Arbitration Transparency and Consumer Protection Act

(a) Short Title

This Act may be cited as the "Arbitration Transparency and Consumer Protection Act".

(b) Modular Design

This Act is designed so that each Article may be enacted independently. The [State] legislature may adopt the full Act or any individual Article based on political feasibility. Articles include severability clauses so that individual provisions survive challenges to others.

Articles 2 (public outcome registry) and 3 (opt-out and plain-language requirements) carry the lowest risk of Federal Arbitration Act preemption and are most likely to advance with bipartisan support. Articles 4 (neutral arbitrator roster) and 5 (fee shifting) are stronger reforms that address the structural imbalance in consumer arbitration. Article 6 (NDA limits) tracks the federal model bill and benefits from the same advocacy strategy.

(a) State Registry Established

The [State Attorney General / State Consumer Protection Agency] shall establish and maintain a publicly searchable database of consumer arbitration outcomes. The registry shall be accessible through the [Agency] public website and shall be updated at least quarterly.

(b) Reporting Requirements

Each arbitration provider that administers consumer arbitration proceedings involving [State] consumers shall report to the [Agency] within thirty (30) days after the close of each calendar quarter:

1. The total number of consumer arbitrations administered during the quarter, disaggregated by company.
2. The outcome of each concluded proceeding (award for consumer, award for company, settlement, withdrawal, or other).
3. The total fees paid by consumers and by companies in each proceeding.
4. Whether a non-disclosure agreement was executed as part of any settlement.
5. The identity of each arbitrator and the number and outcomes of proceedings in which each arbitrator presided.

(c) Annual Summary

The [Agency] shall publish an annual summary of registry data identifying trends, outcome patterns, and companies appearing in ten (10) or more proceedings during the calendar year. The summary shall be posted on the [Agency] website and submitted to the [State Legislature].

(d) Penalties

An arbitration provider that fails to file a report required under subsection (b) shall be subject to a civil penalty of not more than [dollar amount] per day for each day the report is late.

(a) Opt-Out Right

Every consumer arbitration clause in a contract offered to [State] consumers shall include a thirty (30) day opt-out period beginning on the date the consumer receives the contract. The opt-out mechanism shall include at least one electronic opt-out method. No cost, no penalty, and no explanation shall be required to exercise the opt-out right.

(b) Plain-Language Summary

Every consumer arbitration clause shall be accompanied by a plain-language summary, written at or below an eighth-grade reading level, that states clearly:

• "This contract includes a mandatory arbitration clause. You are giving up your right to go to court or join a class action. You have the right to opt out within 30 days."

(c) Enforcement

Any arbitration clause that does not comply with this Article is voidable by the consumer. A consumer may void such a clause at any time during the dispute resolution process by providing written notice to the company and to any arbitration provider.

(a) State Roster Established

The [Agency] shall establish and maintain a roster of qualified, independent arbitrators available for assignment in consumer arbitration proceedings. The roster shall include minimum qualifications, a disclosure requirement, and a code of conduct consistent with the standards set forth in this Article.

(b) Consumer Right to Roster Arbitrator

In any consumer arbitration proceeding, the consumer shall have the right to request that the arbitrator be selected from the state roster by random assignment, with one peremptory strike per side. No company may require a consumer to waive this right as a condition of the arbitration agreement or as a condition of proceeding to arbitration.

(c) Disqualification Standards

An arbitrator on the state roster shall be disqualified from any proceeding in which that arbitrator has received compensation exceeding [dollar amount] from a party or has served in [number] or more proceedings involving the same party within the preceding thirty-six (36) months.

(a) Consumer Prevails

When a consumer prevails in a consumer arbitration proceeding, the company shall pay all filing fees, arbitration provider fees, arbitrator fees, and the consumer's reasonable attorney's fees incurred in connection with the proceeding.

(b) Consumer Filing Fee Cap

The filing fee charged to a consumer in any consumer arbitration proceeding shall not exceed the filing fee for the equivalent claim in [State] small claims court. Fee waivers shall be available for consumers demonstrating financial hardship.

(c) Company Appeal Fee Shifting

If a company seeks to vacate or modify an arbitration award and does not prevail, the court shall award the consumer reasonable attorney's fees and costs incurred in defending against the company's motion.

(d) Non-Waiver

The fee-shifting protections of this Article may not be waived in a pre-dispute arbitration agreement. Any provision purporting to require a consumer to pay fees in excess of the limits established in this Article is void and unenforceable.

(a) Voidable NDAs

A non-disclosure agreement arising from a consumer arbitration proceeding is voidable by the consumer within three (3) years of execution if:

1. The NDA was not separately negotiated and was imposed as a standard condition of settlement without meaningful negotiation;
2. The consumer was not provided with a plain-language explanation of the NDA's terms and scope; or
3. The NDA prohibits any disclosure protected under this Article.

(b) Protected Disclosures

Notwithstanding any non-disclosure agreement arising from a consumer arbitration proceeding, a consumer always retains the right to:

1. File complaints with federal and state regulatory agencies and law enforcement.
2. Consult an attorney for purposes of obtaining legal advice.
3. Cooperate with law enforcement investigations.
4. Disclose information to a non-profit advocacy organization as described in subsection (c).

(c) Non-Profit Advocacy Carve-Out

A consumer may disclose information protected by a non-disclosure agreement to a non-profit advocacy organization for the purpose of obtaining assistance with modification or challenge of the NDA, contributing to public databases, supporting research, or participating in reform advocacy. A consumer who makes such a disclosure in good faith shall not be deemed to have breached the NDA.

(d) Enforcement

A consumer whose rights under this Article are violated may bring a civil action and shall be entitled to declaratory relief, injunctive relief, actual damages, statutory damages of [dollar amount] per violation, and reasonable attorney's fees and costs.

(a) Attorney General Enforcement

The [State Attorney General] may bring an action in [State] court to enforce the provisions of this Act and shall be entitled to civil penalties of not more than [dollar amount] per violation, restitution for affected consumers, and injunctive relief.

(b) Private Right of Action

Any consumer whose rights under this Act are violated may bring a civil action in [State] court and shall be entitled to:

1. Actual damages.
2. Statutory damages of five thousand dollars ($5,000) per violation.
3. Injunctive relief.
4. Reasonable attorney's fees and costs.

(c) Unfair and Deceptive Practices

A violation of this Act constitutes an unfair and deceptive act or practice under [State Consumer Protection Act citation]. All remedies available under that Act, including civil penalties and class action remedies, shall be available for violations of this Act.

(d) Severability

If any provision of this Act or any Article herein, or the application of any provision to any person or circumstance, is held to be unconstitutional or otherwise invalid, the remainder of the Act and the application of that provision to other persons or circumstances shall not be affected.

This Act shall take effect [number] days after the date of enactment. Bracketed terms throughout this Act indicate provisions that require state-specific customization by legislative counsel before introduction.