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What you should know about the CSLB’s mandatory arbitration program – III

In a series of posts, our blog has been discussing how licensed California contractors must be aware that the complaints of aggrieved parties — from homeowners and employees to subcontractors and fellow contractors — may be resolved via alternative dispute resolution.

Specifically, we’ve been examining how the Contractors State License Board must refer a complaint to arbitration if certain elements are present, as well as the actual process leading up to the arbitration hearing. We’ll conclude this discussion in today’s post, examining both the hearing itself and the arbitration award. 

The arbitration hearing

During the arbitration hearing, which will be held in a professional office setting, the individual who has filed the complaint against the contractor will proceed with the presentation of their case, including claims, witnesses, evidence, etc. Thereafter, the contractor will be provided with a similar opportunity.

Upon completion of the arbitration hearing, the arbitrator will have 30 days to render a decision, unless the parties agree otherwise.

Some facts to keep in mind concerning the arbitration hearing include:

  • Each side may be represented by legal counsel at their own expense
  • The CSLB will cover the cost of one state-appointed expert witness, whose report and testimony may be used by either side at the hearing
  • Each side may use a non-CSLB appointed expert at their own expense  

The arbitration award

At the outset, it’s important to establish that while an arbitrator has the authority to rule on claims, release mechanics liens and award damages, they do not have the authority to rule on disciplinary matters.

Once the arbitrator reaches a decision, any award granted is final and binding. Failure to comply will mean the winning party can petition the court to have the arbitration award confirmed and converted to an enforceable civil judgment.

Compliance with an arbitration award must be rendered within 30 days of the initial decision — absent an appeal. Any failure on the part of a contractor to meet this obligation may result in a CSLB investigation (if a report is filed by the complainant) and possible license suspension.

If this occurs, but the contractor ultimately complies within 90 days, their license will be reinstated. Failure to comply within this 90-day timeframe, however, will result in license revocation.  

Here’s hoping the foregoing conversation has proven enlightening. As always, if you are a builder looking for answers about mandatory arbitration or assistance with preparation for an arbitration hearing, consider speaking with a skilled legal professional.