S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3461
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 27, 2025
                                ___________
 
 Introduced  by  M.  of  A.  LAVINE, DINOWITZ, HEVESI, KIM, STECK, SIMON,
   SIMONE -- read once and referred to the Committee on Judiciary
 
 AN ACT to amend the civil practice law and rules, in relation  to  arbi-
   tration
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivision (a) of section 7502 of the civil  practice  law
 and rules is amended by adding a new paragraph (v) to read as follows:
   (V) IF THERE ARE MULTIPLE PARTIES SEEKING ARBITRATION AGAINST THE SAME
 PARTY  OR PARTIES, THE PROCEEDING MAY BE BROUGHT IN ANY COURT AND COUNTY
 WHERE ANY OF THE PARTIES SEEKING ARBITRATION RESIDES OR IS  DOING  BUSI-
 NESS OR WHERE THE ARBITRATION WAS HELD OR IS PENDING.
   §  2.  Subdivision  (c)  of section 7503 of the civil practice law and
 rules, as amended by chapter 1028 of the laws of  1973,  is  amended  to
 read as follows:
   (c)  Notice  of intention to arbitrate. A party may serve upon another
 party a demand for arbitration or a notice of  intention  to  arbitrate,
 specifying the agreement pursuant to which arbitration is sought and the
 name  and  address  of the party serving the notice, or of an officer or
 agent thereof if such party is an association or corporation, and  stat-
 ing  that unless the party served applies to stay the arbitration within
 twenty days after such service  [he]  SUCH  PARTY  shall  thereafter  be
 precluded  from objecting that a valid agreement was not made or has not
 been complied with and from asserting in court the bar of  a  limitation
 of  time.  Such notice or demand shall be served in the same manner as a
 summons or by registered or certified mail, return receipt requested. An
 application to stay arbitration must be made by the party served  within
 twenty days after service upon [him] SUCH PARTY of the notice or demand,
 or  [he]  SUCH  PARTY shall be so precluded.  Notice of such application
 shall be served in the same manner as a  summons  or  by  registered  or
 certified  mail,  return receipt requested.   Service of the application
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05048-01-5
              

 A. 3461                             2
 
 may be made upon the adverse party, or upon [his] SUCH PARTY'S  attorney
 if  the  attorney's  name  appears  on the demand for arbitration or the
 notice of intention to arbitrate. Service of  the  application  by  mail
 shall  be  timely  if  such  application is posted within the prescribed
 period. Any provision in an arbitration agreement or  arbitration  rules
 which  waives the right to apply for a stay of arbitration OR PRESCRIBES
 A MANNER OF NOTIFYING A PARTY OF AN INTENTION  TO  COMMENCE  ARBITRATION
 THAT  IS  MORE  BURDENSOME THAN THAT DESCRIBED IN THIS SECTION is hereby
 declared null and void.
   § 3. Subdivision (d) of section 7506 of the  civil  practice  law  and
 rules is amended to read as follows:
   (d)  Representation  by  attorney. A party has the right to be repres-
 ented 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] SUCH PARTY'S attorney.
 ANY AGREEMENT WHICH DISCRIMINATES  AGAINST  OR  PENALIZES  A  PARTY  FOR
 RETAINING THE SERVICES OF COUNSEL IN AN ARBITRATION IS NULL AND VOID.
   §  4.  The civil practice law and rules is amended by adding three new
 sections 7513-a, 7513-b and 7517 to read as follows:
   § 7513-A. FEES AND EXPENSES OF ARBITRATION INITIATION. (A) (I)  IN  AN
 EMPLOYMENT  OR  CONSUMER  ARBITRATION,  EXCEPT  AN ARBITRATION AGREEMENT
 INCLUDED IN  THE  TERMS  OF  A  COLLECTIVE  BARGAINING  AGREEMENT,  THAT
 REQUIRES,  EITHER  EXPRESSLY  OR THROUGH APPLICATION OF STATE OR FEDERAL
 LAW OR THE RULES OF THE ARBITRATION PROVIDER, THAT  THE  DRAFTING  PARTY
 SHALL  PAY CERTAIN FEES AND COSTS BEFORE THE ARBITRATION CAN PROCEED, IF
 THE FEES OR COSTS TO INITIATE AN ARBITRATION  PROCEEDING  ARE  NOT  PAID
 WITHIN THIRTY DAYS AFTER THE DUE DATE, THE DRAFTING PARTY IS IN MATERIAL
 BREACH  OF  THE ARBITRATION AGREEMENT, IS IN DEFAULT OF THE ARBITRATION,
 AND WAIVES ITS RIGHT TO COMPEL ARBITRATION.
   (II) AFTER AN EMPLOYEE  OR  CONSUMER  MEETS  THE  FILING  REQUIREMENTS
 NECESSARY  TO  INITIATE  AN  ARBITRATION, THE ARBITRATION PROVIDER SHALL
 IMMEDIATELY PROVIDE AN INVOICE FOR ANY FEES AND  COSTS  REQUIRED  BEFORE
 THE  ARBITRATION  CAN  PROCEED TO ALL OF THE PARTIES TO THE ARBITRATION.
 THE INVOICE SHALL BE PROVIDED IN ITS  ENTIRETY,  SHALL  STATE  THE  FULL
 AMOUNT  OWED  AND THE DATE THAT PAYMENT IS DUE, AND SHALL BE SENT TO ALL
 PARTIES BY THE SAME MEANS ON THE SAME DAY. TO  AVOID  DELAY,  ABSENT  AN
 EXPRESS  PROVISION  IN  THE  ARBITRATION AGREEMENT STATING THE NUMBER OF
 DAYS IN WHICH THE PARTIES TO THE ARBITRATION MUST PAY ANY REQUIRED  FEES
 OR  COSTS,  THE  ARBITRATION  PROVIDER  SHALL  ISSUE ALL INVOICES TO THE
 PARTIES AS DUE UPON RECEIPT.
   (B) IF THE DRAFTING PARTY MATERIALLY BREACHES THE  ARBITRATION  AGREE-
 MENT  AND  IS  IN  DEFAULT  UNDER  SUBDIVISION  (A) OF THIS SECTION, THE
 EMPLOYEE OR CONSUMER MAY DO EITHER OF THE FOLLOWING:
   (I) WITHDRAW THE CLAIM FROM ARBITRATION AND  PROCEED  IN  A  COURT  OF
 APPROPRIATE JURISDICTION; OR
   (II)  COMPEL ARBITRATION IN WHICH THE DRAFTING PARTY SHALL PAY REASON-
 ABLE ATTORNEYS' FEES AND COSTS RELATED TO THE ARBITRATION.
   (C) IF THE EMPLOYEE OR CONSUMER WITHDRAWS THE CLAIM  FROM  ARBITRATION
 AND  PROCEEDS  WITH AN ACTION IN A COURT OF COMPETENT JURISDICTION UNDER
 PARAGRAPH (I) OF SUBDIVISION (B) OF THIS SECTION, THE STATUTE OF LIMITA-
 TIONS WITH REGARD TO ALL CLAIMS BROUGHT OR THAT RELATE BACK TO ANY CLAIM
 BROUGHT IN ARBITRATION SHALL BE TOLLED AS  OF  THE  DATE  OF  THE  FIRST
 FILING OF A CLAIM IN A COURT, ARBITRATION FORUM, OR OTHER DISPUTE RESOL-
 UTION FORUM.
 A. 3461                             3
 
   (D)  IF THE EMPLOYEE OR CONSUMER PROCEEDS WITH AN ACTION IN A COURT OF
 COMPETENT JURISDICTION, THE COURT SHALL IMPOSE SANCTIONS ON THE DRAFTING
 PARTY IN ACCORDANCE WITH THIS CHAPTER.
   §  7513-B. FEES AND EXPENSES OF ARBITRATION CONTINUANCE. (A) (I) IN AN
 EMPLOYMENT OR CONSUMER  ARBITRATION,  EXCEPT  AN  ARBITRATION  AGREEMENT
 INCLUDED  IN  THE  TERMS  OF  A  COLLECTIVE  BARGAINING  AGREEMENT, THAT
 REQUIRES, EITHER EXPRESSLY OR THROUGH APPLICATION OF  STATE  OR  FEDERAL
 LAW  OR  THE  RULES OF THE ARBITRATION PROVIDER, THAT THE DRAFTING PARTY
 SHALL PAY CERTAIN FEES AND COSTS DURING THE PENDENCY OF  AN  ARBITRATION
 PROCEEDING,  IF  THE  FEES OR COSTS REQUIRED TO CONTINUE THE ARBITRATION
 PROCEEDING ARE NOT PAID WITHIN THIRTY  DAYS  AFTER  THE  DUE  DATE,  THE
 DRAFTING PARTY IS IN MATERIAL BREACH OF THE ARBITRATION AGREEMENT, IS IN
 DEFAULT  OF THE ARBITRATION, AND WAIVES ITS RIGHT TO COMPEL THE EMPLOYEE
 OR CONSUMER TO PROCEED WITH THAT ARBITRATION AS A RESULT OF THE MATERIAL
 BREACH.
   (II) THE ARBITRATION PROVIDER SHALL PROVIDE AN INVOICE  FOR  ANY  FEES
 AND  COSTS REQUIRED FOR THE ARBITRATION PROCEEDING TO CONTINUE TO ALL OF
 THE PARTIES TO THE ARBITRATION. THE INVOICE SHALL  BE  PROVIDED  IN  ITS
 ENTIRETY,  SHALL STATE THE FULL AMOUNT OWED AND THE DATE THAT PAYMENT IS
 DUE, AND SHALL BE SENT TO ALL PARTIES BY THE SAME MEANS ON THE SAME DAY.
 TO AVOID DELAY, ABSENT AN EXPRESS PROVISION IN THE ARBITRATION AGREEMENT
 STATING THE NUMBER OF DAYS IN WHICH THE PARTIES TO THE ARBITRATION  MUST
 PAY ANY REQUIRED FEES OR COSTS, THE ARBITRATION PROVIDER SHALL ISSUE ALL
 INVOICES  TO  THE PARTIES AS DUE UPON RECEIPT. ANY EXTENSION OF TIME FOR
 THE DUE DATE SHALL BE AGREED UPON BY ALL PARTIES.
   (B) IF THE DRAFTING PARTY MATERIALLY BREACHES THE  ARBITRATION  AGREE-
 MENT  AND  IS  IN  DEFAULT  UNDER  SUBDIVISION  (A) OF THIS SECTION, THE
 EMPLOYEE OR CONSUMER MAY UNILATERALLY ELECT TO DO ANY OF THE FOLLOWING:
   (I) WITHDRAW THE CLAIM FROM ARBITRATION AND  PROCEED  IN  A  COURT  OF
 APPROPRIATE  JURISDICTION.  IF  THE  EMPLOYEE  OR CONSUMER WITHDRAWS THE
 CLAIM FROM ARBITRATION AND PROCEEDS WITH AN ACTION IN A COURT OF  APPRO-
 PRIATE  JURISDICTION,  THE  STATUTE  OF  LIMITATIONS  WITH REGARD TO ALL
 CLAIMS BROUGHT OR THAT RELATE BACK TO ANY CLAIM BROUGHT  IN  ARBITRATION
 SHALL  BE  TOLLED  AS  OF THE DATE OF THE FIRST FILING OF A CLAIM IN ANY
 COURT, ARBITRATION FORUM, OR OTHER DISPUTE RESOLUTION FORUM;
   (II) CONTINUE THE ARBITRATION PROCEEDING, IF THE ARBITRATION  PROVIDER
 AGREES  TO  CONTINUE  ADMINISTERING  THE PROCEEDING, NOTWITHSTANDING THE
 DRAFTING PARTY'S FAILURE TO PAY FEES OR COSTS. THE NEUTRAL ARBITRATOR OR
 ARBITRATION PROVIDER MAY INSTITUTE A COLLECTION ACTION AT THE CONCLUSION
 OF THE ARBITRATION PROCEEDING AGAINST THE  DRAFTING  PARTY  THAT  IS  IN
 DEFAULT  OF  THE ARBITRATION FOR PAYMENT OF ALL FEES ASSOCIATED WITH THE
 EMPLOYMENT OR CONSUMER ARBITRATION PROCEEDING,  INCLUDING  THE  COST  OF
 ADMINISTERING ANY PROCEEDINGS AFTER THE DEFAULT;
   (III) PETITION THE COURT FOR AN ORDER COMPELLING THE DRAFTING PARTY TO
 PAY  ALL  ARBITRATION  FEES  THAT THE DRAFTING PARTY IS OBLIGATED TO PAY
 UNDER THE ARBITRATION AGREEMENT OR THE RULES OF THE ARBITRATION  PROVID-
 ER; OR
   (IV)  PAY  THE  DRAFTING PARTY'S FEES AND PROCEED WITH THE ARBITRATION
 PROCEEDING. AS PART OF THE AWARD, THE EMPLOYEE OR CONSUMER SHALL RECOVER
 ALL ARBITRATION FEES PAID ON BEHALF OF THE DRAFTING PARTY WITHOUT REGARD
 TO ANY FINDINGS ON THE MERITS IN THE UNDERLYING ARBITRATION.
   (C) IF THE EMPLOYEE OR CONSUMER WITHDRAWS THE CLAIM  FROM  ARBITRATION
 AND  PROCEEDS IN A COURT OF COMPETENT JURISDICTION PURSUANT TO PARAGRAPH
 (I) OF SUBDIVISION (B) OF THIS SECTION,  BOTH  OF  THE  FOLLOWING  SHALL
 APPLY:
 A. 3461                             4

   (I) THE EMPLOYEE OR CONSUMER MAY BRING A MOTION, OR A SEPARATE ACTION,
 TO  RECOVER  ALL ATTORNEYS' FEES AND ALL COSTS ASSOCIATED WITH THE ABAN-
 DONED ARBITRATION PROCEEDING. THE RECOVERY OF ARBITRATION  FEES,  INTER-
 EST, AND RELATED ATTORNEYS' FEES SHALL BE WITHOUT REGARD TO ANY FINDINGS
 ON THE MERITS IN THE UNDERLYING ACTION OR ARBITRATION; AND
   (II) THE COURT SHALL IMPOSE SANCTIONS ON THE DRAFTING PARTY IN ACCORD-
 ANCE WITH THIS CHAPTER.
   (D)  IF  THE EMPLOYEE OR CONSUMER CONTINUES IN ARBITRATION PURSUANT TO
 PARAGRAPH (II), (III) OR (IV) OF SUBDIVISION (B) OF  THIS  SECTION,  THE
 ARBITRATOR  SHALL  IMPOSE  APPROPRIATE  SANCTIONS ON THE DRAFTING PARTY,
 INCLUDING MONETARY SANCTIONS, ISSUE SANCTIONS,  EVIDENCE  SANCTIONS,  OR
 TERMINATING SANCTIONS.
   §  7517.  BREACH  OF  ARBITRATION  AGREEMENT; SANCTIONS. (A) THE COURT
 SHALL IMPOSE A MONETARY SANCTION AGAINST A  DRAFTING  PARTY  THAT  MATE-
 RIALLY  BREACHES  AN ARBITRATION AGREEMENT, EXCEPT AN ARBITRATION AGREE-
 MENT INCLUDED IN THE TERMS OF  A  COLLECTIVE  BARGAINING  AGREEMENT,  BY
 ORDERING  THE  DRAFTING  PARTY TO PAY THE REASONABLE EXPENSES, INCLUDING
 ATTORNEYS' FEES AND COSTS, INCURRED BY THE EMPLOYEE  OR  CONSUMER  AS  A
 RESULT OF THE MATERIAL BREACH.
   (B)  IN ADDITION TO THE MONETARY SANCTION DESCRIBED IN SUBDIVISION (A)
 OF THIS SECTION, THE COURT MAY ORDER  ANY  OF  THE  FOLLOWING  SANCTIONS
 AGAINST  A DRAFTING PARTY THAT MATERIALLY BREACHES AN ARBITRATION AGREE-
 MENT, UNLESS THE COURT FINDS THAT THE  PARTY  SUBJECT  TO  THE  SANCTION
 ACTED  WITH  SUBSTANTIAL  JUSTIFICATION OR THAT OTHER CIRCUMSTANCES MAKE
 THE IMPOSITION OF THE SANCTION UNJUST:
   (I) AN EVIDENCE SANCTION BY AN ORDER PROHIBITING  THE  DRAFTING  PARTY
 FROM CONDUCTING DISCOVERY IN THE CIVIL ACTION;
   (II) A TERMINATING SANCTION BY ONE OF THE FOLLOWING ORDERS:
   (1)  AN  ORDER STRIKING OUT THE PLEADINGS OR PARTS OF THE PLEADINGS OF
 THE DRAFTING PARTY; OR
   (2) AN ORDER RENDERING A JUDGMENT  BY  DEFAULT  AGAINST  THE  DRAFTING
 PARTY; OR
   (III)  A  CONTEMPT SANCTION BY AN ORDER TREATING THE DRAFTING PARTY AS
 IN CONTEMPT OF COURT.
   § 5. This act shall take effect immediately.