HB 1236

NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
     HOUSE BILL 26-1236
     BY REPRESENTATIVE(S) Zokaie and Mabrey, Joseph, Lieder, Lindsay,
     Bacon, Brown, Nguyen, Sirota;
     also SENATOR(S) Ball and Hinrichsen, Benavidez, Kipp, Coleman.
     CONCERNING ARBITRATION REFORM.
     Be it enacted by the General Assembly of the State of Colorado:
             SECTION 1. In Colorado Revised Statutes, 13-22-204, amend
     (2)(a) as follows:
           13-22-204. Effect of agreement to arbitrate - nonwaivable
     provisions.
             (2) Before a controversy arises that is subject to an agreement to
     arbitrate, a party to the agreement may not:
            (a) Waive or agree to vary the effect of the requirements of section
     13-22-205 (1), 13-22-206 (1), 13-22-208, 13-22-209 (3), 13-22-217 (1) or
     (2), 13-22-226, or 13-22-228;
             SECTION 2. In Colorado Revised Statutes, 13-22-209, add (3) as
     ________
     Capital letters or bold & italic numbers indicate new material added to existing law; dashes
     through words or numbers indicate deletions from existing law and such material is not part of
     the act.
follows:
      13-22-209. Initiation of arbitration - application.
      (3) EXCEPT AS PREEMPTED BY FEDERAL LAW, IF THE PARTIES TO THE
ARBITRATION AGREEMENT OR PROCEEDING ARE AN EMPLOYER AND
EMPLOYEE OR A BUSINESS AND CONSUMER, A PROVISION IN THE CONTRACT
THAT REQUIRES THE PARTY THAT IS THE EMPLOYEE OR CONSUMER TO PAY
FEES AND COSTS THAT SUBSTANTIALLY EXCEED THE FEES AND COSTS
REQUIRED BY STATE COURTS TO BRING A STATE CLAIM FOR A CASE FILED IN
STATE COURT, OR REQUIRED BY FEDERAL COURTS TO BRING A FEDERAL
CLAIM FOR A CASE FILED IN FEDERAL COURT, IS VOID AND UNENFORCEABLE,
AND THE PARTY THAT IS THE EMPLOYEE OR CONSUMER MAY FILE THE CASE
IN COURT.
      SECTION 3. In Colorado Revised Statutes, 13-22-211, add (3) as
follows:
      13-22-211. Appointment of arbitrator - service as a neutral
arbitrator.
      (3)  AN INDIVIDUAL OR ARBITRATOR, OR AN INDIVIDUAL OR
ARBITRATOR ASSOCIATED WITH AN ARBITRATION ORGANIZATION, IS
INELIGIBLE TO INITIATE, SPONSOR, OR ADMINISTER AN ARBITRATION
PROCEEDING OR TO APPOINT OR SERVE AS AN ARBITRATOR IF THE
INDIVIDUAL, ARBITRATOR, OR ARBITRATION ORGANIZATION HAS A RULE,
POLICY, PROCEDURE, OR DEMONSTRATED PATTERN OF CONDUCT THAT:
     (a) DISCRIMINATES AGAINST A CERTAIN PARTY, TYPE OF PARTY, OR
ATTORNEY, OR APPLIES DIFFERENT RULES, POLICIES, OR PROCEDURES BASED
ON HOW MANY CLAIMANTS HAVE FILED SIMILAR CLAIMS OR HOW MANY
CLAIMS HAVE BEEN FILED FROM THE SAME ATTORNEY; OR
      (b) PREVENTS, OR HAS THE EFFECT OF PREVENTING, A CERTAIN
PARTY, TYPE OF PARTY, OR ATTORNEY FROM:
      (I) ASSERTING THE PARTY'S RIGHTS IN ARBITRATION; OR
      (II) BRINGING A CLAIM IN ARBITRATION.
PAGE 2-HOUSE BILL 26-1236
      SECTION 4. In Colorado Revised Statutes, 13-22-219, add (3) as
follows:
       13-22-219. Award - application.
       (3) (a)   A PARTY THAT FAILS TO FULLY COMPLY WITH THE
REQUIREMENTS OF A RECORD OF AN AWARD WITHIN ONE HUNDRED TWENTY
DAYS AFTER THE DATE OF THAT AWARD IS LIABLE TO THE OTHER PARTY FOR
DAMAGES CAUSED BY THE FAILURE TO FULLY COMPLY.
       (b) NOTWITHSTANDING SUBSECTION (3)(a) OF THIS SECTION, IF THE
PARTIES OF THE ARBITRATION AGREEMENT OR PROCEEDING ARE AN
EMPLOYER AND EMPLOYEE OR BUSINESS AND CONSUMER AND THE PARTY
THAT IS THE EMPLOYER OR BUSINESS FAILS TO FULLY COMPLY WITH THE
REQUIREMENTS OF A RECORD OF AN AWARD WITHIN ONE HUNDRED TWENTY
DAYS AFTER THE DATE OF THAT AWARD, THE PARTY THAT IS THE EMPLOYER
OR BUSINESS IS LIABLE TO THE OTHER PARTY FOR DAMAGES IN DOUBLE THE
TOTAL AMOUNT IN THE RECORD OF AN AWARD CAUSED BY THE FAILURE TO
FULLY COMPLY.
       (c) THE LIABILITY DESCRIBED IN SUBSECTIONS (3)(a) AND (3)(b) OF
THIS SECTION IS IN ADDITION TO THE REQUIREMENTS OF A RECORD OF AN
AWARD.
       (d)THE ONE HUNDRED TWENTY DAY PERIODS DESCRIBED IN
SUBSECTIONS (3)(a) AND (3)(b) OF THIS SECTION TOLL PENDING AN APPEAL,
IF ANY.
        SECTION 5. In Colorado Revised Statutes, 13-22-221, repeal (3)
as follows:
      13-22-221.     Remedies - fees and expenses of arbitration
proceeding.
       (3) Nothing in this section shall be construed to alter or amend the
provisions of section 13-21-102 (5).
        SECTION 6. In Colorado Revised Statutes, 13-21-102, amend (5)
as follows:
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       13-21-102. Exemplary damages.
       (5) Unless otherwise provided by law, exemplary damages shall not
be awarded in administrative or arbitration proceedings, even if the award
or decision is enforced or approved in an action commenced in a court.
        SECTION 7. Act subject to petition - effective date -
applicability. (1) This act takes effect at 12:01 a.m. on the day following
the expiration of the ninety-day period after final adjournment of the
general assembly (August 12, 2026, if adjournment sine die is on May 13,
2026); except that, if a referendum petition is filed pursuant to section 1 (3)
of article V of the state constitution against this act or an item, section, or
part of this act within such period, then the act, item, section, or part will
not take effect unless approved by the people at the general election to be
held in November 2026 and, in such case, will take effect on the date of the
official declaration of the vote thereon by the governor.
PAGE 4-HOUSE BILL 26-1236
      (2) This act applies to arbitration agreements entered into or
renewed on or after the applicable effective date of this act.
____________________________       ____________________________
Julie McCluskie  James Rashad Coleman, Sr.
SPEAKER OF THE HOUSE  PRESIDENT OF
OF REPRESENTATIVES  THE SENATE
____________________________       ____________________________
Vanessa Reilly  Esther van Mourik
CHIEF CLERK OF THE HOUSE  SECRETARY OF
OF REPRESENTATIVES  THE SENATE
      APPROVED________________________________________
                         (Date and Time)
                 _________________________________________
                Jared S. Polis
                GOVERNOR OF THE STATE OF COLORADO
PAGE 5-HOUSE BILL 26-1236