(TRENTON) – Moving forward on a measure addressing concerns surrounding forced arbitration, the full Assembly recently approved legislation sponsored by Assembly Democrat Paul Moriarty to establish consumer protections related to arbitration procedures.
“Forced arbitration contracts require consumers to waive their right to access the court system if they are wronged,” said Moriarty (D-Gloucester, Camden), who serves as chair of the Assembly Consumer Affairs panel. “Many consumers today are unable to buy a car, cell phone, open a bank account or get a credit card, place a parent into a nursing home, or gain employment without entering into a forced arbitration contract. Most of the time, the term “mandatory arbitration” is buried in the small print of paperwork unknowingly to the consumer. We need more transparency and greater accountability on behalf of the businesses that use this method of resolving disputes.”
The bill (A-4972) would establish certain consumer protections related to arbitration organizations such as prohibiting an arbitration organization from administering consumer arbitration, or providing any other related services if the company has a financial interest in any party or attorney for a party. The bill also puts into place a fair fee structure for low-wage income earning consumers who have been forced into binding arbitration through a standardized consumer contract and prohibits consumers from paying the fees of the opposing party should they lose their dispute.
Moriarty said the measure aims to encourage and empower consumers to pursue resolution to their disputes without fear of financial burden.
“Arbitration organizations have long gone under-regulated and concerns have been raised about forced arbitration proceedings and consumer fairness,” said Moriarty. “Any conficts of interest between arbitration organizations and the parties they’re judging is predjudicial toward the consumer who expects an impartial resolution to their grievance. Those consumers who have financial concerns should not be made to pay exorbitant fees for arbitration for themselves or the other party.”
The measure was approved March 8 by the Assembly Consumer Affairs Committee and will now go to the Senate for further consideration.