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Legislative Memo

Catherine Tully, Esq.
Director of Government Affairs
T 518.465.7511, ext. 212
www.bcnys.org

BILL:

A.7175 (Kavanagh)

Support

SUBJECT:

Require Arbitration Organizations to Make Public Dispute Resolution Information

 

DATE:

April 24, 2017

 

The Business Council opposes A.7175 (Kavanagh) requiring private arbitration organizations to collect, publish at least quarterly, and provide public access to certain information regarding arbitrations.

Arbitration is an important tool benefiting consumers by providing a fair and accessible means for resolving disputes. The Federal Arbitration Act, 9 U.S.C. §2 states that a written provision in a contract providing for arbitration as a means to settle disputes “…shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”  The United States Supreme Court has consistently ruled that federal and state courts must enforce the Act and “reflects an emphatic federal policy in favor of arbitral dispute resolution’” Marmet Health Care Center, Inc. v. Brown, 132 S.Ct.1201(1202) quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213,217 (1985).

Arbitration enables consumers with grievances to obtain redress for the vast majority of disputes they are likely to have – small, individualized claims for which litigation in court is impractical. It also serves the court system by providing an alternative means of resolution thus freeing up the already overburdened state court.

The American Arbitration Association (AAA) administers consumer arbitrations and has implemented rules and policies tailored for the resolution of consumers’ and employees’ disputes, which provide basic requirements of procedural fairness and afford strong protections for consumers and employers. In fact, the AAA’s Consumer Rules already makes public information about consumer arbitrations administered by the AAA. This includes Rules establishing a registry of businesses with AAA consumer arbitration agreement and another that provides for the publication of redacted consumer arbitration awards.

If the goal of the legislation is to ensure fairness and accountability, it appears as though a system is already in place thus obviating the need for such legislation. For these reasons The Business Council opposes A.7175 (Kavanagh).