BILL ANALYSIS �
AB 802
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CONCURRENCE IN SENATE AMENDMENTS
AB 802 (Wieckowski)
As Amended June 16, 2014
Majority vote
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|ASSEMBLY: |54-23|(January 29, |SENATE: |21-12|(August 18, |
| | |2014) | | |2014) |
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Original Committee Reference: JUD.
SUMMARY : Clarifies existing consumer arbitration data
disclosures by private arbitration companies. Specifically,
this bill :
1)Requires that private arbitration companies provide the
currently-required disclosures in a sortable database format,
rather than simply a "searchable" format.
2)Specifies further information to be provided in order to
permit more accurate and comprehensive analysis.
3)Provides that it is the intent of the Legislature that private
arbitration companies comply with the legal obligations of
this act.
The Senate amendments narrow and clarify defined terms and
specify the required format for the presentation of information.
FISCAL EFFECT : None
COMMENTS : Code of Civil Procedure (CCP) Section 1281.96
requires private arbitration companies to periodically publish
on their Internet Web sites a handful of data points regarding
their consumer arbitration proceedings. With the goal of
improving the availability of hard data and the promotion of
reasoned debate - and by transparency to deter any potential
abuses - CCP Section 1281.96 was designed to provide sunshine on
the process and outcomes in these cases to better allow
researchers and policymakers to evaluate the competing
contentions; to deter potential abuses; determine what if any
oversight might be needed to ensure that consumer arbitrations
are fair and accord with established notions of due process; to
AB 802
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reduce any potential incentives to favor business parties; and,
to help address mounting public skepticism about the integrity
of the arbitration process. (See Assembly Judiciary Committee
report on AB 2656 (Corbett) of 2002.)
Ten years after enactment of that law, witnesses before the
Assembly Judiciary Committee testified that when consumer
arbitration data has been properly reported pursuant to the law,
the statute has facilitated a robust debate about outcomes in
these arbitration proceedings. Nevertheless, research reveals
only two studies in the past 10 years that rely on the reported
data. As experts have noted, the paucity of research appears to
reflect that the data is not sufficiently complete or reliable
to offer researchers a useful source of information from which
to analyze the consumer arbitration process. Unfortunately, the
significant omission of required data may continue to foster
skepticism of mandatory consumer arbitration.
The statute seeks basic information about the time, cost and
outcome of consumer arbitrations in a "computer-searchable"
format. Unfortunately, many private arbitration companies -
with the notable exception of the American Arbitration
Association (AAA) have interpreted "computer searchable" to mean
a simple text file, which many commenters have noted is
virtually useless for research purposes. Amending the statute
to clarify that a sortable spreadsheet format, such as that used
by the AAA, would provide significantly greater transparency and
utility according to witnesses who testified at the hearing,
including both supporters and critics of mandatory arbitration.
Because at least one private arbitration company now publishes
its disclosures in a sortable spreadsheet format, this
clarifying amendment would appear to be highly practicable.
In order to address the longstanding problem of non-compliance,
the bill also makes clear the intent of the Legislature that
private arbitration companies shall be required to abide by all
legal obligations of the act despite the absence of an express
private right of action. Finally, the bill clarifies existing
obligations and provides for some additional data points
suggested by scholars and experts to permit better analysis and
comparison, consistently with the testimony at the Assembly
Judiciary Committee's oversight hearing.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
AB 802
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FN: 0004947