Texas House Bill HB2696

Texas 2009 - 81st Regular

Caption

Relating to arbitration proceedings.

Impact

The impact of HB 2696 on state laws involves reinforcing the importance of fairness and transparency in arbitration agreements. By requiring that arbitration clauses are clearly stated and agreed upon, the bill aims to reduce instances of parties being compelled to arbitrate under potentially unconscionable conditions. Moreover, it introduces measures to ensure the qualifications of arbitrators, establishing standards that arbitrators must meet, and emphasizing that qualifications are subject to judicial review. These changes are expected to enhance the credibility and reliability of the arbitration process in Texas.

Summary

House Bill 2696 seeks to amend various sections of the Texas Civil Practice and Remedies Code concerning arbitration proceedings. The bill outlines specific requirements for arbitration agreements, ensuring that such agreements are entered into voluntarily, with particular attention on the clarity and prominence of arbitration clauses in contracts. It mandates that those agreeing to arbitrate must initial statements that confirm their understanding and agreement to arbitrate both existing and future disputes. This emphasis on informed consent is intended to protect parties involved in arbitration from being bound by agreements they may not fully comprehend.

Contention

Notable points of contention surrounding HB 2696 include concerns from various stakeholders about the balance of power in arbitration settings. Critics argue that while the bill addresses important consumer protections, it could inadvertently lead to unintended consequences, such as increased litigation over arbitration agreements and burdens on the arbitration process itself. Proponents assert that these amendments are necessary to safeguard individuals who may feel pressured into arbitration without understanding its implications, particularly in contracts of adhesion commonly used in consumer settings.