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Assembly backs bill making neutral arbitrators the default in arbitration proceedings
Summary
Lawmakers passed legislation defining a 'neutral third-party arbitrator' and making neutrality the default; sponsors said it prevents biased outcomes while critics warned it could increase litigation and undermine established arbitration practices.
The Assembly approved a bill that defines a "neutral third party arbitrator" and makes neutral arbitrators the default in arbitration matters. Sponsors said the change promotes fairness by requiring disclosure of direct or material interests and substantial relationships with parties or counsel; the bill also imposes an ongoing disclosure obligation during the proceeding.
Questioners noted that federal and state arbitration law already allow vacation of awards for bias and asked why a statutory default was necessary. The sponsor responded that it's easier to ensure a fair result by requiring neutrality up front instead of overturning biased awards later. Members expressed concerns the change could make arbitration more litigious and that parties often select arbitrators by agreement; the sponsor said parties can still agree but must be aware of disclosure obligations.
The House recorded Ayes 116, Nos 32 and the bill passed.
