A. Where an arbitration in a Virginia-connected transaction requires, either expressly or through application of state or federal law or the rules of the arbitration provider, that the drafting party pay certain fees and costs before the arbitration can proceed, such drafting party shall (i) be in material breach of the arbitration agreement; (ii) be in default of the arbitration; and (iii) be deemed to have waived the right to compel such arbitration if the fees or costs to initiate an arbitration proceeding are not paid within 30 days after the due date.
§ 8.01-581.020.Procedural requirements.
Chapter 21. Arbitration and Award · Article 3. Arbitration Fairness Act · Last amended 2026 · Last verified July 16, 2026
In one sentenceIf a drafting party fails to pay required arbitration fees within thirty days, it is in material breach, in default, and deemed to have waived its right to compel arbitration, letting the consumer or employee withdraw to court or compel arbitration with the drafting party covering attorney fees, while several tolling rules protect the limitations period.
Full Text of § 8.01-581.020
B. After a consumer meets the filing requirements necessary to initiate an arbitration with a high-volume arbitration service provider, the arbitration provider shall immediately provide an invoice for any fees and costs required before the arbitration can proceed to all parties to the arbitration. The invoice shall (i) be provided in its entirety; (ii) state the full amount owed and the date that payment is due; (iii) include estimated future charges through the completion of the arbitration; and (iv) be sent to all parties by the same method of delivery on the same day. Absent an express provision in the arbitration agreement stating the number of days within which the parties to the arbitration must pay any required fees or costs, the arbitration provider shall issue all invoices to the parties as due upon receipt.
C. If the drafting party materially breaches the arbitration agreement and is in default under subsection A, the employee or consumer may do either of the following:
1. Withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction; or
2. Compel arbitration in which the drafting party shall pay reasonable attorney fees and costs related to the arbitration.
If the consumer proceeds with an action in a court of appropriate jurisdiction, the court shall impose sanctions on the drafting party.
D. Any statute of limitations as to a claim regarding or relating to a Virginia-connected transaction shall be tolled as of the date a party sends an arbitration service provider a written demand to arbitrate and shall remain tolled until 90 days after the termination or completion of the arbitration.
If the non-drafting party withdraws the claim from arbitration and proceeds with an action in a court of appropriate jurisdiction pursuant to subdivision C 1, the statute of limitations with regard to all claims brought or that relate back to any claim brought in arbitration shall be tolled as of the date of the first filing of a claim in a court, arbitration forum, or other dispute resolution forum.
If an arbitration agreement requires that arbitration of a controversy be demanded or initiated by a party to the arbitration agreement within a certain period of time, the commencement of a civil action by that party based upon that controversy within such period of time shall toll the applicable time limitations contained in the arbitration
agreement with respect to that controversy from the earlier of (i) the date the civil action is commenced until 30 days after a final determination by the court that the party is required to arbitrate the controversy or (ii) 30 days after the final termination of the civil action that was commenced and initiated the tolling.
Plain-English Summary
Arbitration only works as an alternative to court if the company that insisted on it pays for it. This section targets a known problem: businesses that write arbitration clauses into their contracts, then slow-walk or refuse to pay the fees needed to get the arbitration moving. If a drafting party is supposed to pay fees or costs before arbitration can proceed and does not pay within thirty days of the due date, three consequences follow automatically: material breach of the arbitration agreement, default in the arbitration, and a deemed waiver of the right to compel arbitration at all.
To make that deadline enforceable, providers have their own duty once a consumer files: immediately send a complete invoice to every party, by the same method and on the same day, stating the full amount owed, the due date, and estimated future charges through the end of the case. If the arbitration agreement does not specify a payment window, the invoice is due on receipt.
Once the drafting party defaults, the employee or consumer gets to choose. They can walk away from arbitration entirely and sue in court instead — and if they do, the court must sanction the drafting party — or they can stick with arbitration and make the drafting party pay their reasonable attorney fees and costs for doing so.
The section also protects claims from timing out while any of this plays out. The statute of limitations is tolled from the day a party sends a written demand to arbitrate until ninety days after the arbitration ends. If the case moves back to court after a default, the limitations period for related claims is tolled from the date of the first filing in whatever forum started the process. And if the arbitration agreement itself sets a deadline to demand arbitration, filing a civil action within that window tolls the arbitration deadline too, running until thirty days after a final court ruling on arbitrability or thirty days after the civil action itself wraps up, whichever comes first.
Frequently Asked Questions
What happens if the company that wrote the arbitration clause does not pay the required fees on time?
If the fees or costs are not paid within thirty days after the due date, the drafting party is in material breach of the agreement, in default of the arbitration, and deemed to have waived the right to compel arbitration.
What must an arbitration provider’s invoice include?
It must be provided in its entirety, state the full amount owed and the due date, include estimated future charges through completion of the arbitration, and be sent to all parties by the same method on the same day.
What options does a consumer or employee have if the drafting party defaults on fees?
They can withdraw the claim from arbitration and proceed in a court of appropriate jurisdiction, or compel arbitration and have the drafting party pay reasonable attorney fees and costs related to the arbitration.
What happens if the consumer chooses to sue in court after the drafting party defaults?
The court must impose sanctions on the drafting party.
How does this section protect a claim from expiring while arbitration is pending?
The statute of limitations is tolled from the date a party sends a written demand to arbitrate until ninety days after the arbitration terminates or is completed, with related tolling rules covering claims that move back to court.
Amendment History
2026, c. 490.
Source & verification. Section text and amendment history are
reproduced verbatim from the Code of Virginia, published by the
Code of Virginia, Virginia Division of Legislative Automated Systems. Last verified July 16, 2026.
· Official source
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