Bill Text: IL HB5477 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-04-05 - Rule 19(a) / Re-referred to Rules Committee [HB5477 Detail]

Download: Illinois-2023-HB5477-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5477 Introduced , 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
HB5477 LRB103 35069 LNS 65022 b
AN ACT concerning civil law.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Uniform Arbitration Act is amended by
changing Sections 6 and 17 and by adding Sections 1.1, 2.1,
2.2, 2.3, and 2.4 as follows:
(710 ILCS 5/1.1 new)
Sec. 1.1. Definitions. As used in this Act:
"Consumer" means an individual who seeks, uses, or
acquires, by purchase or lease, any goods or services for
personal, family, or household purposes.
"Employee" means any current employee, former employee, or
applicant for employment. "Employee" includes any person who
is, was, or who claims to have misclassified as an independent
contractor or otherwise improperly placed into a category
other than employee or applicant for employment.
(710 ILCS 5/2.1 new)
Sec. 2.1. Notice of intention to arbitrate. A party may
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, or of an officer or agent if the

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party is an association or corporation, 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. Notice or demand shall be served in the
same manner as a summons or by registered or certified mail,
return receipt requested. An application to stay arbitration
must be made by the party served within 20 days after service
upon the party of the notice or demand or the party shall be so
precluded. Notice of such application shall be served in the
same manner as a summons or by registered or certified mail,
return receipt requested. Service of the application may be
made upon the adverse party or upon the adverse party's
attorney if the attorney's name appears on the demand for
arbitration or the notice of intention to arbitrate. Service
of the application by mail shall be timely if the application
is posted within the prescribed period. Any provision in an
arbitration agreement or arbitration rules which waives the
right to apply for a stay of arbitration or proscribes a manner
of notifying a party of an intention to commence arbitration
that is more burdensome than that described in this Section is
null and void.
(710 ILCS 5/2.2 new)
Sec. 2.2. Fees and costs of arbitration initiation;

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invoice; breach of agreement; sanctions.
(a) In an arbitration brought by a consumer or employee
that requires, either expressly or through application of
State or federal law or the rules of the arbitrator, 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 under Section 2.
After an employee or consumer meets the filing
requirements necessary to initiate an arbitration, the
arbitrator shall immediately provide an invoice for any fees
and costs required before the arbitration can proceed to all
of the parties to the arbitration. The invoice shall be
provided in its entirety, shall state the full amount owed and
the date that payment is due, and shall be sent to all parties
by the same means on the same day. To avoid delay, absent an
express provision in the arbitration agreement stating the
number of days in which the parties to the arbitration must pay
any required fees or costs, the arbitrator shall issue all
invoices to the parties as due upon receipt.
(b) If the drafting party materially breaches the
arbitration agreement and is in default under subsection (a),
the employee or consumer may:
(1) withdraw the claim from arbitration and proceed in

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a court of appropriate jurisdiction; or
(2) compel arbitration in which the drafting party
shall pay reasonable attorney's fees and costs related to
the arbitration.
(c) If the employee or consumer withdraws the claim from
arbitration and proceeds with an action in a court of
appropriate jurisdiction under paragraph (1) of subsection
(b), the statute of limitations with regard to all claims
brought or that relate back to any claim brought in
arbitration shall be tolled as of the date of the first filing
of a claim in a court, arbitration forum, or other dispute
resolution forum.
(d) If the employee or consumer proceeds with an action in
a court of appropriate jurisdiction, the court shall impose
sanctions on the drafting party in accordance with Section
2.4.
(710 ILCS 5/2.3 new)
Sec. 2.3. Fees and costs of arbitration continuance;
invoice; breach of agreement; sanctions.
(a) In an arbitration brought by a consumer or employee,
either expressly or through application of State or federal
law or the rules of the arbitrator, that the drafting party pay
certain fees and costs during the pendency of an arbitration
proceeding, if the fees or costs required to continue the
arbitration proceeding are not paid within 30 days after the

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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 the employee or consumer to proceed
with that arbitration as a result of the material breach.
The arbitrator shall provide an invoice for any fees and
costs required for the arbitration proceeding to continue to
all of the parties to the arbitration. The invoice shall be
provided in its entirety, shall state the full amount owed and
the date that payment is due, and shall be sent to all parties
by the same means on the same day. To avoid delay, absent an
express provision in the arbitration agreement stating the
number of days in which the parties to the arbitration must pay
any required fees or costs, the arbitrator shall issue all
invoices to the parties as due upon receipt. Any extension of
time for the due date shall be agreed upon by all parties.
(b) If the drafting party materially breaches the
arbitration agreement and is in default under subsection (a),
the employee or consumer may unilaterally elect to:
(1) withdraw the claim from arbitration and proceed in
a court of appropriate jurisdiction. If the employee or
consumer withdraws the claim from arbitration and proceeds
with an action in a court of appropriate jurisdiction, the
statute of limitations with regard to all claims brought
or that relate back to any claim brought in arbitration
shall be tolled as of the date of the first filing of a
claim in any court, arbitration forum, or other dispute

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

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

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

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and void.
(Source: Laws 1961, p. 3844.)
(710 ILCS 5/17) (from Ch. 10, par. 117)
Sec. 17. Venue.
(a) An initial application shall be made to the court of
the county in which the agreement provides the arbitration
hearing shall be held or, if the hearing has been held, in the
county in which it was held. Otherwise the application shall
be made in the county where the adverse party resides or has a
place of business or, if he has no residence or place of
business in this State, to the court of any county. All
subsequent applications shall be made to the court hearing the
initial application unless the court otherwise directs.
(b) 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.
(c) 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. All subsequent
applications shall be made to the court hearing the initial

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application unless the court otherwise directs.
(d) If there is no county in which the proceeding may be
brought under this Section, the proceeding may be brought in
any county.
(Source: Laws 1961, p. 3844.)
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INDEX
Statutes amended in order of appearance