to render a fair determination. If evidence of a conflict exists under this section, a claimant may petition the court to appoint a different arbitrator [1.6].

Costs of Arbitration

Arbitrations shall be funded from accrued interest. The department shall determine on a case-by-case basis if sufficient funds exist to conduct an arbitration. If sufficient funds are not available, the department shall maintain a waiting list of parties willing to arbitrate [1.2].

Fees

Arbitrators shall be paid at the rate of no more than $250 per hour. Expenses of the arbitrator incurred during the course of the arbitration shall be reimbursed in accordance with the State Travel Regulations prescribed by the Department of Accounts. Pursuant to § 45.2-1623 of the Code of Virginia, payment of fees and expenses of the arbitration may be delayed if there are intervening disbursements from the general escrow account under subdivision 5 (i) or (iii) of § 45.2-1623 of the Code of Virginia that reduce the interest balance below the amount of fees and expenses requested [1.5].

Therefore, customers can be required to sign contracts with binding arbitration clauses in Virginia, subject to the requirements outlined above.

Source(s):
Jurisdiction

Virginia