Enforcement Of Judicial Reference Clauses Discretionary In Multi-Party Cases

The California Supreme Court has taken another step toward eliminating the ability of contracting parties to waive the right to a jury trial in advance of a dispute. In 2005, the Court held that jury waivers were unenforceable in Grafton Partners LP v. Superior Court, 36 Cal. 4th 944 (2005). According to the Court, the only two enforceable pre-dispute jury waiver provisions are an agreement to arbitrate and an agreement to submit the dispute for judicial reference under Code of Civil Procedure Section 638.

Since Grafton, parties have routinely included judicial reference procedures in their contracts as a means of alternative dispute resolution that provides for the application of regular court rules and judicial review, and perhaps a speedier time to trial with less associated cost than arbitration. Section 638 provides that "[a] referee may be appointed . . . upon the motion of a party to a written contract . . . that provides that any controversy arising therefrom