Relates to arbitration organizations; requires private arbitration organizations involved in fifty or more consumer arbitrations per year to collect, publish at least quarterly, and make available to the public in a computer-searchable database certain information relating to such arbitrations; prohibits financial conflicts of interest.
STATE OF NEW YORK
2021-2022 Regular Sessions
January 27, 2021
Introduced by Sen. KAVANAGH -- read twice and ordered printed, and when
printed to be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to arbitration
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 399-c of the general business law
2 is amended by adding a new paragraph e to read as follows:
3 e. The term "arbitration organization" shall mean an association,
4 agency, board, commission, or other entity that is neutral and initi-
5 ates, sponsors, or administers an arbitration proceeding or is involved
6 in the appointment of an arbitrator unless such involvement is limited
7 to a contractual relationship that authorizes the use of arbitration.
8 § 2. Section 399-c of the general business law is amended by adding
9 three new subdivisions 3, 4 and 5 to read as follows:
10 3. a. Any private arbitration organization that administers or is
11 otherwise involved in fifty or more consumer arbitrations a year shall
12 collect, publish at least quarterly, and make available to the public in
13 a computer-searchable database that permits searching with multiple
14 search terms in the same search, which shall be accessible at the inter-
15 net website of the private arbitration organization, if any, and on
16 paper upon request, all of the following information regarding each
17 consumer arbitration it has administered or otherwise been involved in
18 within the preceding five years:
19 (1) The name of the non-consumer party, if the non-consumer party is a
20 corporation or other business entity;
21 (2) The state and zip code in which the consumer party resided at the
22 time of arbitration;
23 (3) The type of dispute involved, including goods, banking, insurance,
24 health care, employment, and, if it involves employment, the amount of
25 the employee's annual wage divided into the following ranges: less than
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
S. 3123 2
1 one hundred thousand dollars, one hundred thousand dollars to two
2 hundred fifty thousand dollars, inclusive, and over two hundred fifty
3 thousand dollars;
4 (4) Whether the consumer was the prevailing party;
5 (5) On how many occasions, if any, the non-consumer party has previ-
6 ously been a party in an arbitration or mediation administered by the
7 private arbitration organization;
8 (6) Whether the consumer party was represented by an attorney and, if
9 so, the identifying information for that attorney, including the attor-
10 ney's name, the name of the attorney's firm, and the city in which the
11 attorney's office is located;
12 (7) The date the private arbitration organization received the demand
13 for arbitration, the date the arbitrator was appointed, and the date of
14 disposition by the arbitrator or private arbitration organization;
15 (8) The type of disposition of the dispute, if known, including with-
16 drawal, abandonment, settlement, award after hearing, award without
17 hearing, default, or dismissal without hearing;
18 (9) The amount of the claim, the amount of any award or settlement,
19 and any other relief granted; and
20 (10) The name of the arbitrator, the arbitrator's total fee for the
21 case, and the percentage of the arbitrator's fee allocated to each
23 b. If the information required by paragraph a of this subdivision is
24 provided by the private arbitration organization in a computer-searcha-
25 ble format at the organization's internet website and may be downloaded
26 without any fee, the organization may charge the actual cost of copying
27 to any person who requests the information on paper. If the information
28 required by paragraph a of this subdivision is not accessible through
29 the use of the internet, the organization shall provide that information
30 without charge to any person who requests the information on paper.
31 c. This subdivision shall apply to any consumer arbitration commenced
32 on or after January first, two thousand twenty-three.
33 d. This subdivision shall not apply to arbitrations involving disputes
34 between consumers.
35 e. The provisions of this subdivision shall not apply to agreements
36 negotiated with any labor union through collective bargaining.
37 4. a. No private arbitration organization may administer a consumer
38 arbitration to be conducted in this state, or provide any other services
39 related to a consumer arbitration, if:
40 (1) the organization has, or within the preceding year has had, a
41 financial interest in any party or attorney for a party; or
42 (2) any party or attorney for a party has, or within the preceding
43 year has had, any type of financial interest in the private arbitration
45 b. This subdivision shall operate only prospectively so as not to
46 prohibit the administration of consumer arbitrations on the basis of
47 financial interests held prior to January first, two thousand twenty-
49 c. For the purposes of this subdivision, the term "financial interest"
50 means ownership of more than a one percent legal or equitable interest
51 in a party, or a legal or equitable interest in a party of a fair market
52 value in excess of one thousand five hundred dollars, or a relationship
53 as director, advisor or other active participant in the affairs of a
54 party, except as follows:
S. 3123 3
1 (1) Ownership in a mutual or common investment fund that holds securi-
2 ties is not a "financial interest" in those securities unless the arbi-
3 trator participates in the management of the fund.
4 (2) An office in an educational, religious, charitable, fraternal, or
5 civic organization is not a "financial interest" in securities held by
6 the organization.
7 (3) The proprietary interest of a policyholder in a mutual insurance
8 organization, or a depositor in a mutual savings association, or a simi-
9 lar proprietary interest, is a "financial interest" in the organization
10 only if the outcome of the proceeding could substantially affect the
11 value of the interest.
12 5. a. Whenever there shall be a violation of this section, an appli-
13 cation may be made by the attorney general in the name of the people of
14 the state of New York to a court or justice having jurisdiction by a
15 special proceeding to issue an injunction, and upon notice to the
16 defendant of not less than five days, to enjoin and restrain the contin-
17 uance of such violation; and if it shall appear to the satisfaction of
18 the court or justice that the defendant has, in fact, violated this
19 section, an injunction may be issued by such court or justice, enjoining
20 and restraining any further violation, without requiring proof that any
21 person has, in fact, been injured or damaged thereby. In any such
22 proceeding, the court may make allowances to the attorney general as
23 provided in paragraph six of subdivision (a) of section eighty-three
24 hundred three of the civil practice law and rules, and direct restitu-
25 tion. In connection with any such proposed application, the attorney
26 general is authorized to take proof and make a determination of the
27 relevant facts and to issue subpoenas in accordance with the civil prac-
28 tice law and rules.
29 b. Notwithstanding any right of action granted to the attorney general
30 pursuant to this section, any person who has been injured by reason of a
31 violation of this section may bring an action in his or her own name to
32 enjoin such unlawful act, an action to recover his or her actual damages
33 or both such actions. The court may award reasonable attorney's fees to
34 a prevailing plaintiff.
35 c. Whenever the court shall determine that a violation of this
36 section has occurred, the court may impose a civil penalty of not more
37 than two thousand dollars for such violation.
38 d. Each written contract offered by a non-consumer party and subse-
39 quently entered into in violation of subdivision two of this section
40 shall constitute a separate violation.
41 § 3. This act shall take effect on the one hundred eightieth day after
42 it shall have become a law.