S T A T E O F N E W Y O R K
________________________________________________________________________
7445
2017-2018 Regular Sessions
I N A S S E M B L Y
April 25, 2017
___________
Introduced by M. of A. TITONE, WEINSTEIN, KAVANAGH, DINOWITZ -- (at
request of the Office of Court Administration) -- read once and
referred to the Committee on Judiciary
AN ACT to amend the civil practice law and rules, in relation to
contracts in small print, procedural reciprocity for arbitration
agreements in consumer transactions and consumer arbitration; to amend
the general obligations law, in relation to the prohibition of certain
contractual agreements to arbitrate personal injury and wrongful death
claims; to amend the executive law, in relation to powers and duties
of the consumer protection division and contracts of adhesion; and to
amend the public health law, in relation to protecting against certain
contracts of adhesion in the provision of health care
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known as the access to justice act of
2017: remedying injustices arising out of contracts of adhesion in the
context of consumer contracts.
§ 2. Legislative intent. The legislature finds that it is the public
policy of this state to ensure access to justice for all New Yorkers.
The unified court system in this state supports and encourages arbi-
tration in the civil practice context and arbitration is one of a varie-
ty of alternative dispute resolution tools which help parties resolve
disputes without a trial. Arbitration has proven to be most successful
when agreed to between parties of equal bargaining power as part of an
arm's length agreement. A vital component of access to justice is to
preserve, when possible, the ability of New Yorkers to choose either
arbitration or litigation when seeking a remedy if an injury or dispute
has occurred. When an arbitration clause is foisted upon a party to a
contract, that choice is precluded; thus access to justice may be denied
at the very commencement of the parties' relationship. The legislature
further finds that the prevalence of arbitration agreements in contracts
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09878-01-7
A. 7445 2
of adhesion in transactions for personal, family or household services
New Yorkers cannot do without - e.g., telephone, internet, nursing home,
credit cards - and the interpretation of such arbitration agreements by
the courts has resulted in conflicting decisions and substantial inequi-
ty between the parties. One area of concern is reflected in the effect
of recent arbitrations on contracts affecting the rights, remedies or
obligations between health care providers and patients relative to
personal injuries to, or wrongful death of, patients. This act amends
the law to preclude predatory behavior against some of the most vulner-
able New Yorkers against the public policy of this state, to protect
fairness in consumer transactions and other types of transactions that
affect the health and well-being of New Yorkers, to create remedies
targeting unconscionable contracts at the state level and to ensure
access to justice for consumers.
§ 3. 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:
§ 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. 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. THE COMMENCEMENT OF AN
ACTION IN A COURT OF LAW BY ANY PERSON TO ENFORCE A CONTRACT ENTERED
INTO BY, OR DELIVERED TO, A RESIDENT OF THIS STATE THAT INVOLVES A
CONSUMER TRANSACTION, AS DEFINED IN SECTION FORTY-FIVE HUNDRED FORTY-
FOUR OF THIS CHAPTER, SHALL CONSTITUTE A WAIVER OF THE ENFORCEABILITY OF
THE ARBITRATION CLAUSE IN THAT CONTRACT OR AGREEMENT. SUCH WAIVER SHALL
NOT APPLY TO ANY ACTION BROUGHT TO ENFORCE THE ARBITRATION CLAUSE, TO
STAY ARBITRATION OR IN AID OF ARBITRATION.
§ 4. The civil practice law and rules is amended by adding a new
section 7515 to read as follows:
§ 7515. ARBITRATION OF DISPUTES REGARDING CONTRACTS OR AGREEMENTS IN A
CONSUMER TRANSACTION. (A) 1. THIS SECTION SHALL GOVERN ARBITRATIONS OF
DISPUTES REGARDING CONTRACTS OR AGREEMENTS ENTERED INTO BY, OR DELIVERED
TO, A RESIDENT OF THIS STATE OR ENTERED INTO IN THIS STATE THAT INVOLVES
A CONSUMER TRANSACTION.
2. PROCEEDINGS PURSUANT TO THIS SECTION SHALL BE COMMENCED AND
CONDUCTED IN ACCORDANCE WITH THIS ARTICLE, EXCEPT AS OTHERWISE PROVIDED
BY THIS SECTION AND IN ACCORDANCE WITH RULES PROMULGATED AND APPROVED BY
THE SUPERINTENDENT OF THE DEPARTMENT OF FINANCIAL SERVICES.
3. THE TERM "CONSUMER TRANSACTION" SHALL BE DEFINED AS SET FORTH IN
SECTION FORTY-FIVE HUNDRED FORTY-FOUR OF THIS CHAPTER.
4. EXCEPT AS PROVIDED BY AN EXPRESS WAIVER CONTAINED IN SUCH CONTRACT
OR AGREEMENT, EITHER PARTY TO A CONSUMER DISPUTE MAY SEEK RELIEF IN
ARBITRATION BY WAY OF CLASS ACTION IN ACCORDANCE WITH THE REGULATIONS
PROMULGATED BY THE SUPERINTENDENT OF THE DEPARTMENT OF FINANCIAL
SERVICES PURSUANT TO ARTICLE NINE OF THIS CHAPTER.
(B) 1. THE RULES PROMULGATED BY THE SUPERINTENDENT OF THE DEPARTMENT
OF FINANCIAL SERVICES SHALL SET FORTH STANDARDS FOR PANELS OF ARBITRA-
TORS UNDER THIS SECTION AND ESTABLISH QUALIFICATIONS AND COMPENSATION OF
INDIVIDUALS SEEKING APPOINTMENT TO THE ARBITRATION PANELS. THESE STAND-
ARDS SHALL REQUIRE THAT AN ARBITRATOR BE IMPARTIAL AND THAT THE ARBITRA-
TOR BE COMPETENT TO ARBITRATE THE SUBJECT MATTER OF EACH ARBITRATION TO
WHICH HE OR SHE IS APPOINTED AS A PANEL MEMBER.
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2. ALL COSTS OF ARBITRATION SHALL BE PAID BY THE PARTY PROVIDING THE
MONEY, PROPERTY OR SERVICE.
3. A CONSUMER THAT PREVAILS IN WHOLE OR IN PART IN ARBITRATION UNDER
THIS SECTION SHALL BE AWARDED REASONABLE ATTORNEY'S FEES BY THE ARBITRA-
TOR.
4. A CONTRACT ENTERED INTO, OR DELIVERED TO, A RESIDENT OF THIS STATE
THAT PROVIDES FOR ARBITRATION OF A DISPUTE SHALL BE VOID IF IT PROVIDES
FOR ARBITRATION BY ANY ARBITRATOR CONTRARY TO THE PROVISIONS OF THIS
SECTION.
(C) DECISIONS BY MEMBERS OF THE ARBITRATION PANEL SHALL: 1. BE
PROVIDED TO ALL PARTIES;
2. CONTAIN WRITTEN FINDINGS OF FACT AND CONCLUSIONS OF LAW AND AN
EXPLANATION OF THE CALCULATION OF ANY DAMAGES; AND
3. BE BASED ON THE APPLICABLE SUBSTANTIVE LAW OF THIS STATE OR THE LAW
OF ANY OTHER JURISDICTION THAT THE ARBITRATOR DETERMINES, BASED UPON THE
CHOICE OF LAW PRINCIPLES OF THIS STATE.
§ 5. The general obligations law is amended by adding a new section
5-336 to read as follows:
§ 5-336. PROHIBITION OF CONTRACTUAL PROVISIONS REQUIRING ARBITRATION
OF CLAIMS FOR PERSONAL INJURIES OR WRONGFUL DEATH WHERE THE PARTY
ASSERTING THE CONTRACTUAL RIGHT TO ARBITRATE HAS LIABILITY INSURANCE
APPLICABLE TO THE CLAIM. EXCEPT WHERE OTHERWISE PROVIDED BY STATE STAT-
UTE, ANY CONTRACTUAL PROVISION REQUIRING ARBITRATION OF CLAIMS FOR
PERSONAL INJURIES OR WRONGFUL DEATH SHALL BE DEEMED WITHOUT EFFECT WHERE
THE PARTY ASSERTING THE CONTRACTUAL RIGHT TO ARBITRATE HAS LIABILITY
INSURANCE APPLICABLE TO THE CLAIM.
§ 6. Subdivision a of section 5-702 of the general obligations law is
amended by adding a new paragraph 3 to read as follows:
3. WRITTEN IN CLEAR AND LEGIBLE PRINT NO LESS THAN EIGHT POINTS IN
DEPTH OR FIVE AND ONE-HALF POINTS IN DEPTH FOR UPPER CASE TYPE. THE
PORTION OF ANY PRINTED CONTRACT OR AGREEMENT INVOLVING A CONSUMER TRANS-
ACTION OR A LEASE FOR SPACE TO BE OCCUPIED FOR RESIDENTIAL PURPOSES
WHERE THE PRINT DOES NOT COMPLY WITH THIS PARAGRAPH MAY NOT BE RECEIVED
IN EVIDENCE IN ANY TRIAL, HEARING OR PROCEEDING ON BEHALF OF THE PARTY
WHO PRINTED OR PREPARED SUCH CONTRACT OR AGREEMENT, OR WHO CAUSED SAID
AGREEMENT OR CONTRACT TO BE PRINTED OR PREPARED. NO PROVISION OF ANY
CONTRACT OR AGREEMENT WAIVING THE PROVISIONS OF THIS SECTION SHALL BE
EFFECTIVE. THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY TO AGREE-
MENTS OR CONTRACTS ENTERED INTO OR AGREEMENTS EFFECTIVE PRIOR TO THE
EFFECTIVE DATE OF THIS PARAGRAPH.
§ 7. Paragraphs 14 and 15 of subdivision 3 of section 94-a of the
executive law, as added by section 21 of part A of chapter 62 of the
laws of 2011, are amended to read as follows:
(14) cooperate with and assist consumers in class actions in proper
cases; [and]
(15) (I) DETERMINE, UPON AN APPLICATION BY A CONSUMER, WHETHER A
CONTRACT OR AGREEMENT OR ANY PROVISION THEREIN BETWEEN THE CONSUMER AND
ANY PERSON, FIRM, CORPORATION OR ASSOCIATION OR AGENT OR EMPLOYEE THERE-
OF VIOLATES THE PUBLIC POLICY OF THE STATE OF NEW YORK UNDER THE LAWS OF
THIS STATE, INCLUDING BUT NOT LIMITED TO THE PROVISIONS OF THIS SECTION,
ARTICLE TWENTY-TWO-A OF THE GENERAL BUSINESS LAW OR SECTION TWENTY-EIGHT
HUNDRED ONE-H OF THE PUBLIC HEALTH LAW, PROHIBITING UNSCRUPULOUS OR
QUESTIONABLE BUSINESS PRACTICES OR UNCONSCIONABLE CONTRACTS, OR REQUIR-
ING THE CONSUMER TO ENTER INTO AN UNCONSCIONABLE CONTRACT TO OBTAIN THE
BENEFITS OF SUCH CONTRACT OR AGREEMENT, AND (II) REFER SUCH DETERMI-
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NATION TO THE APPROPRIATE UNIT OF THE DEPARTMENT, OR FEDERAL, STATE OR
LOCAL AGENCY AUTHORIZED BY LAW FOR APPROPRIATE ACTION; AND
(16) create an internet website or webpage pursuant to section three
hundred ninety-c of the general business law.
§ 8. Section 94-a of the executive law is amended by adding a new
subdivision 6 to read as follows:
6. RIGHT OF ACTION. IF WITHIN SIXTY DAYS AFTER AN APPLICATION IS MADE
BY A CONSUMER UNDER PARAGRAPH FIFTEEN OF SUBDIVISION THREE OF THIS
SECTION AN ACTION IS NOT COMMENCED BY ANY FEDERAL, STATE OR LOCAL AGEN-
CY, THE CONSUMER MAY BRING AN ACTION IN HIS OR HER OWN NAME ON BEHALF OF
THE STATE TO OBTAIN SUCH A DETERMINATION AND SEEK TO ENJOIN ENFORCEMENT
OF THE CONTRACT OR AGREEMENT OR ANY OF ITS PROVISIONS DETERMINED TO BE
VOID UNDER SUCH SUBDIVISION, RECOVER HIS OR HER ACTUAL DAMAGES OR BOTH.
IN SUCH ACTION, PRELIMINARY RELIEF MAY BE GRANTED UNDER ARTICLE SIXTY-
THREE OF THE CIVIL PRACTICE LAW AND RULES. THE COURT MAY, IN ITS
DISCRETION, INCREASE THE AWARD OF DAMAGES TO AN AMOUNT NOT TO EXCEED
THREE TIMES THE ACTUAL DAMAGES UP TO ONE THOUSAND DOLLARS IN EACH
INSTANCE, IF THE COURT FINDS THE DEFENDANT WILLFULLY OR KNOWINGLY
ENGAGED IN AN UNSCRUPULOUS OR QUESTIONABLE BUSINESS PRACTICE OR REQUIRED
THE CONSUMER TO ENTER SUCH CONTRACT OR AGREEMENT TO OBTAIN ITS BENEFITS.
ANY AMOUNT OF DAMAGES AWARDED TO PLAINTIFF IN EXCESS OF ACTUAL DAMAGES
SHALL BE PAYABLE TO THE STATE. THE COURT MAY AWARD REASONABLE ATTORNEY'S
FEES TO A PREVAILING PLAINTIFF.
§ 9. The public health law is amended by adding a new section 2801-h
to read as follows:
§ 2801-H. PROHIBITION OF CONTRACTUAL PROVISIONS IN HEALTH CARE PROVID-
ER CONTRACTS AFFECTING THE RIGHTS, REMEDIES OR OBLIGATIONS BETWEEN
HEALTH CARE PROVIDERS AND PATIENTS RELATIVE TO PERSONAL INJURIES TO, OR
WRONGFUL DEATH OF, PATIENTS. 1. ANY WRITTEN CONTRACT THAT A HEALTH CARE
PROVIDER REQUIRES A PERSON TO SIGN AS A CONDITION TO PROVIDING HEALTH
CARE SERVICES WHICH ATTEMPTS TO AFFECT ANY LEGAL RIGHTS, REMEDIES OR
OBLIGATIONS RELATIVE TO PERSONAL INJURIES TO, OR WRONGFUL DEATH OF,
PATIENTS WHICH MAY BE OCCASIONED IN CONNECTION WITH THE HEALTH CARE
SERVICES RENDERED SHALL BE DEEMED UNCONSCIONABLE AND ENTERED INTO BY THE
PERSON UNDER DURESS, AND IS PROHIBITED AS AGAINST THE PUBLIC POLICY OF
THE STATE.
2. FOR THE PURPOSE OF THIS SECTION, THE TERM "HEALTH CARE PROVIDER"
SHALL INCLUDE, BUT IS NOT LIMITED TO: (A) HOSPITALS, NURSING HOMES, AND
RESIDENTIAL HEALTH CARE FACILITIES AS DEFINED IN SECTION TWENTY-EIGHT
HUNDRED ONE OF THIS ARTICLE; (B) HOME CARE SERVICE AGENCIES AS DEFINED
IN SECTION THIRTY-SIX HUNDRED TWO OF THIS CHAPTER; AND (C) PHYSICIANS,
NURSES, DENTISTS, PODIATRISTS, CHIROPRACTORS, ORTHODONTISTS, NURSE
MIDWIVES, NURSE PRACTITIONERS, PHYSICIAN ASSISTANTS, ACUPUNCTURISTS,
PHYSICAL THERAPISTS, OCCUPATIONAL THERAPISTS, SPEECH THERAPISTS, HOME
HEALTH AIDES, NUTRITIONISTS, MEDICAL TECHNICIANS AND DENTAL HYGIENISTS,
AS WELL AS ANY GROUPS, CORPORATIONS, PARTNERSHIPS OR JOINT VENTURES THAT
PROVIDES SUCH SERVICES.
3. NOTHING HEREIN SHALL BE DEEMED TO PROHIBIT OR OTHERWISE INVALIDATE
AN OTHERWISE LEGALLY VALID CONSENT FORM BEING EXECUTED BY OR ON BEHALF
OF A PERSON UNDERGOING A MEDICAL, DENTAL, PODIATRIC OR CHIROPRACTIC
TREATMENT OR PROCEDURE WHERE SUCH CONSENT IS REQUIRED, PROVIDED THAT THE
DOCUMENT DOES NOT ATTEMPT TO DEFINE ANY RIGHTS, REMEDIES OR OBLIGATIONS
RELATIVE TO PERSONAL INJURIES TO, OR WRONGFUL DEATH OF, PATIENTS ARISING
OR RESULTING FROM, OR CONTRIBUTED TO BY, THE HEALTH CARE SERVICES
RENDERED.
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§ 10. If any provision of this chapter or its application to any
person or circumstance is held invalid, the invalidity does not affect
any other provisions or application of the provisions of the remainder
to any other person or circumstance, and to this end the provisions of
this chapter are severable.
§ 11. This act shall take effect immediately and apply to contracts
entered into or agreements effective on or after the date on which it
shall have become a law; provided, however, that section four of this
act shall apply to all pending and future actions in which judgment has
not yet been entered.