Testimony in Support of H-7952 and H-7942, concerning Arbitration and Deceptive Trade Practices
House Committee on Judiciary
March 21, 2024
Alan Krinsky, Director of Research & Fiscal Policy
The Economic Progress Institute supports Chairman Craven’s H-7952 and H-7942 which together would protect Rhode Island consumers and employees from corporations that seek to make it difficult, if not nearly impossible, for them to exercise their contractual rights of redress.
We are all familiar with long contracts displayed in tiny font sizes when we make purchases of goods or services. Such contracts include provisions which provide consumers with rights to action in cases of problematic or deceptive products and services. The corporations presenting these contracts already arrange the system in their own favor, for instance by requiring consumer complaints to go through arbitration rather than through the courts. What has changed in recent years is that such corporations have inserted additional clauses to make such consumer action even more difficult. For example, they may require arbitration as a method but then refuse to pay required and agreed upon fees for the arbitration, stalling the process and preventing consumers from pursuing a matter. Or they create other limitations such as forcing a consumer or employee to absolve the company of wrongdoing altogether or preventing consumers from joining together in class action suits.
H-7952 would amend R.I.G.L. Chapter 10-3, concerned with courts and civil procedure, to improve the notification processes for arbitration, protect the right to representation, and hold companies responsible for breach of contract. H-7942 would make a simple but significant change to Chapter 6-13.1 of Rhode Island’s statute devoted to commercial law and deceptive trade practices, to protect consumers from any clause, in the language of the proposed legislation, “which unnecessarily burdens a person's effective vindication of rights.”
Taken together, these two pieces of legislation would benefit Rhode Island consumers and employees, making them better able to exercise their rights, to provide them with a fighting chance in seeking legal and financial remedies for being wronged. Large corporations design these contracts to create a system in which they cannot lose. They are not entitled to such a system, and we urge you to send this legislation to the full House.