Posted on Monday, June 13th, 2016.
Understanding Jury Trial Waivers
Jury waiver clauses take many non-lawyers and even some attorneys by surprise when they first encounter them in a contract. In the United States, we generally have a right to a trial by a jury of our peers, in both the criminal and civil side. Can we, and more importantly, should we agree to waive that right in our contractual agreements?
The right to a jury trial, in the civil context is set forth in the Seventh Amendment of the United States Constitution. See U.S. Const. VII The Seventh Amendment does not apply to the states, however, so individual states may decide whether potential litigants can explicitly waive their right to a jury trial in a pre-dispute contract.[1] There are many types of contractual agreements that may contain these jury waiver provisions, which can be found in anything from an employment agreement, lease, commercial contract or service provider agreement. Jury waiver clauses are seen as a middle ground between arbitration and a jury trial, in that the parties are agreeing to a bench trial by a judge. In both federal and state courts, the standard of enforceability for jury waiver clauses are that they are generally entered into in a voluntary, knowing and intelligent manner. Though the majority of states allow for civil jury trial waivers, two states, California and Georgia, prohibit them. See Bank S., N.A. v. Howard, 264 Ga. 339, 340 (1994); Grafton Partners, L.P. v. Superior Court, 116 P. 3d 479 (2005).
Waiving the right to a civil jury trial inherently may seem unfair to many non-lawyers. Most people believe that the facts of a case can be most fairly determined by a jury, rather than a sole judge or even a panel of arbitrators. Yet the cons of a jury trial, at least in civil litigation, almost entirely outweigh the pros of having a jury hear a dispute. Jury trials are long and incredibly expensive. Eliminating them in favor of a bench trial or arbitration can eliminate the expensive and time-consuming process of voir dire and other jury centric procedures.
In fact, historically, juries were never meant to hear complex cases, but were devised as a method to resolve disputes at English Common law, at a time when people were tied to the land, disputes were simple, and everyone already knew the parties involved. Juries were not expected to be able to understand intellectual property disputes involving complicated chemical processes or intricate business transactions involving global parties. Today, jury consultants are often hired in an effort to identify both the “best” jurors and the most effective way the parties can present the legal issues to them in an easily understood manner. Yet even after all the time and money spent picking them, juries are notoriously unreliable and can return outrageous verdicts.
Alternatively, parties who waive jury trials, in pre-dispute contractual agreement can eliminate many of these problems. Complex cases can be agreed to be resolved by experienced judges who already have an understanding of the law involved. Additionally, waiving the right to a jury trial does not preclude rights to the judicial process. A standalone jury waiver clause contains an agreement to a bench trial within the judicial system, as an alternative to consenting to arbitration (and some agreements will contain a jury trial waiver clause if an arbitration clause is found unenforceable). A bench trial also preserves the right to an appeal the waiver of, which is often the most controversial aspect of an arbitration clause. Additionally, arbitrations can be extremely expensive, sometimes costing as much as jury trials. Thus, bench trials can be a more reasonable alternative.
Accordingly, the decision to include a jury trial waiver into various contractual agreements can have many ramifications in the future if the parties ever become involved in a dispute. If you are drafting a contractual agreement and wondering if a jury waiver clause is appropriate for you, or if you have any other questions concerning contractual agreements, please contact one of our members at Trimboli & Prusinowski, LLC for assistance.
[1] Parties may also implicitly waive their right to a jury trial through other means such as arbitrations clauses, which may or may not explicitly contain jury trial waivers.
