A measure seeking to establish consumer protections in arbitration, including curtailing the threat of fee shifting, cleared the Senate on Jan. 13 by a 28-12 vote and now heads to Gov. Phil Murphy's desk for signature.

S-1490, sponsored by Sen. James Beach, D-Gloucester/Camden, and Sen. Nicholas Scutari, D-Union, targets fee shifting and would prohibit any arbitrator from requiring a consumer to pay fees and costs incurred by an opposing party if the consumer does not prevail in arbitration.

"I think it's a fairness issue and it's important to protect consumers," Beach said inside the Senate chambers just before the bill's passage on Monday. "Somebody needs to level the playing field."

The bill also would require an arbitration organization: to waive the fees and costs of arbitration, exclusive of arbitrator fees, for an indigent consumer; and to provide written notice to any consumer of the right to obtain a fee waiver and to keep specified information concerning a consumer confidential.

The measure also would prevent arbitration organizations from administering cases in which the organization has a current or past financial interest.

Also under the measure, any arbitration organization that is involved in more than 50 consumer arbitration cases per year would be required to collect and publish information regarding each consumer arbitration within the last five years.

S-1490 states: "Under New Jersey's current law, there are rules governing arbitrators and arbitration generally, but there are no rules pertaining to the regulation of arbitration organizations."

The Assembly version, A-4972, sponsored by Paul Moriarty, D-Gloucester/Camden, got final approval from the full Assembly on March 25, by a 72-5 vote.

S-1490 first got approval from the Senate Commerce Committee on Nov. 14. It was amended on Dec. 16 to clarify that "any position-holder in a non-profit organization who is not compensated for holding that position shall not be considered to have a financial interest in the organization."

The Senate on Monday passed S-1490 with that amendment, and the Assembly then approved the amended measure on concurrence the same day by a vote of 71-3.

In discussing the need for such legislation, Beach has said that, unlike administrative or judicial proceedings, arbitration proceedings are not made public, making it difficult for the state to monitor cases to ensure they are being carried out fairly. He has also said that it is often the defendant company who chooses the arbitrator.