The New York Legislature has two bills
pending in the Assembly and Senate which would make public, for the
first time, details of private arbitrations. A09769 and S07146,
sponsored by Matthew Titone and Brian Kavanagh respectively, are both
crafted to provide information related to private arbitrations to the
public. Information such as:
· the name of the non-consumer party,
· the state and zip code in which the
consumer party resided at the time of arbitration, the type of
dispute involved,
· whether the consumer was the
prevailing party,
· on how many occasions, if any, the
non-consumer party has previously been a party in an
arbitration or
mediation administered by that same private arbitration organization,
· the date the private arbitration
organization received the demand for arbitration,
· the date the arbitrator was
appointed,
· the date of disposition by the
arbitrator or private arbitration organization,
· the type of disposition of the
dispute, if known,
· the amount of the claim,
· the amount of any award or
settlement, and any other relief granted,
· the name of the arbitrator,
· the arbitrator's total fee for the
case,
· and the percentage of the
arbitrator's fee allocated to each party.
The bills also define and prohibit
certain financial conflicts of interest. Recurring parties as paying
customers to the arbitrators is not listed as a financial conflict of
interest and still remains a concern for consumers. The bills do
provide for private causes of action and civil penalties for
violations. The New York Attorney General would enforce the
provisions. Neither Bill is retroactive.
The Senate bill was referred to the
Consumer Protection Committee, but has not moved. The Assembly bill,
however, was referred to the Consumer Affairs and protection
Committee and passed on March 6, 2018. Should one of these bills
pass, the impact on private arbitration in favor of consumers would
be significant. Currently, businesses can bind customers with an
arbitration agreement, have multiple arbitration claims brought
against them and other customers and the general public would never
know. Under these bills, customers would have access to the
arbitration history a specific business has with a particular
arbitration company. Should this pass, given arbitration’s
significant and increasing prevalence, it is likely other states will
look into passing similar consumer protections in an effort to shed
light on the currently opaque arbitration process.
While these bills seem to strive to
protect consumers by making important information public, some may
argue the bills go too far by requiring the amount of a settlement,
which is typically confidential. The bills could likely get to the
same destination of providing important information to the public
about companies without requiring this information.
