Legislation Attempts to Reform Arbitration Process

House bills would implement disclosure, ethics requirements for arbitrators

A pair of bills that passed the Colorado House of Representatives late last month would change laws surrounding arbitration processes. The bills will be heard by the Senate State, Veterans & Military Affairs committee — typically referred to as the kill committee — next week.

House Bill 1261, the Colorado Arbitration Fairness Act, establishes ethical and conflict standards for arbitration service providers. If passed, it would require those providers to disclose any financial or professional relationships or affiliation between them and another party or attorneys in the arbitration.

The legislation specifies that any financial interests or agreements between the providers and parties must also be disclosed. Before disclosures are required, parties would be required to submit a checklist of disputed material, parties’ identities and counsel as well as any agents, representatives, employees, independent contractors or insurers with relevant knowledge.

HB 1261 also gives the parties the opportunity to challenge the impartiality of an arbitrator before the process begins. Under current statute, a party has to wait until arbitration is complete before attempting to vacate an award, something bill sponsor Sen. Daniel Kagan feels is “totally untenable for the average consumer.”

To read this story and other complete articles featured in the April 9, 2017 print edition of Law Week Colorado, copies are available for purchase online.