§ 1284.3.Fees and Costs Assessed In Consumer Arbitration

This section takes direct aim at a lopsided kind of arbitration clause. No neutral arbitrator or private arbitration company can administer a consumer arbitration under an agreement or rule that would make a losing consumer pay the fees and costs of the opposing party -- including arbitrator fees, provider-organization fees, attorney fees, or witness fees. A "loser pays everything" clause aimed at consumers is not enforceable in this setting.

The section then builds in a separate protection for consumers who cannot afford the arbitration in the first place. All fees and costs a private arbitration company itself charges or assesses on a consumer party -- not counting the arbitrator's own fees -- must be waived for an "indigent consumer," defined as someone with gross monthly income under 300 percent of the federal poverty guidelines. That waiver does not stop the company from shifting those costs to the nonconsumer party instead. Before ever charging a fee, the company has to give prominent written notice of the waiver right -- in its first communication with the consumer and in any invoice, bill, submission form, fee schedule, or set of rules. A consumer establishes eligibility with a sworn declaration, on a form the company itself provides, stating monthly income and household size -- no further proof can be demanded. Whatever the company learns about a consumer's identity, finances, or waiver request stays confidential from adverse parties and nonparties, with one exception: the company cannot keep confidential the total number of waiver requests it receives or grants, or the total amount of fees it has waived.

The section closes by fixing its own scope: it applies to every consumer arbitration agreement subject to this article, and to every consumer arbitration proceeding conducted in California.