The New Jersey Assembly’s Consumer Affairs Committee recently advanced several bills that would increase consumer protections in arbitration disputes. If passed into law, these bills would change the landscape for consumer disputes in the State and require companies to revisit their standard consumer contracts and arbitration practices.
The bills would prohibit companies from inserting language in consumer contracts requiring arbitration outside of New Jersey; bar neutral arbitrators or arbitration companies from ordering a losing party to pay the legal fees of the prevailing party; and bar arbitrators that have a financial interest in either party from presiding over the parties’ arbitration. A separate bill would restrict the use of “payment assurance” devices on vehicles designed to disable the ignition if the owner falls behind on payments, which could significantly impact the car sales industry in New Jersey.
The bills have several steps in the legislative process before being enacted into law and are likely to be amended to address business concerns. However, companies doing business in New Jersey should be aware that lawmakers are scrutinizing consumer contracts and reconsider any such form contracts.
For more information regarding consumer contracts and the arbitration process, please contact Kathleen Barnett Einhorn, Esq., Director of the firm’s Complex Commercial Litigation Group at email@example.com, or Jennifer Borek, Esq., a Partner in the Complex Commercial Litigation Group at firstname.lastname@example.org.