Committee hears hours of testimony on forced‑arbitration reform; sponsors lay bill over for further work

The House Judiciary Committee held an extended hearing on House Bill 12‑36, a narrow arbitration‑reform bill aimed at improving access to remedies for workers and consumers compelled into private arbitration.

Sponsors described the package as a targeted set of fixes: capping arbitration costs at levels comparable to filing in the relevant court, improving arbitrator neutrality, creating mechanisms to enforce arbitration awards, and allowing certain remedies (including exemplary damages) to be vindicated in arbitration where appropriate. They repeatedly acknowledged federal preemption limits and said the bill was narrowly tailored to the practices state law can affect.

Witnesses were sharply divided. Worker-advocacy groups and legal aid advocates (Toward Justice, Bell Policy Center, Colorado Center on Law & Policy, plaintiffs’ employment lawyers) emphasized that expensive upfront arbitration fees, class waivers and repeat‑player dynamics make arbitration inaccessible for small-value claims and that the bill’s cost and neutrality provisions would restore practical access to justice. Several advocates urged allowing exemplary damages in arbitration to avoid forcing a second court action for statutory remedies.

Opponents (business groups, chambers, defense lawyers, construction and banking interests) countered that the bill would be preempted by the Federal Arbitration Act in many contexts, would create litigation over enforceability, and could redirect large volumes of cases into already strained courts. They warned the fee-cap and expanded damages proposals could produce uncertainty and unintended consequences for industries that rely on arbitration’s predictability.

Committee members pressed witnesses on conflicting empirical studies, the scope of FAA preemption, and whether fee parity with courts is administrable in a private forum. Sponsors said they would continue stakeholder negotiations and consider technical amendments. The committee laid HB 12‑36 over for action only at a later date.