Beach Bill to Enhance Consumer Protections for Arbitration Clears Committee

Trenton – Legislation sponsored by Senator James Beach, which would establish certain consumer protections related to arbitration organizations, cleared the Senate Commerce Committee today.

“Unlike administrative or judicial proceedings, arbitration proceedings are not made public, making it difficult for the State to monitor these cases to ensure they are being carried out fairly,” said Senator Beach (D-Burlington/Camden). “More often than not, a private arbitrator is chosen by the company involved in the dispute, giving them an unfair advantage over the consumer. Through this bill, the State will have a better understanding of what is truly happening in these proceedings, allowing us to ensure consumers are being treated fairly.”

The bill, S-1490, would also prevent arbitration organizations from administering cases in which the organization has, or has had, a financial interest.  It would also apply to any arbitration administrator who provides their services for any disputes that may arise and result in forced arbitration between a consumer and a company.

Under the bill, any arbitration organization that is involved in more than 50 consumer arbitration cases per year would be required to collect and publish information regarding each consumer arbitration within the previous five years.

The bill would prohibit an arbitrator from requiring a consumer to pay the fees and costs incurred by an opposing party if the consumer does not prevail in the arbitration.

The bill was released from committee by a vote of 3-2.