Assembly requires neutral arbitrators by default and disclosure of conflicts in arbitration agreements
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Summary
The Assembly passed a bill that defines arbitration and establishes a default requirement for neutral arbitrators with disclosure of financial and personal ties; supporters said it protects consumers from biased panels while critics warned it could upend panel arbitration practices.
On March 24 the Assembly approved changes to the Civil Practice Law and Rules intended to protect parties in arbitration by establishing a definition of arbitration and creating a default that arbitrators be neutral, accompanied by disclosure obligations for financial or personal ties.
Assemblymember Dinowitz, the sponsor, said the measure prevents contracts from mandating biased arbitrators and gives parties knowledge of potential conflicts before they are bound. The bill lists examples of bias—financial interest in the outcome or prior personal relationships—and requires disclosure so parties can object before proceedings begin.
Opponents raised concerns about customary panel arbitration practices in which each side selects an arbitrator and the two appointees then agree on a neutral third. Speaker 30 warned that requiring all arbitrators to be neutral could prevent parties from using their chosen advocates on panels and urged caution so that labor and other well‑established arbitration frameworks are not unintentionally disrupted.
The Assembly recorded the vote as Ayes 97, Nays 44. Sponsors said disclosure and an opportunity to object are central, and that failure to disclose could support later challenge of an award.
