NH Martial Arts Legislation = Consumer Protection or something else?

[Makalakumu]

There are alot of interesting little tidbits in this legislation that I think we need to pay close attention...

Any person operating or intending to open or operate a martial arts school within this state shall file a registration statement with the department of justice. Such registration statement shall contain the name and address of the martial arts school; the names and addresses of the officers, directors, and those stockholders who hold in excess of 20 percent of the martial arts school and its parent corporation, if such an entity exists; the type of available facilities; a written list of each piece of equipment and each service which the school has available for use by buyers; approximate size of the martial arts school measured in square feet; whether or not a shower area is provided; type of membership plans to be offered and their costs; and a full and complete disclosure of any completed or pending litigation initiated against the martial arts school and any of its officers or directors within the last 3 years.

This is really invasive if you think about it. Every peice of equipment in your school and the facilities must be registered with the NH state gov. I can see triplicate paperwork whenever one wants to buy a kicking shield.

Except as provided in paragraph IV, each martial arts school registering pursuant to this chapter shall post a surety bond in an amount of $50,000, or the equivalent in cash, marketable securities, letters of credit, or escrow accounts, with the department of justice. The type of bond shall be designated by the department of justice. No surety bond shall be accepted for filing unless it is with a surety company authorized to do business in this state. The surety may cancel the bond at any time upon giving 30 days' written notice to the department of justice. Any person who is damaged by any violation of this chapter, or by the seller's breach of contract for sale or any obligation arising therefrom, may bring an action against the bond or its equivalent to recover damages suffered and any other amounts allowable by law. The department of justice, in any action brought under this chapter or any other applicable provisions of law, may likewise proceed against the bond or its equivalent. In no event shall the aggregate liability of the surety for all claims exceed the bond amount. The department of justice may reduce the amount of the surety bond or its equivalent if a martial arts school’s membership refund liability warrants such a reduction.

This bond would pretty much guarentee that my school never grows into a larger commercial enterprise. I wouldn't have the money for start-up costs AND this bond and I sure as hell wouldn't take out a loan to do it. IMHO, the biggest losers here are the little guys and the winners are the Mcdojos. The large organizations with the franchised schools are going to have an easier time making these requirements. This provision will protect the establishment and limit competition.

I. Each martial arts school operating in this state shall prepare a comprehensive list of its curricula offered by the martial arts school and the respective price of each plan.

What is this all about? Who, at the governing level, is going to understand and/or judge and/or analyze the various curricula? Who sets the bar?

II. Every seller shall offer a month-to-month membership option and a year-to-year membership option, in addition to any other term contract the seller elects to offer. The availability of month-to-month memberships shall be stated in any written or broadcast advertisement or posting or marketing materials that describe any other membership option the seller offers which apply to the skill level for the prospective students based upon the curriculum of each martial arts school as determined by the director of the martial arts school. No seller shall limit the availability of month-to-month or year-to-year memberships in any manner in which the seller does not also limit the availability of any term contract; nor may a seller accept payment from a buyer or enter into a term contract unless and until the seller has informed the buyer both orally and in writing of the availability of month-to-month or year-to-year memberships. Month-to-month memberships shall offer the same access to martial arts school that prepaid/term or monthly contracts offer. A buyer may cancel a month-to-month membership option with 30 days written notice to the seller, provided the original contract obligations have not been met, for any reason, and have no further obligation to the seller.

So, the state is going to start telling people how they can do business? I personally do not believe in year to year contracts. I guess in NH, I would be forced to offer them.

II. Martial arts schools shall be prohibited from making any misrepresentation to current members, prospective members, or purchasers of membership contracts regarding:
(a) Qualifications of staff.
(b) Availability, quality, or extent of facilities or services.
(c) Results obtained through martial arts training.

This part of the law clearly states that it is now against the law in NH to lie about your rank, lie about your facilities or services, or lie about the effectiveness of what you are going to teach. All three of these have very profound implications. A and C especially.

For example, if A is going to become law, then there must be some sort of bar that should indicate what qualified staff would look like. Perhaps, the government isn't going to set the bar and is going to let the major martial arts orgs set it. They, afterall, are going to be the ones who are giving out "legitimate" rank. What about people who are not part of major orgs? How do they ensure their qualification? Again, the Mcdojos win.

C is even more interesting. If you claim that your art is good for self defense and a student goes out and gets the crap kick out of them, are they now able to sue their teacher for giving them "faulty" skills? How is this going to be judged?

upnorthkyosa

 

[Carol]

This is really invasive if you think about it. Every peice of equipment in your school and the facilities must be registered with the NH state gov. I can see triplicate paperwork whenever one wants to buy a kicking shield.

The quote said nothing about ongoing purchases, only initial registraion.

This bond would pretty much guarentee that my school never grows into a larger commercial enterprise. I wouldn't have the money for start-up costs AND this bond and I sure as hell wouldn't take out a loan to do it. IMHO, the biggest losers here are the little guys and the winners are the Mcdojos. The large organizations with the franchised schools are going to have an easier time making these requirements. This provision will protect the establishment and limit competition.

Small schools would easily comply with:

IV. The department of justice shall exempt from the bonding requirement set forth in paragraph III any martial arts school that meets any of the following conditions:
(a) Provides the department of justice with a statement that the martial arts school only accepts membership fees on a monthly basis.
(b) Establishes to the satisfaction of the department of justice that its membership refund liability does not exceed $5,000

What is this all about? Who, at the governing level, is going to understand and/or judge and/or analyze the various curricula? Who sets the bar?

There is nothing said about analysis or judgement being done. It is a requirement for a descriptive price list.

So, the state is going to start telling people how they can do business? I personally do not believe in year to year contracts. I guess in NH, I would be forced to offer them.

Incorrect. That is a stipulation for how contracts are to be offered. It is not force a school in to offering them. Not offering contracts would also exempt you from the $50K surety bond.

This part of the law clearly states that it is now against the law in NH to lie about your rank, lie about your facilities or services, or lie about the effectiveness of what you are going to teach. All three of these have very profound implications. A and C especially.

For example, if A is going to become law, then there must be some sort of bar that should indicate what qualified staff would look like.

Not at all. There is a difference between "qualifications" and "qualified". The law states that qualifications must not be misrepresented. It says nothing as to whom is qualified.

Perhaps, the government isn't going to set the bar and is going to let the major martial arts orgs set it. They, afterall, are going to be the ones who are giving out "legitimate" rank. What about people who are not part of major orgs? How do they ensure their qualification? Again, the Mcdojos win.

By not misrepresenting what their qualifications.

C is even more interesting. If you claim that your art is good for self defense and a student goes out and gets the crap kick out of them, are they now able to sue their teacher for giving them "faulty" skills? How is this going to be judged?

Self-defense means that one will defend. It does not mean that one will succeed.

Anybody can attempt to sue anybody else over anything. One doesn't need this law to do that.

 

[michaeledward]

Just a couple of thoughts .....

The cost of a surety bond usually runs between .5% and 1% of the face value of the bond. So that $50,000.00 surety body would cost between $250.00 and $500.00 per year. But even if you assume a very expensive bond, because of the low dollar value (Surety Bonds are usually in the millions of dollars), it might be an operating expense of $1000.00 year. While not chump change, I don't think this amount would prevent any business from opening its doors.

As for the qualifications of the staff ... I think this language may be taken right out of the health club legislation. Having recently had a consumer disagreement with a health club, I can appreciate the language.

We watched Penn & Teller's season 2 of '********' the other week on DVD. They have an episode about 'Exercise vs. Genetics' - how genetics determins body shape far more than exercise. But, people operating health clubs know that new members drop out after two months (as a rule) .... they use long contracts to keep the cash flow up. Further, they make claims about nutritional supplements that are unsubstantiated. And, perhaps make claims about their employees as Nutritionists, Physical Therapists, Personal Trainers, etc. I can see those degreed titles being mis-used and mis-applied in the Health Club arena far more easily than the Martial Arts arena.

Again, in the equipment language, it seems that stealing the language from the health club legislation creates a detrimental effect. The studio where I study basically has a carpet ... and a half a dozen standing kickpads ... some kick shields and focus mitts. Whereas a health club will have between 4 and 24 treadmills, several universals, free weights. In martial arts, we use our bodies, and others bodies for resistance. In a Health Club, it is usually the machine that provides resistance (except for aerobics class, right?).

Lastly, I guess we can be confident that the New Hampshire House of Representatives Commerce Committee is doing its part to kill this bill. It has been referred to study. It will quietly fade away, never to become law.

 

[CuongNhuka]

I am one who believes that people can, and should be self regulating. I think government guidlines should be done only when members of an industry refuse to self-regulate. if we as an industry (which is probably how these individuals look at this) cannot self regulate, then we need them.
I think the best way to deal with this is to find some way for us to wipe out the mcdojos on our own. I don't know how to do that, but it's the best way for us to not need the gov in arts. They might impose regulations that make it so that legitimate schools are put in a turdy place.
This reminds me of a post from a while ago about the Canadian some-one-or-other trying to ban all forms of martial arts. Anyone remember that, or know how it turned out?

John

 

[evenflow1121]

I dont even know what to make of this, on the one hand, and after reading some of it, I can not help but think of the whole Mc Dojo concept. Has it gone so far that consumers require protection, has there been so many problems with MA contracts and shady third party organizations as to require this type of law? Perhaps, I dont know. I am NOT going to condemn the entire bill, some parts of it, I must say I agree with, mainly the parts that deal with contract protection. I have heard of individuals who have signed up at schools, paid what they thought was due, thought had terminated their contract, only to have a third party collection company fiddle around with their credit.

The whole curricula thing I am kind of iffy about, I dont believe they are trying to go after the credibility of anyone per se, as they are trying to how can I put this, make sure that what you are paying for as a consumer is reasonable when compared to what your training is. However, that goes against free bargaining, if you are happy paying for services renderred that is your issue, moreover, if you are happy learning crap at some Mc Dojo that should be your issue as well.

III of annualized is kind of funny, on its face it seems that it is a good idea, of limiting a month to month plan to not exceed 25% of that of an individual who pays for the whole year, but in reality you dont really know what kind of facilities any given studio has, hence their added cost, so it is not good to generalize.

Finally:
II. Martial arts schools shall be prohibited from making any misrepresentation to current members, prospective members, or purchasers of membership contracts regarding:
(a) Qualifications of staff.
I think this is very good, as no more Jedi's, Grandmasters, Gods or Titans of who knows where.
(b) Availability, quality, or extent of facilities or services.
I see no problem with this as well.
(c) Results obtained through martial arts training.
Ah, results obtained, this is clearly impossible, because not everyone that walks into your school will ever obtain the same results, as people come in all shapes, sizes and talents.

Overall a nice attempt at protecting consumers, but I think it goes too far.

 

[Makalakumu]

Ya have to think like a lawyer whenever you are trying to interpret laws. Parsing words is a must. Asking what the definition of the word "is" is perfectly understandable when it comes to legalspeak.

I agree with Michael. This is probably no way this will ever get on the books, however, the language does bear paying attention too. It is vague and the implementation of these statutes could be accomplished in numerous ways...good or bad.

 

[trueaspirer]

Well, it seems decent, except that the govenment shouldn't be messing around in things like this. They're not here to regulate our lives!

 

[michaeledward]

Martial Arts studios in New Hampshire are already regulated. Currently, anyone offering Martial Arts instructions is considered a 'Health Club'. They are subject to the same regulations as a 'Health Club'.

Now, I don't know why someone would wish to break out Martial Arts instruction differently than the Health Clubs (Gold's Gym, Curves, etc). But that is what the bill is proposing.

I had emailed the sponsor of the bill yesterday, asking why he proposed the bill. I have not yet received a response.

 

[tshadowchaser]

If I remember correctly this law was put befor the NH legislature a few years ago also or at least was talked about back then. I don't have the facts as to why it came about.
I think and hope it fails.
It is a way for the NH goverment to make a little more money but I hate to see the goverment start regulating what we do

 

[Carol]

Martial Arts studios in New Hampshire are already regulated. Currently, anyone offering Martial Arts instructions is considered a 'Health Club'. They are subject to the same regulations as a 'Health Club'.

Now, I don't know why someone would wish to break out Martial Arts instruction differently than the Health Clubs (Gold's Gym, Curves, etc). But that is what the bill is proposing.

I had emailed the sponsor of the bill yesterday, asking why he proposed the bill. I have not yet received a response.

The reason why is indicated in the synopisis.

MA schools are currently regulated as health clubs and as such, those that offer contracts are restricted to 1 year max. By offering a seperate legal definition, the club can offer longer contracts.

Other matters of compliance such as registration, equiment list, requirements and surety bonds seem to already be in effect with the current definition of MA schools as health clubs.


Source: New Hampshire State Bar Association

Health Clubs - Every person owning or operating a health club in New Hampshire must register that club with the Consumer Protection and Antitrust Bureau of the New Hampshire Department of Justice.

A copy of the club's registration statement must be kept on file at the club for inspection by club members or members of the general public.

The registration statement contains information on the club, its owners, the types of memberships offered, the type of equipment available to members and the number of members in the club.

Most clubs must also post a surety bond or other financial security with the Bureau.

If you are interested in joining a health club, ask the owner to provide a copy of the registration statement and contact the Consumer Protection and Antitrust Bureau at (603) 271-3641 to determine if the club is bonded.

http://www.nhbar.org/for-the-public/consumer-protection-in-new-hampshire.asp

 

[tshadowchaser]

off topic maybe but do you really think all of the instructors in NH have registered their school or told the goverment they are teaching
will a bill like this force some to start teaching in their homes or to exclusive groups of students to keep what they do away from goverment interference

 

[KOROHO]

And here's the way around it:
Exclusions include:
(b) Any nonprofit religious, ethnic, community, or service organization.

This is how the Shorinji Kenpo folks got around the ban in Japan - they called it a religion.

Given as much fraud as there is in martial arts, with the vast majority of instructors not holding the ranks and titles that they claim, it would seem that legislation is appropriate.

The problem is, who will write the legislation and who will decide what a legitimate school is? How is the the state going to research history and lineage and test instructors to ensure legitmacy? They will never be able to do that.

What will happen is that they will get together a panel of "10th Dans" and "Soke" and eventually legislate against the legit teachers who are not concerend with making money. This legislation will not limit the Mcdojo industry it will expand it and shut all the best teachers down.
Unless of course they seek shelter under the banner of a church or other religious group.

 

[Last Fearner]

Carol has offered many excellent replies to help explain this legal language, and I commend her on doing that very well. Sometimes it takes a lawyer to fully understand what is being implied by these bills, and laws. I am not a lawyer, but I have studied legal language for some time, and have had quite a bit of experience in, and around the law and courtrooms.

I have operated Martial Art schools in Michigan for about 28 years. At first, I did not use a contract, because I did not want to force students to be there if they didn't want to. Plus, I didn't know much about contracts back then. Now, I wouldn't open my doors without a written contract signed by my customers. I use them mostly for my protection, but also to comply with laws regarding consumer protection. My contracts meet virtually all of those requirements listed in this NH law, and exceed what is required in Michigan.

First of all, understand this. If you agree to teach anyone, anywhere, anytime, (in your basement, in your garage, in your backyard, or in a public facility) you have entered into a legal and binding contract. Even with a verbal agreement, and especially when money exchanges hands, you become liable in many ways. By most any standard of law, you must not misrepresent the services you offer, or the qualifications you claim. When you accept money in advance, you must then provide the service. If you fail to provide the service, you must refund the money (and often with interest).

Secondly, understand that the primary purpose of this type of legislation (besides another way for the government to generate revenues) is to provide a written law in which to settle disputes between the seller and buyer of goods and/or services. All businesses are required to meet these obligations to one extent or another. This particular law is geared mostly at the Martial Art school that accepts payments, in advance, for future promised services. It is reasonable that an instructor will require payment for the upcoming month, then provide the service for that month. No major law suit comes out of failure to provide a months service, and a refund is usually no problem if the instructor fails to provide services.

The problem arises when an instructor accepts $1,000.00 or more for the next year's training, then the student moves away, or gets injured after one month, or if the instructor fails to meet obligations promised, and the student quits, and demands a refund. Most of these instructors have already spent the money on rent, and new kicking pads, and do not have enough in the bank to meet their obligation to refund. Imagine if it is five or ten students who need refunds, or if it is a three year contract paid in advance.

The law simply states that if you are going to accept money in advance, you must provide assurances that you can refund it if necessary. There is nothing wrong with requiring a member to sign a one, two, or three year contract, and agreeing to the monthly payments as they go. This way, they are obligated to pay for the full term of the contract as long as you provide the services, but if the contract must legally be cancelled for any reason, there is no money to be refunded, because you have not taken any money in advance.

As to this "qualifications" clause, others here have stated correctly. No need to get concerned about who is going to apply what standard - this has nothing to do with that. This type of clause simply prevents an instructor from making false claims such as "I am a 9th Degree Black Belt with the World Taekwondo Federation," or "I was the 2000 Olympic Gold Metal Winner," or "My school is certified by the U.S. Judo Association," if these claims are not true. No one's personal skill, individual rank, or grandmaster title will every be judged legitimate by the courts unless you claim it is issued by a certain person, or organization that did not issue it, or that you are a "member" of an organization that you are not.

On the other hand, when the "McDojo" instructor claims to be an expert, and a consumer takes him to court for damages of personal injury during training, or lack of ability to provide anything worthwhile in their instruction, the credentials and rank bragged about might be brought into question, and the instructor might look like a con-artist if they can not show some legitimate training and certification. You are best to have a lawyer prepare a contract that protects you (as best as possible) from such suits.

The issue of misrepresenting results is not an issue of "will the person be able to defend themselves." I have a clause in my contract that specifically addresses this issue. It states that no guarantees of satisfaction, nor unrealistic goals of rank achievement, weight loss, competition results, or self defense abilities, expressed or implied, are made. If a student thinks they are going to become a Black Belt in one year, lose 50lbs, win an Olympic gold medal, and be able to beat up all attackers in the street, they are mistaken, and you can not legally make such claims to your customers. Misrepresenting results simply means making promises you can not guarantee to fulfill.

Also, don't be too certain that these kinds of bills (if it is not already passed) won't make it to law. They often do. The question is, will they be constitutionally correct, and will they affect anything other than those who clearly defraud the public. This type of law will likely mean more paperwork, and some fees, but nothing unbearable. I think this laws is fine, but I do become concerned as to how far they might go in attempting to regulate what we teach.

I hope this helps to clear up some of the confusion.
CM D. J. Eisenhart