Justices Expand Arbitration Review; Parties May Contract to Allow Courts to Correct Legal Errors

The California Supreme Court ruled on Monday, August 25 that courts can look for legal mistakes made by arbitrators if all parties agree beforehand. This major decision, a break from the U.S. Supreme Court's policy, resulted from a case for Kirkland client DIRECTV.

"Attorneys for DIRECTV were pleased with the decision and said it will promote the use of arbitration in certain high-stakes cases.

'What it assures is that you have the correct law applied,' said Michael E. Baumann of Kirkland & Ellis in Los Angeles. 'The speed and efficiency of an arbitration ... is not gong to be jeopardized by an arbitrator making an incorrect decision of the law.'

He said ruling should not be considered pro-business or pro-plaintiff because both sides must agree to expanded judicial review before it can take place."

This article appeared in its entirety in the August 26, 2008 edition of Los Angeles Daily Journal.