How Does Mandatory Arbitration Work for California Contractors?

When it comes to disputes between a contractor and a customer in the state of California, there are several options to be taken. The Contractor’s State Licensing Board (CSLB) offers mandatory arbitration as one such option for resolution.

Unlock Legal, a professional license defense firm, helps contractors when issues arise and a licensing board hearing is required.  Our legal team wants to give you some insight into what mandatory arbitration is, and which cases can be covered.

What is Arbitration?

Arbitration puts a dispute in the hands of a neutral observer.  This impartial participant makes a ruling between consumers and contractors and renders a final decision.

The CSLB will agree to help with the arbitration in cases that meet certain criteria.  Among the resources that the board provides includes, the hearing, the arbitrator, and a state-appointed expert witness per complaint.

It is important to note that only contractors in good-standing can receive these arbitration benefits from the CSLB.  Should a party allege a complaint of fraudulent or deceptive practices, the board will investigate the case.

What Disputes Qualify for Mandatory Arbitration?

According to the Business and Professions Code (BPC) 705, a case qualifies if:

  • The final resolution does not exceed $15,000
  • The contractor’s license is in good standing, without additional active complaints, at the time of the dispute
  • The contractor’s record does not contain a similar allegation or complaint
  • The parties have not agreed to a private arbitration

How Unlock Legal Can Help

When contractors face a hearing or arbitration, Unlock Legal’s team can represent the contractor in the case. While attorneys are not mandatory, it is wise to protect your business and your credibility by having legal representation.

There are many benefits to arbitration, including a speedy and resolution, and the dispute is settled in a much less formal setting. Just a reminder, both parties must abide by the final decision. 

If you are a contractor in a dispute and you elect to take the case to arbitration, Unlock Legal’s team can help.  Do you have a question about our work with contractors?  We invite you to give us a call at 949-239-7061.

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