Mandatory Arbitration: Will the Empire Always Win? Part Three

June 21, 2012  |  Other, Forced Arbitration

Part Three in a series about mandatory arbitration. Read Part One. Read Part Two.

‘The argument for mandatory arbitration’s fairness is empirically unfounded as well as illogical,’ writes University of Wisconsin researcher David Schwartz. Further data compiled by the Searle Institute says business claimants win drastically, overwhelmingly more cases than consumers in mandatory arbitration, with a euphemistic 53.3 percent of consumer cases winning some relief while business claimants win at least 83.6 percent of cases. Business complaints also receive higher awards in victorious cases when compared to victorious consumer awards.

Strange, then, that mandatory arbitration is gaining legal gravitas in the United States, especially in the past three years. In 2011, the U.S. Supreme Court issued three disappointing decisions, all of which further extended companies’ right to insert mandatory arbitration clauses into non-union employment and consumer contracts. For years counter-legislation has been presented to both the U.S. House of Representatives and Senate. In May 2011 the latest version of the Arbitration Fairness Act was introduced to Congress: AFA 2011 is almost identical to AFA 2007 (the bill died in Committee), except AFA 2011 contains language more specific to SEC brokering. If AFA 2011 passes Congress, any predisputed arbitration agreements will be rendered inviolate, unenforceable.

Meantime, BMA architects would see its poison seeping into the tiniest crevices of society. Industry, in all its bigness, has spent a decade trying to convince bank judges-of-rank to believe binding mandatory arbitration is good for our society. Now, however, their argument must be sharpened for presentation to a tougher audience, a group of potential skeptics, i.e., regulatory agencies. With a staggering percentage of American citizens opposed to BMA’s trickery and countless consumer advocate groups lobbying for passage of AFA 2011, perhaps Ayn Rand’s preposterous notion will not be woven into the fabric of America’s near future.

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