The California Supreme Court's decision in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310 was a doctrinal earthquake. For five years, every Court of Appeal decision held that late arbitration fee payment, for any reason, automatically forfeited arbitration rights under CCP section 1281.98. Hohenshelt replaced that strict-liability framework with an equitable standard: forfeiture applies only when nonpayment was willful, grossly negligent, or fraudulent.
The immediate question for practitioners is whether Hohenshelt can rescue arbitration rights that were already declared forfeited under the prior strict-liability standard. The answer depends on procedural posture. If the forfeiture order is on appeal, Hohenshelt applies directly — the appellate court must evaluate the nonpayment under the equitable standard, not the strict-liability standard that no longer exists. If the forfeiture order is final and no appeal was taken, the path is narrower but not closed: a motion under CCP section 473(b) for relief from a judgment entered under a legal standard that has since been overruled may be viable within the six-month window.
The brief I drafted in one matter applying Hohenshelt illustrates the framework. The employer's arbitration fees were paid 14 days late due to a holiday-period administrative processing delay. Under the prior strict-liability standard, the motion to vacate would have been granted automatically. Under Hohenshelt, we demonstrated through internal communications and payment records that the delay was attributable to a holiday-period invoice processing failure — not strategic conduct, not gross negligence, not fraud. The court denied the motion to vacate.
The practical checklist for any employer facing a section 1281.98 challenge: document the reason for the delay contemporaneously, preserve all internal communications about the payment processing, identify the specific administrative failure that caused the delay, and demonstrate that the employer's general practice is timely payment. Hohenshelt does not excuse all late payments — it excuses non-willful, non-grossly-negligent ones. The evidentiary record is what separates the two.