S T A T E   O F   N E W   Y O R K
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                                  8191

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                              June 11, 2015
                               ___________

Introduced by M. of A. TITONE -- read once and referred to the Committee
  on Judiciary

AN  ACT  to amend the civil practice law and rules, in relation to arbi-
  tration agreements

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The civil practice law and rules is amended by adding a new
section 7500 to read as follows:
  S 7500. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A) "ARBITRATION" MEANS A FORM OF DISPUTE RESOLUTION THAT IS AN ALTER-
NATIVE  TO  LITIGATION,  IN  WHICH  THE PARTIES AGREE TO BE BOUND BY THE
DETERMINATION OF A NEUTRAL THIRD PARTY ARBITRATOR.
  (B) "NEUTRAL THIRD PARTY ARBITRATOR" MEANS AN ARBITRATOR OR  PANEL  OF
ARBITRATORS EACH OF WHOM DOES NOT HAVE AN UNDISCLOSED KNOWN, DIRECT, AND
MATERIAL  INTEREST  IN  THE  OUTCOME  OF THE ARBITRATION PROCEEDING OR A
KNOWN, EXISTING, AND SUBSTANTIAL RELATIONSHIP WITH A PARTY, COUNSEL,  OR
REPRESENTATIVE OF A PARTY.
  S  2.  Section 7501 of the civil practice law and rules, as amended by
chapter 532 of the laws of 1963, is amended to read as follows:
  S 7501. Effect of arbitration  agreement.    A  written  agreement  to
submit any controversy thereafter arising or any existing controversy to
arbitration  is  enforceable without regard to the justiciable character
of the controversy and confers jurisdiction on the courts of  the  state
to enforce it and to enter judgment on an award; PROVIDED, HOWEVER, THAT
ANY  LANGUAGE REQUIRING THE CONTROVERSY BE SUBMITTED TO AN ARBITRATOR OR
ARBITRATION ORGANIZATION THAT IS NOT A NEUTRAL THIRD  PARTY  ARBITRATOR,
AS  THAT  TERM  IS  DEFINED  IN  SUBDIVISION (B) OF SECTION SEVENTY-FIVE
HUNDRED OF THIS ARTICLE, SHALL BE DEEMED VOID; PROVIDED THAT IT SHALL BE
VALID WITH RESPECT TO THE REQUIREMENT  THAT  THE  CONTROVERSY  BE  ARBI-
TRATED. THE REQUIREMENT THAT THE CONTROVERSY BE HEARD BY A NEUTRAL THIRD
PARTY ARBITRATOR MAY NOT BE WAIVED BY PARTY PRIOR TO THE SERVICE ON SUCH

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11404-02-5
              

A. 8191                             2

PARTY  OF  A DEMAND FOR ARBITRATION. UPON DISCLOSURE PURSUANT TO SECTION
SEVENTY-FIVE HUNDRED FIVE-A OF THIS ARTICLE  OF  A  KNOWN,  DIRECT,  AND
MATERIAL  INTEREST  IN  THE  OUTCOME  OF THE ARBITRATION PROCEEDING OR A
KNOWN  EXISTING  AND  SUBSTANTIAL RELATIONSHIP WITH A PARTY, COUNSEL, OR
REPRESENTATIVE OF A PARTY, A PARTY SHALL BE DEEMED TO  HAVE  WAIVED  ANY
OBJECTION  TO THE ARBITRATOR OR COMPOSITION OF ANY ARBITRATION PANEL, BY
FAILING TO RAISE SAME PRIOR TO THE COMMENCEMENT OF THE ARBITRATION HEAR-
ING.  In determining any matter arising under this  article,  the  court
shall  not  consider whether the claim with respect to which arbitration
is sought is tenable, or otherwise pass upon the merits of the dispute.
  SUCH ARBITRATION SHALL BE CONDUCTED BY A NEUTRAL THIRD PARTY  ARBITRA-
TOR  UNDER REGULATIONS ESTABLISHED BY THE ATTORNEY GENERAL.  APPOINTMENT
OF AN ARBITRATOR SHALL ENSURE THE PERSONAL OBJECTIVITY OF  ITS  ARBITRA-
TORS  AND  THE RIGHT OF EACH PARTY TO PRESENT ITS CASE, TO BE IN ATTEND-
ANCE DURING ANY PRESENTATION MADE BY THE OTHER PARTY  AND  TO  REBUT  OR
REFUTE SUCH PRESENTATION.
  S  3.  The  civil  practice  law  and rules is amended by adding a new
section 7505-a to read as follows:
  S 7505-A. DISCLOSURE BY ARBITRATOR. (A) BEFORE ACCEPTING  APPOINTMENT,
AN INDIVIDUAL WHO IS REQUESTED TO SERVE AS AN ARBITRATOR, AFTER MAKING A
REASONABLE  INQUIRY,  SHALL  DISCLOSE TO ALL PARTIES TO THE AGREEMENT TO
ARBITRATE AND THE ARBITRATION PROCEEDING AND TO  ANY  OTHER  ARBITRATORS
ANY KNOWN FACTS THAT A REASONABLE PERSON WOULD CONSIDER LIKELY TO AFFECT
THE  IMPARTIALITY  OF  THE  ARBITRATOR  IN  THE  ARBITRATION PROCEEDING,
INCLUDING:
  (1) A FINANCIAL OR PERSONAL INTEREST IN THE OUTCOME OF THE ARBITRATION
PROCEEDING; AND
  (2) AN EXISTING OR PAST RELATIONSHIP WITH ANY OF THE  PARTIES  TO  THE
AGREEMENT  TO  ARBITRATE OR THE ARBITRATION PROCEEDING, THEIR COUNSEL OR
REPRESENTATIVES, A WITNESS, OR ANOTHER ARBITRATOR.
  (B) AN ARBITRATOR HAS A  CONTINUING  OBLIGATION  TO  DISCLOSE  TO  ALL
PARTIES TO THE AGREEMENT TO ARBITRATE AND THE ARBITRATION PROCEEDING AND
TO  ANY  OTHER  ARBITRATORS  ANY  FACTS THAT THE ARBITRATOR LEARNS AFTER
ACCEPTING APPOINTMENT WHICH A REASONABLE PERSON WOULD CONSIDER LIKELY TO
AFFECT THE IMPARTIALITY OF THE ARBITRATOR.
  (C) IF AN ARBITRATOR DISCLOSES A FACT REQUIRED BY SUBDIVISION  (A)  OR
(B)  OF  THIS  SECTION TO BE DISCLOSED AND A PARTY TIMELY OBJECTS TO THE
APPOINTMENT OR CONTINUED SERVICE OF THE ARBITRATOR BASED UPON  THE  FACT
DISCLOSED,  THE  OBJECTION MAY BE A GROUND FOR VACATING AN AWARD MADE BY
THE ARBITRATOR.
  (D) IF THE ARBITRATOR DID NOT DISCLOSE A FACT AS REQUIRED BY  SUBDIVI-
SION  (A)  OR (B) OF THIS SECTION, UPON TIMELY OBJECTION BY A PARTY, THE
COURT MAY VACATE AN AWARD.
  (E) AN ARBITRATOR APPOINTED AS  A  NEUTRAL  ARBITRATOR  WHO  DOES  NOT
DISCLOSE  A  KNOWN,  DIRECT, AND MATERIAL INTEREST IN THE OUTCOME OF THE
ARBITRATION PROCEEDING OR A KNOWN, EXISTING, AND  SUBSTANTIAL  RELATION-
SHIP WITH A PARTY IS PRESUMED TO ACT WITH EVIDENT PARTIALITY.
  S  4.  Section  7506 of the civil practice law and rules is amended to
read as follows:
  S 7506. Hearing. (a) Oath of arbitrator. Before hearing any testimony,
an arbitrator shall be sworn to hear and decide the  controversy  faith-
fully and fairly by an officer authorized to administer an oath.
  (b)  Time and place. The arbitrator shall appoint a time and place for
the hearing and notify the parties in writing personally  or  by  regis-
tered or certified mail not less than eight days before the hearing. The
arbitrator may adjourn or postpone the hearing. The court, upon applica-

A. 8191                             3

tion  of  any  party, may direct the arbitrator to proceed promptly with
the hearing and determination of the controversy.
  (c)  Evidence.  The  parties  are  entitled  to  be  heard, to present
evidence and to cross-examine witnesses.
  (D) POSTPONEMENTS AND ADJOURNMENTS.  THE ARBITRATOR MAY FOR GOOD CAUSE
POSTPONE OR ADJOURN THE HEARING UPON REQUEST OF  A  PARTY  OR  UPON  THE
ARBITRATOR'S OWN INITIATIVE. Notwithstanding the failure of a party duly
notified to appear, the arbitrator may hear and determine the controver-
sy  upon the evidence produced.  IF A PARTY TO AN ARBITRATION INTENDS TO
INTRODUCE AN EXPERT WITNESS AT THE HEARING, THE IDENTITY OF  THE  EXPERT
WITNESS  MUST BE GIVEN TO ALL PARTIES AT LEAST SEVEN CALENDAR DAYS PRIOR
TO THE HEARING.
  [(d)] (E) Representation by attorney. A party  has  the  right  to  be
represented  by  an  attorney and may claim such right at any time as to
any part of the arbitration or hearings which have not taken place. This
right may not be waived. If a  party  is  represented  by  an  attorney,
papers  to  be  served  on  the party shall be served upon his attorney.
PERSONS HAVING A DIRECT INTEREST IN  THE  ARBITRATION  ARE  ENTITLED  TO
ATTEND HEARINGS. IT SHALL BE DISCRETIONARY WITH THE ARBITRATOR TO PERMIT
THE ATTENDANCE OF ANY OTHER PERSONS.
  [(e)] (F) Determination by majority. The hearing shall be conducted by
all  the  arbitrators,  but  a  majority  may determine any question and
render an award.
  [(f)] (G) Waiver.  Except  as  provided  in  subdivision  [(d)](E),  a
requirement  of  this  section  may  be waived by written consent of the
parties and it is waived if the parties continue  with  the  arbitration
without objection.
  S  5.  Section 7507 of the civil practice law and rules, as amended by
chapter 952 of the laws of 1981, is amended to read as follows:
  S 7507. Award; form; time;  delivery.    (A)  Except  as  provided  in
section  7508, the award shall be in writing, signed and affirmed by the
arbitrator making it within the time fixed by the agreement, or, if  the
time is not fixed, within such time as the court orders.
  (B)  THE AWARD SHALL STATE THE ISSUES IN DISPUTE AND SHALL CONTAIN THE
ARBITRATOR'S FINDINGS OF FACT AND CONCLUSIONS OF LAW.  THE  AWARD  SHALL
CONTAIN A DECISION ON ALL ISSUES SUBMITTED TO THE ARBITRATOR.
  (C)  The parties may in writing extend the time either before or after
its expiration. A party waives the objection that an award was not  made
within the time required unless he notifies the arbitrator in writing of
his objection prior to the delivery of the award to him OR HER.
  (D)  The arbitrator shall deliver a copy of the award to each party in
the manner provided in the agreement, or, if no provision  is  so  made,
personally or by registered or certified mail, return receipt requested.
  S  6.  Subparagraph  (iv) of paragraph 1 of subdivision (b) of section
7511 of the civil practice law and rules is amended and two new subpara-
graphs (v) and (vi) are added to read as follows:
  (iv) failure to follow the procedure of this article, unless the party
applying to vacate the award continued with the arbitration with  notice
of the defect and without objection[.]; OR
  (V) WHERE THE ARBITRATOR WAS GUILTY OF MISCONDUCT IN REFUSING TO POST-
PONE  THE  HEARING,  UPON SUFFICIENT CAUSE SHOWN, OR IN REFUSING TO HEAR
EVIDENCE PERTINENT AND MATERIAL TO THE  CONTROVERSY;  OR  OF  ANY  OTHER
MISBEHAVIOR BY WHICH THE RIGHTS OF ANY PARTY HAVE BEEN PREJUDICED; OR
  (VI)  THE  ARBITRATOR  EVIDENCED  A  MANIFEST  DISREGARD OF THE LAW IN
RENDERING THE AWARD.

A. 8191                             4

  S 7. The civil practice law and rules is amended by adding  three  new
sections 7515, 7516 and 7517 to read as follows:
  S  7515.  PROHIBITED  PREDISPUTE ARBITRATION AGREEMENTS.  (A) THE TERM
"CONSUMER DISPUTE" MEANS A DISPUTE BETWEEN AN INDIVIDUAL  WHO  SEEKS  OR
ACQUIRES  REAL OR PERSONAL PROPERTY, SERVICES (INCLUDING SERVICES RELAT-
ING TO SECURITIES AND OTHER INVESTMENTS), MONEY, OR CREDIT FOR PERSONAL,
FAMILY, OR HOUSEHOLD PURPOSES AND THE SELLER OR PROVIDER OF SUCH PROPER-
TY, SERVICES, MONEY, OR CREDIT;
  (B) THE TERM "EMPLOYMENT DISPUTE" MEANS A DISPUTE BETWEEN AN  EMPLOYER
AND EMPLOYEE ARISING OUT OF THE RELATIONSHIP OF EMPLOYER AND EMPLOYEE AS
DEFINED  IN SECTION 3 OF THE FAIR LABOR STANDARDS ACT OF 1938 (29 U.S.C.
203); AND
  (C) THE TERM "PREDISPUTE ARBITRATION AGREEMENT" MEANS ANY AGREEMENT TO
ARBITRATE A DISPUTE THAT HAD NOT YET ARISEN AT THE TIME OF THE MAKING OF
THE AGREEMENT.
  (D) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE, NO PREDISPUTE
ARBITRATION AGREEMENT SHALL BE VALID OR ENFORCEABLE IF IT REQUIRES ARBI-
TRATION OF AN EMPLOYMENT DISPUTE, CONSUMER DISPUTE,  ANTITRUST  DISPUTE,
OR CIVIL RIGHTS DISPUTE.
  S  7516.  PROHIBITED PROVISIONS.  (A) PROHIBITION OF EFFECT OF CERTAIN
ARBITRATION CLAUSES OR AGREEMENTS.  FORCED ARBITRATION CLAUSES OR AGREE-
MENTS COVERING CONSUMERS AND EMPLOYEES ARE CONTRARY TO  THE  ESTABLISHED
PUBLIC  POLICY OF THIS STATE. BECAUSE EMPLOYEES AND CONSUMERS ARE FORCED
TO ASSENT TO THESE AGREEMENTS AS A CONDITION OF  BEING  AN  EMPLOYEE  OR
CONSUMER  BEFORE  ANY  DISPUTE HAS ARISEN WITH THE EMPLOYER OR MERCHANT,
THESE AGREEMENTS DO NOT  OFFER  EMPLOYEES  AND  CONSUMERS  A  MEANINGFUL
CHOICE  ABOUT  HOW  TO  RESOLVE  THEIR  DISPUTES  WITH  THE  EMPLOYER OR
MERCHANT. IN ADDITION, FORCED ARBITRATION AGREEMENTS  PREVENT  EMPLOYEES
AND CONSUMERS FROM EFFECTIVELY VINDICATING THEIR RIGHTS UNDER STATE LAW.
FOR  THESE REASONS, EXCEPT WHEN INCONSISTENT WITH FEDERAL LAW, THE STATE
PROHIBITS THE FORMATION AND ENFORCEMENT OF FORCED ARBITRATION AGREEMENTS
IN EMPLOYMENT AND CONSUMER CONTRACTS.
  (B) PROHIBITION OF ARBITRATION CLAUSES IN  INSURANCE  AGREEMENTS.    A
FORCED  ARBITRATION AGREEMENT WITHIN OR PART OF ANY WRITTEN CONTRACT FOR
INSURANCE WITH A CONSUMER  OR  OTHER  WRITTEN  AGREEMENT  INVOLVING  THE
OFFERING OF INSURANCE TO A CONSUMER IS INVALID, UNENFORCEABLE, AND VOID.
ANY  SUCH  ARBITRATION  AGREEMENT SHALL BE CONSIDERED SEVERABLE, AND ALL
OTHER PROVISIONS OF THE CONTRACT FOR INSURANCE SHALL  REMAIN  IN  EFFECT
AND GIVEN FULL FORCE.
  (C)  PROHIBITION  OF  ARBITRATION  CLAUSES IN EMPLOYMENT CONTRACTS FOR
WORKERS EXEMPTED FROM THE FEDERAL ARBITRATION ACT.  A FORCED ARBITRATION
AGREEMENT WITHIN OR PART  OF  ANY  WRITTEN  CONTRACT  OF  EMPLOYMENT  OF
SEAMEN,  RAILROAD  EMPLOYEES,  OR  ANY OTHER CLASS OF WORKERS ENGAGED IN
FOREIGN OR INTERSTATE COMMERCE IS UNENFORCEABLE AND VOID. ANY SUCH ARBI-
TRATION  AGREEMENT  SHALL  BE  CONSIDERED  SEVERABLE,  AND   ALL   OTHER
PROVISIONS  OF  THE EMPLOYMENT CONTRACT SHALL REMAIN IN EFFECT AND GIVEN
FULL FORCE.
  (D) PROHIBITION OF ARBITRATION CLAUSES THAT ARE NOT GOVERNED BY FEDER-
AL LAW.  ANY FORCED ARBITRATION AGREEMENT, OR  PORTION  THEREOF,  IN  AN
EMPLOYMENT  OR  CONSUMER  CONTRACT  IS INVALID, UNENFORCEABLE, AND VOID,
WHEN THE ENFORCEABILITY OF SUCH ARBITRATION AGREEMENT, OR THE PORTION AT
ISSUE, IS GOVERNED BY STATE LAW. ANY SUCH ARBITRATION AGREEMENT SHALL BE
CONSIDERED  SEVERABLE,  AND  ALL  OTHER  PROVISIONS  OF  THE  EMPLOYMENT
CONTRACT SHALL REMAIN IN EFFECT AND GIVEN FULL FORCE.
  S 7517. REQUIREMENTS.  (A) ANY PRIVATE ENTITY THAT ADMINISTERS FIVE OR
MORE  ARBITRATIONS A YEAR IN THIS STATE INVOLVING A CONSUMER OR EMPLOYEE

A. 8191                             5

SHALL COLLECT AND PUBLISH THE FOLLOWING INFORMATION ABOUT  EACH  OF  ITS
ARBITRATIONS   FOR  AT  LEAST  FIVE  YEARS  AFTER  THE  ARBITRATION  HAS
COMPLETED:
  (1) THE NAMES OF THE PARTIES TO THE ARBITRATION;
  (2) THE PARTY THAT FILED THE ARBITRATION CLAIM;
  (3)  THE TYPE OF DISPUTE INVOLVED, INCLUDING GOODS OR SERVICES, INSUR-
ANCE, CREDIT, DEBT COLLECTION, OR EMPLOYMENT;
  (4) THE PREVAILING PARTY;
  (5) WHETHER THE CONSUMER OR EMPLOYEE WAS REPRESENTED BY AN ATTORNEY;
  (6) THE DATE THE COMPANY ADMINISTERING THE  ARBITRATION  RECEIVED  THE
DEMAND  FOR  ARBITRATION, THE DATE THE ARBITRATOR WAS APPOINTED, AND THE
DATE OF THE ARBITRATION'S DISPOSITION;
  (7) WHETHER THE ARBITRATION RESULTED IN AN IN-PERSON HEARING;
  (8) WHETHER THE PARTIES  PROVIDED  EACH  OTHER  WITH  ANY  PRE-HEARING
DISCOVERY;
  (9)  THE  AMOUNT  OF THE CLAIM, THE AMOUNT OF THE AWARD, AND ANY OTHER
RELIEF GRANTED, IF ANY;
  (10) THE NAME OF THE ARBITRATOR, HIS OR HER TOTAL FEE  FOR  THE  CASE,
AND THE PERCENTAGE OF THE ARBITRATOR'S FEE PAID BY EACH PARTY; AND
  (11) THE ARBITRATOR'S PROFESSIONAL AFFILIATIONS.
  (B) INFORMATION PUBLISHED PURSUANT TO THIS SECTION SHALL BE UPDATED AT
LEAST QUARTERLY, AND MADE AVAILABLE TO THE PUBLIC IN A COMPUTER-SEARCHA-
BLE  FORMAT,  WHICH  SHALL  BE  ACCESSIBLE AT THE WEBSITE OF THE PRIVATE
COMPANY ADMINISTERING THE  ARBITRATIONS,  IF  ANY,  AND  ON  PAPER  UPON
REQUEST.
  (C)  NO  PRIVATE  COMPANY  SHALL  HAVE  ANY  LIABILITY FOR COLLECTING,
PUBLISHING, OR DISTRIBUTING THE INFORMATION IN ACCORD WITH THIS SECTION.
  (D) THE PROVISIONS OF THIS SECTION SHALL NOT BE DEEMED TO REQUIRE  THE
DISCLOSURE  OF ANY INFORMATION NOT SPECIFICALLY REQUIRED TO BE DISCLOSED
PURSUANT TO SUBDIVISION (A) OF THIS SECTION.
  S 8. Enforcement.  Any private person and any  enforcement  agency  or
official  responsible for enforcing the provisions of this act may bring
suit  for  injunctive  relief  against  an  entity  that  violates  such
provisions,  and may recover reasonable attorney fees and other costs if
an injunction or equivalent relief is awarded. Injunctive  relief  shall
be  the  only  relief available in a suit arising from failure to comply
with this act.
  S 9. Severability.  If any provision of this act  or  the  application
thereof  to  any person or circumstance is held invalid, such invalidity
shall not affect other provisions or applications of this act  that  can
be  given  effect  without  the invalid provision or application, and to
that end the provisions of this act are declared to be severable.
  S 10. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.