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78R8986 T
By: Christian H.B. No. 2920
A BILL TO BE ENTITLED
AN ACT
relating to revision of Texas arbitration laws.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.001, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.001. ARBITRATION AGREEMENTS VALID. (a) It is the
policy of this state to encourage the fair, neutral and
cost-effective resolution of disputes by arbitration.
(ab) A written agreement to arbitrate is valid and
enforceable if the agreement is to arbitrate a controversy that:
(1) exists at the time of the agreement; or
(2) arises between the parties or persons claiming
through a party after the date of the agreement.
(bc) A party or person claiming through a party may revoke
the agreement only on a ground that exists at law or in equity for
the revocation of a contract.
(d) For purposes of this section, "written agreement" shall
include
(1) a document signed by the parties; or
(2) a set of the terms and conditions under which a
person receives goods or services if before the events giving rise
to the controversy the service provider gave the person notice of
the terms and conditions.
(e) For purposes of Subsection (d), a service provider gives
notice to a person by taking action that is reasonably necessary to
inform the person in ordinary course, which includes the mailing of
terms and conditions of service to persons, whether or not a
particular person acquires actual knowledge of the terms and
conditions of service.
SECTION 2. Section 171.002, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.002. SCOPE OF CHAPTER. (a) This chapter does not
apply to:
(1) a collective bargaining agreement between an
employer and a labor union;
(2) [an agreement for the acquisition by one or more
individuals of property, services, money or credit in which the
total consideration to be furnished by the individual is not more
than $50,000, except as provided by Subsection (b);]
(23) a claim for personal injury, except as provided
by Subsection (bc);
(34) a claim for workers' compensation benefits; or
(45) an agreement made before January 1, 1966.
[(b) An agreement described by Subsection (a)(2) is subject
to this chapter if:]
[(1) the parties to the agreement agree in writing to
arbitrate; and]
[(2) the agreement is signed by each party and each
party's attorney.]
(cb) A claim described by Subsection (a)(32) is subject to
this chapter if:
(1) each party to the claim, on the advice of counsel,
agrees in writing to arbitrate; and
(2) the agreement is signed by each party and each
party's attorney.
SECTION 3. Section 171.004, Civil Practice and Remedies
Code, is added to read as follows:
Sec. 171.004. LIMIT ON CONSUMER ARBITRATION FEES. (a) For
purposes of this section, "consumer" shall mean an individual, or a
partnership or corporation having revenues of less than $500,000 in
the previous calendar year, who seeks or acquires by purchase any
goods or services.
(b) A clause in an arbitration agreement shall be
unenforceable to the extent it requires a consumer who does not
prevail in the arbitration to pay the fees and costs incurred by an
opposing party. If a consumer prevails in an arbitration, the
arbitrator may require the opposing party to reimburse the
consumer for the arbitration fee charged to the consumer pursuant
to Subsection (c).
(c) For a consumer arbitration in which the amount in
controversy is $10,000 or less, the administrative fees charged to
a consumer shall be $125 or the amount in controversy, whichever is
less. For a consumer arbitration in which the amount in controversy
is more than $10,000 but less than $75,000, the administrative fees
charged to the consumer shall be $375. For a consumer arbitration
in which the amount in controversy is $75,000 or more, the
administrative fees charged to a consumer shall be as set by the
arbitrator. The administrative fees specified in this Subsection
shall be adjusted annually in accordance with the percentage
increase or decrease for the previous year in the Consumer Price
Index for Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of Labor.
(d) All fees and costs charged to or assessed upon a
consumer by an arbitrator in a consumer arbitration shall be waived
for an indigent consumer.
(1) For the purposes of this Subsection (d), "indigent
consumer" means an individual having a gross monthly income that is
less than 200 percent of the federal poverty guidelines.
(2) Any consumer requesting a waiver of fees or costs
under this Subsection (d) may establish his or her eligibility by
making a declaration under oath on a form provided to the consumer
by the arbitrator for signature stating his or her monthly income
and the number of persons living in his or her household. An
arbitrator may require a consumer to provide further statement or
evidence of indigence, including but not limited to federal income
tax returns or federal W-2 forms for prior years.
(3) Any information obtained by an arbitrator about a
consumer's identity, financial condition, income, wealth, or fee
waiver request shall be kept confidential and may not be disclosed
to any adverse party or any nonparty to the arbitration, except an
arbitrator may not keep confidential the number of waiver requests
received or granted, or the total amount of fees waived.
(e) This section applies to all arbitration proceedings
conducted in Texas in which a consumer is a party.
SECTION 4. Section 171.021(a), Civil Practice and Remedies
Code, is amended to read as follows:
(a) A court shall order the parties to arbitrate all
disputes and issues they have agreed to arbitrate on application of
a party showing:
(1) an agreement to arbitrate; and
(2) the opposing party's refusal to arbitrate.
SECTION 5. Section 171.022, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.022. UNCONSCIONABLE AGREEMENTS UNENFORCEABLE. A
court may not enforce an agreement to arbitrate if the court finds
the agreement was unconscionable under general principles of law at
the time the agreement was made.
SECTION 6. Section 171.026, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 171.026. VALIDITY OF UNDERLYING CLAIM. A court may not
refuse to order arbitration of any issue agreed by the parties
because:
(1) the claim lacks merit or bona fides; or
(2) the fault or ground for the claim is not shown.
SECTION 7. Section 171.027, Civil Practice and Remedies
Code, is added to read as follows:
Sec. 171.027. PROVISIONS DISFAVORING ARBITRATION
UNENFORCEABLE. (a) All issues relating to the making, effect,
interpretation and enforcement of agreements to arbitrate shall be
exclusively determined according to the provisions of this chapter.
(b) No law, regulation, rule, or ordinance shall impair,
restrict, modify, limit or prohibit any agreement to arbitrate any
dispute involving a claim for monetary damages. No particular
language, font size, color, location, placement or position in an
agreement to arbitrate shall be required for enforcement of the
agreement. No subdivision or agency of Texas shall require the
filing or approval of arbitration language, provisions or clauses.
(c) Subsection (b) of this section shall not prohibit an
administrative agency from enforcing laws and regulations,
including laws and regulations requiring the approval of tariffs
and charges where required by law or providing for administrative,
civil or criminal penalties; provided, however, that
administrative rules or regulations shall not impair, restrict,
modify, limit or prohibit any agreement to arbitrate any dispute
involving a claim for monetary damages.
SECTION 8. Section 171.028, Civil Practice and Remedies
Code, is added to read as follows:
Sec. 171.028. VENUE. (a) Arbitration proceedings in which
a consumer is a party shall be conducted in the county in which the
consumer resides. Arbitration proceedings in which neither party
is a consumer shall be conducted as agreed by the parties or at a
time and place set by the arbitrator.
(b) For purposes of this section, "consumer" shall have the
meaning assigned in Section 171.004 of this chapter.
SECTION 9. Section 171.0495, Civil Practice and Remedies
Code, is added to read as follows:
Sec. 171.0495. DISCOVERY. An arbitrator may permit such
discovery as the arbitrator decides is appropriate in the
circumstances, taking into account the needs of the parties to the
arbitration proceeding and other affected persons and the
desirability of making the proceeding fair, expeditious, and cost
effective.
SECTION 10. Section 171.0525, Civil Practice and Remedies
Code, is added to read as follows:
Sec. 171.0525. SUMMARY DISPOSITION. An arbitrator may
decide a request for summary disposition of a claim or particular
issue (1) if all interested parties agree; or (2) upon request of
one party to the arbitration proceeding if that party gives notice
to all other parties to the proceeding, and the other parties have a
reasonable opportunity to respond.
SECTION 11. This Act takes effect September 1, 2003 and
applies to all arbitration agreements entered into on or after that
date.