What is arbitration?
If I told you there was a courtroom in America where consumers lose lawsuits to businesses 94 percent of the time, and there is no chance to appeal, you’d probably never want to go there.
But here’s the problem: You don’t have a choice, thanks to small print.
Binding mandatory arbitration is a part of nearly every significant transaction you engage in now. Millions of Americans are bound by at least one mandatory, pre-dispute arbitration clause. Buried in the fine print of a billing insert, employee handbook, health insurance plan, or franchise agreement, these clauses waive one’s right to access the courts, diverting cases to a costly private legal system that favors defendants.
Arbitration clauses are achieving their intended purpose of undermining consumer protection, civil rights, and other laws that level the playing field between big businesses and individuals. The individual is left with no choice but to waive these rights, because arbitration clauses are presented on a take-it-or-leave-it basis.
A California law passed in 2002 required arbitration firms that do business in the state to publish court results on their Web site. One of the three main arbitration forums, the National Arbitration Forum, began posting records soon after. Some highlights include:
• Businesses initiate the legal actions in the National Arbitration Forum nearly all the time. Of the 34,000 cases filed, only 118 were filed by consumers.
• In the 19,300 cases that were decided during the time period, consumers prevailed only 4 percent of the time, while businesses won 94 percent of the time. Winners were not listed in the remaining 2 percent.
• About 99 percent of the cases filed by businesses were collection cases; and a majority involved credit card firms trying to recover bad debts.
• A small number of arbitrators decide nearly all the cases. The study found that 28 arbitrators handled nearly 9 out of every 10 cases.
• Public Citizen found one arbitrator had ruled 1,292 times during the span — and only 21 times for the consumer. On one particularly busy day, he ruled on 68 cases — all in favor of companies. The arbitrator did not respond to an e-mail request for an interview.
What can I do?
If you or a loved one has become a victim of arbitration, you may be entitled to compensation. Please contact us today by filling out the brief questionnaire, or by calling our toll free number (1-800-898-2034) for a free, no-cost no-obligation evaluation of your case.