SB 940 Summary

• Prohibits sellers from requiring consumers to arbitrate claims outside California or under non-California law for contracts entered into, modified, or extended on or after January 1, 2025; violating provisions are voidable and entitle consumers to attorney's fees.

• Gives consumers the option to have disputes adjudicated under the Small Claims Act instead of arbitration if the dispute qualifies under Small Claims Act jurisdiction.

• Requires neutral arbitrators in consumer arbitration cases to disclose solicitations made within the last two years by private arbitration companies to parties or their lawyers, and prohibits such solicitations during pending arbitrations.

• Repeals automatic incorporation of deposition and discovery provisions into arbitration agreements; discovery now requires explicit agreement or arbitrator approval.

• Establishes State Bar certification program for alternative dispute resolution firms, providers, and practitioners with tiered levels based on ethical standards compliance and consumer protection commitments.