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Award of Attorney’s Fees Under the Consumer Protection Act May Not Be Subject To An Arbitration Agreement

I obtained a noteworthy ruling this morning in the Circuit Court for Montgomery County while representing a condominium unit owner in a construction defect suit.  The sales agreement provided for arbitration of claims, and contained a provision that precludes the arbitration panel from awarding attorney’s fees.  Under Md. Cts. & Jud. Proc Code Ann.  Sec. 3-221, an arbitration award cannot include attorney’s fees unless provided for in the arbitration agreement.

 The complaint filed on behalf of the unit owner included a cause of action under the Maryland Consumer Protection Act, which provides for the award of attorney’s fees.  The Court accepted our argument that, because the damages that can be awarded under the Consumer Protection Act could not be awarded in arbitration, the Consumer Protection Act claim was not subject to the arbitration agreement, and can proceed in Court before a jury.