Assemblyman Moriarty’s Bill to Protect Consumers in Forced Arbitration Proceedings Becomes Law
You may not know it, but if you bought a car recently, have a credit card or bank account, or use a cell phone, you probably agreed not to sue the company you got it from. Hidden in the terms and conditions on your phone, car sales agreements, and even employee contracts are forced arbitration clauses that require you to take all disputes with the company to that company’s hand-picked arbitration organization.
However, thanks to a new law (P.L.2019, c.493) sponsored by Assemblyman Paul D. Moriarty, New Jerseyans will soon have guaranteed protections and transparency in arbitration proceedings.
“Every American has a right to their day in court; if a company does not hold up their end of the bargain, you deserve a fair process to fight back,” the Assemblyman said. “Forced arbitration provisions can be used by companies to rig the system against a consumer. Without this law, companies could choose one of their investors as their arbitrator, and they could win every time, and we would never know.”
The law, which goes into effect May 1st, will prohibit arbitrators from handling arbitration proceedings involving a party in which they have a financial interest. In the case of forced arbitrations, consumers will not be charged the fees or costs incurred by the business, and poorer consumers will not have to pay any other associated fees.
Additionally, the law will bring transparency to the process by requiring larger arbitration organizations to publish information such as the result of each dispute, the type of dispute, and the number of times a company has been involved in arbitration on its website quarterly.
Assemblyman Moriarty believes this law is a good step towards guaranteeing consumers an unbiased process. “This law will shine a much-needed light on a secretive process that may turn up unseen issues. For every issue, we must be ready to take swift action to protect consumers.”