Requires written consent for arbitration of controversies relating to contracts with persons in military service

BILL NUMBER:S4841

Title of bill

An act to amend the military law, in relation to requiring written consent for arbitration of controversies relating to contracts with persons in military service

Purpose

To require that any contract with a person in the military services which contains an arbitration clause must provide for prior written consent from all parties to submit to arbitration for the resolution of a dispute.

Summary of provisions

Section One creates a new section 320 of the military law to provide that the prior written consent of all parties to submit to arbitration to resolve a controversy is required in any contract which is subject to the New York State Soldiers' And Sailors' Civil Relief Act or the federal Servicemembers Civil Relief Act, with a person in military service, or with a person in military service and such person's spouse, jointly.

Section two sets the effective date.

Justification

The New York State Soldiers' And Sailors' Civil Relief Act and the federal Servicemembers Civil Relief Act provide certain protections for military personnel, in light of their special circumstances. For example, a lender may not summarily seize a leased or financed vehicle from a service member without a court order. Unfortunately these state and federal laws are routinely ignored with minimal consequence. Some lenders have implemented mechanisms designed to deter challenging their illegal actions by incorporating mandatory arbitration clauses in their contracts, which prevent a service member from seeking appropriate redress in the courts, as intended by state and federal laws. This bill would prevent the enforcement. of unilateral mandatory arbitration clauses and require actual consent from the service member to submit a dispute to arbitration.

Fiscal implications

None.

Effective date

This act would take effect immediately.