103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5477

 

Introduced 2/9/2024, by Rep. Marcus C. Evans, Jr.

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Uniform Arbitration Act. Allows a party to serve upon another party a demand for arbitration or a notice of intention to arbitrate, specifying the agreement under which arbitration is sought and the name and address of the party serving the notice and stating that unless the party served applies to stay the arbitration within 20 days after service the party shall be precluded from objecting that a valid agreement was not made or has not been complied with and from asserting in court the bar of a limitation of time. Provides that in an arbitration brought by a consumer or employee that requires the drafting party to pay certain fees and costs before the arbitration can proceed, if the fees or costs to initiate an arbitration proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration. Sets forth various actions a party may take if the drafting party materially breaches the arbitration agreement. Includes sanctions an arbitrator or court may impose for materially breaching the agreement. Provides that, if a party is represented by an attorney, papers to be served on the party shall be served upon the attorney for that party, and any agreement which discriminates against or penalizes a party for retaining the services of counsel in an arbitration is null and void. In a provision regarding venue, provides that: if the name of the county is not specified, the application shall be brought in the county where the party seeking arbitration resides or is doing business, and other proceedings affecting arbitration are to be brought in the county where at least one of the parties resides or is doing business or where the arbitration was held or is pending; if there are multiple parties seeking arbitration against the same party or parties, the proceeding may be brought in any court and county where any of the parties seeking arbitration resides or is doing business or where the arbitration was held or is pending; and if there is no county in which the proceeding may be brought, the proceeding may be brought in any county.


LRB103 35069 LNS 65022 b

 

 

A BILL FOR

 

HB5477LRB103 35069 LNS 65022 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Uniform Arbitration Act is amended by
5changing Sections 6 and 17 and by adding Sections 1.1, 2.1,
62.2, 2.3, and 2.4 as follows:
 
7    (710 ILCS 5/1.1 new)
8    Sec. 1.1. Definitions. As used in this Act:
9    "Consumer" means an individual who seeks, uses, or
10acquires, by purchase or lease, any goods or services for
11personal, family, or household purposes.
12    "Employee" means any current employee, former employee, or
13applicant for employment. "Employee" includes any person who
14is, was, or who claims to have misclassified as an independent
15contractor or otherwise improperly placed into a category
16other than employee or applicant for employment.
 
17    (710 ILCS 5/2.1 new)
18    Sec. 2.1. Notice of intention to arbitrate. A party may
19serve upon another party a demand for arbitration or a notice
20of intention to arbitrate, specifying the agreement under
21which arbitration is sought and the name and address of the
22party serving the notice, or of an officer or agent if the

 

 

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1party is an association or corporation, and stating that
2unless the party served applies to stay the arbitration within
320 days after service the party shall be precluded from
4objecting that a valid agreement was not made or has not been
5complied with and from asserting in court the bar of a
6limitation of time. Notice or demand shall be served in the
7same manner as a summons or by registered or certified mail,
8return receipt requested. An application to stay arbitration
9must be made by the party served within 20 days after service
10upon the party of the notice or demand or the party shall be so
11precluded. Notice of such application shall be served in the
12same manner as a summons or by registered or certified mail,
13return receipt requested. Service of the application may be
14made upon the adverse party or upon the adverse party's
15attorney if the attorney's name appears on the demand for
16arbitration or the notice of intention to arbitrate. Service
17of the application by mail shall be timely if the application
18is posted within the prescribed period. Any provision in an
19arbitration agreement or arbitration rules which waives the
20right to apply for a stay of arbitration or proscribes a manner
21of notifying a party of an intention to commence arbitration
22that is more burdensome than that described in this Section is
23null and void.
 
24    (710 ILCS 5/2.2 new)
25    Sec. 2.2. Fees and costs of arbitration initiation;

 

 

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1invoice; breach of agreement; sanctions.
2    (a) In an arbitration brought by a consumer or employee
3that requires, either expressly or through application of
4State or federal law or the rules of the arbitrator, the
5drafting party to pay certain fees and costs before the
6arbitration can proceed, if the fees or costs to initiate an
7arbitration proceeding are not paid within 30 days after the
8due date, the drafting party is in material breach of the
9arbitration agreement, is in default of the arbitration, and
10waives its right to compel arbitration under Section 2.
11    After an employee or consumer meets the filing
12requirements necessary to initiate an arbitration, the
13arbitrator shall immediately provide an invoice for any fees
14and costs required before the arbitration can proceed to all
15of the parties to the arbitration. The invoice shall be
16provided in its entirety, shall state the full amount owed and
17the date that payment is due, and shall be sent to all parties
18by the same means on the same day. To avoid delay, absent an
19express provision in the arbitration agreement stating the
20number of days in which the parties to the arbitration must pay
21any required fees or costs, the arbitrator shall issue all
22invoices to the parties as due upon receipt.
23    (b) If the drafting party materially breaches the
24arbitration agreement and is in default under subsection (a),
25the employee or consumer may:
26        (1) withdraw the claim from arbitration and proceed in

 

 

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1    a court of appropriate jurisdiction; or
2        (2) compel arbitration in which the drafting party
3    shall pay reasonable attorney's fees and costs related to
4    the arbitration.
5    (c) If the employee or consumer withdraws the claim from
6arbitration and proceeds with an action in a court of
7appropriate jurisdiction under paragraph (1) of subsection
8(b), the statute of limitations with regard to all claims
9brought or that relate back to any claim brought in
10arbitration shall be tolled as of the date of the first filing
11of a claim in a court, arbitration forum, or other dispute
12resolution forum.
13    (d) If the employee or consumer proceeds with an action in
14a court of appropriate jurisdiction, the court shall impose
15sanctions on the drafting party in accordance with Section
162.4.
 
17    (710 ILCS 5/2.3 new)
18    Sec. 2.3. Fees and costs of arbitration continuance;
19invoice; breach of agreement; sanctions.
20    (a) In an arbitration brought by a consumer or employee,
21either expressly or through application of State or federal
22law or the rules of the arbitrator, that the drafting party pay
23certain fees and costs during the pendency of an arbitration
24proceeding, if the fees or costs required to continue the
25arbitration proceeding are not paid within 30 days after the

 

 

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1due date, the drafting party is in material breach of the
2arbitration agreement, is in default of the arbitration, and
3waives its right to compel the employee or consumer to proceed
4with that arbitration as a result of the material breach.
5    The arbitrator shall provide an invoice for any fees and
6costs required for the arbitration proceeding to continue to
7all of the parties to the arbitration. The invoice shall be
8provided in its entirety, shall state the full amount owed and
9the date that payment is due, and shall be sent to all parties
10by the same means on the same day. To avoid delay, absent an
11express provision in the arbitration agreement stating the
12number of days in which the parties to the arbitration must pay
13any required fees or costs, the arbitrator shall issue all
14invoices to the parties as due upon receipt. Any extension of
15time for the due date shall be agreed upon by all parties.
16    (b) If the drafting party materially breaches the
17arbitration agreement and is in default under subsection (a),
18the employee or consumer may unilaterally elect to:
19        (1) withdraw the claim from arbitration and proceed in
20    a court of appropriate jurisdiction. If the employee or
21    consumer withdraws the claim from arbitration and proceeds
22    with an action in a court of appropriate jurisdiction, the
23    statute of limitations with regard to all claims brought
24    or that relate back to any claim brought in arbitration
25    shall be tolled as of the date of the first filing of a
26    claim in any court, arbitration forum, or other dispute

 

 

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1    resolution forum;
2        (2) continue the arbitration proceeding, if the
3    arbitrator agrees to continue administering the
4    proceeding, notwithstanding the drafting party's failure
5    to pay fees or costs. The neutral arbitrator may institute
6    a collection action at the conclusion of the arbitration
7    proceeding against the drafting party that is in default
8    of the arbitration for payment of all fees associated with
9    the arbitration proceeding brought by a consumer or
10    employee, including the cost of administering any
11    proceedings after the default;
12        (3) petition the court for an order compelling the
13    drafting party to pay all arbitration fees that the
14    drafting party is obligated to pay under the arbitration
15    agreement or the rules of the arbitrator;
16        (4) pay the drafting party's fees and proceed with the
17    arbitration proceeding. As part of the award, the employee
18    or consumer shall recover all arbitration fees paid on
19    behalf of the drafting party without regard to any
20    findings on the merits in the underlying arbitration; or
21        (5) if the employee or consumer withdraws the claim
22    from arbitration and proceeds in a court of appropriate
23    jurisdiction under paragraph (1), both of the following
24    apply:
25            (A) The employee or consumer may bring a motion,
26        or a separate action, to recover all attorney's fees

 

 

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1        and all costs associated with the abandoned
2        arbitration proceeding.
3            (B) The recovery of arbitration fees, interest,
4        and related attorney's fees shall be without regard to
5        any findings on the merits in the underlying action or
6        arbitration.
7    The court shall impose sanctions on the drafting party in
8accordance with Section 2.4.
9    (c) If the employee or consumer continues in arbitration
10under paragraphs (2) through (4) of subsection (b), the
11arbitrator shall impose appropriate sanctions on the drafting
12party, including monetary sanctions, issue sanctions, evidence
13sanctions, or terminating sanctions.
 
14    (710 ILCS 5/2.4 new)
15    Sec. 2.4. Breach of arbitration agreement; monetary
16sanctions; additional sanctions.
17    (a) The court shall impose a monetary sanction against a
18drafting party that materially breaches an arbitration
19agreement pursuant to subsection (a) of Section 2.2 or
20subsection (a) of Section 2.3, by ordering the drafting party
21to pay the reasonable expenses, including attorney's fees and
22costs, incurred by the employee or consumer as a result of the
23material breach.
24    (b) In addition to the monetary sanction described in
25subsection (a), the court may order any of the following

 

 

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1sanctions against a drafting party that materially breaches an
2arbitration agreement under subsection (a) of Section 2.2 or
3subsection (a) of Section 2.3, unless the court finds that the
4one subject to the sanction acted with substantial
5justification or that other circumstances make the imposition
6of the sanction unjust:
7        (1) an evidence sanction by an order prohibiting the
8    drafting party from conducting discovery in the civil
9    action;
10        (2) a terminating sanction by:
11            (A) an order striking out the pleadings or parts
12        of the pleadings of the drafting party; or
13            (B) an order rendering a judgment by default
14        against the drafting party; or
15        (3) a contempt sanction by an order treating the
16    drafting party as in contempt of court.
 
17    (710 ILCS 5/6)  (from Ch. 10, par. 106)
18    Sec. 6. Representation by attorney.
19    A party has the right to be represented by an attorney at
20any proceeding or hearing under this Act. A waiver thereof
21prior to the proceeding or hearing is ineffective. If a party
22is represented by an attorney, papers to be served on the party
23shall be served upon the attorney for that party. Any
24agreement which discriminates against or penalizes a party for
25retaining the services of counsel in an arbitration is null

 

 

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1and void.
2(Source: Laws 1961, p. 3844.)
 
3    (710 ILCS 5/17)  (from Ch. 10, par. 117)
4    Sec. 17. Venue.
5    (a) An initial application shall be made to the court of
6the county in which the agreement provides the arbitration
7hearing shall be held or, if the hearing has been held, in the
8county in which it was held. Otherwise the application shall
9be made in the county where the adverse party resides or has a
10place of business or, if he has no residence or place of
11business in this State, to the court of any county. All
12subsequent applications shall be made to the court hearing the
13initial application unless the court otherwise directs.
14    (b) If the name of the county is not specified, the
15application shall be brought in the county where the party
16seeking arbitration resides or is doing business, and other
17proceedings affecting arbitration are to be brought in the
18county where at least one of the parties resides or is doing
19business or where the arbitration was held or is pending.
20    (c) If there are multiple parties seeking arbitration
21against the same party or parties, the proceeding may be
22brought in any court and county where any of the parties
23seeking arbitration resides or is doing business or where the
24arbitration was held or is pending. All subsequent
25applications shall be made to the court hearing the initial

 

 

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1application unless the court otherwise directs.
2    (d) If there is no county in which the proceeding may be
3brought under this Section, the proceeding may be brought in
4any county.
5(Source: Laws 1961, p. 3844.)

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    710 ILCS 5/1.1 new
4    710 ILCS 5/2.1 new
5    710 ILCS 5/2.2 new
6    710 ILCS 5/2.3 new
7    710 ILCS 5/2.4 new
8    710 ILCS 5/6from Ch. 10, par. 106
9    710 ILCS 5/17from Ch. 10, par. 117