Prohibits a seller from requiring a consumer, as a condition of entering into a contract, to agree to a provision requiring arbitration outside of CA for a claim arising in CA.
May not arbitrate a controversy arising in CA under substantive law of another state.
Would apply to contracts entered into, modified, or extended on or after Jan. 1, 2025.
Gives consumers option to have a dispute adjudicated pursuant to the Small Claims Act if a consumer contract requires a dispute under the contract to be arbitrated.
For a consumer arbitration case, requires the disclosure of any solicitation made after Jan. 1, 2025, and within the last 2 years by a private arbitration company to a party.
Prohibits solicitation of a party/lawyer for a party during pendency of the arbitration.
Authorizes depositions to be taken and discovery obtained in arbitration proceedings.
Deems those deposition and discovery provisions to be incorporated into every agreement to arbitrate specified disputes, but only if the agreement so provides.
Requires the State Bar to create a program to certify alternative dispute resolution providers to become certified, with different levels of tiers for provider certification.
Also authorizes State Bar to charge a fee to cover reasonable costs of such program.
Legislative History
On Jan. 17, 2024, bill introduced in the Senate; on May 21, 2024, bill passed Senate.
On May 22, 2024, bill introduced in Assembly; on Aug. 27, 2024, bill passed Assembly.
On Aug. 28, 2024, Assembly amendments concurred; on Sep. 4, 2024, bill enrolled.
Effectiveness
If enacted, bill SB 940 will become effective as of Jan. 1, 2025.
Sep. 29, 2024 CAL LEG Governor Approval
On Sep. 29, 2024, CAL LEG reported bill SB 940 approved by governor, Chapter 986.
Regulators
CAL LEG
Entity Types
CNSM; Corp
Reference
Ch. 986, 9/29/2024; Bill, SB940, 9/4/2024; Rpl CAL LEG 3-9-3-1283.1; Citation: *CAL LEG* 3-4, 3-4-1.86, 3-9-2-1281.9, 3-9-3-1282.6, 3-9-3-1283.05, 3-9-2, 3-9-3-1283.1;
