Article Image
Arbitration Reform Making Headway In New York

Wednesday, June, 26, 2013



As arbitration has become an increasingly popular option for resolving disputes, reform has made its way to headlines as a way to improve a process with great success.  Tweaks to existing arbitration has the potential to make arbitration more fair and successful overall, which is part of the reason the state of New York considered making some changes to existing arbitration structures. 


Governor Andrew Cuomo recently shared that an agreement has been reached for legislation on financial restructuring boards for local governments in addition to arbitration reform for the state.  Bills related to these two issues and endorsed by Cuomo, were approved by the Assembly and Senate. 


The new reform for binding arbitration will now allow municipalities to manage finances and support public services at lower costs.  Part of the law is that unions and municipalities will be able to opt for an alternative binding arbitration process for contract issues.  These cases would be expedited, allowing for faster resolutions.


The specifics of the law are that the statute for binding arbitration will be extended over the next three years.  For municipalities that quality, the statute will create "ability to pay" standards for arbitration panels to adhere to.  This is a big change with regard to municipality ability to pay, as many localities are struggling with budgets and decreasing property values around the state. 


The biggest support for the new binding arbitration reform is that it takes into account the financial situations of the municipalities.  As arbitration grows as a popular dispute resolution tool, municipalities must be prepared for how they will implement it and make it the most successful and effective tool for the residents of their area.  The need for legislation was supported by statements made by the New York Conference of Mayors and now has support from the state legislature to back up their requests.