Class Action Waivers

Many contracts are drafted with arbitration clauses.  Most of the time, this type of clause is included in an agreement because it tends to limit litigation costs through the resolution of disputed outside of the judicial system.  Contracts may also include language within arbitration provisions that clearly intend to limit a signing party’s legal remedies in an arbitration hearing.  Specifically, clauses have included a bar on class action claims.  This type of acceptance by the signing party has been known to establish a “class action waiver.”  These waivers may not be enforceable for much longer in the state of Florida.

The Fourth District Court of Appeals recently ruled that an arbitration clause that intends to restrict plaintiffs from creating a class for the purpose of a class action lawsuit is unconscionable and violates public policy.  Thus, in that particular jurisdiction, such class action waivers are hereby unenforceable.