Mandatory Arbitration: Will the Empire Always Win? Part Two

June 14, 2012  |  Other, Forced Arbitration

Part Two in a series about mandatory arbitration. Read Part One. Check back next week for the final installment.

Corporate entities (big businesses) insist that ‘predispute’ clauses inserted into consumer contract agreements (beating the consumer to the punch vis-à-vis possible future dissatisfaction) simplifies the legal process of complaints and prevents frivolous, but expensive-to-defend, class action suits representing injury en masse. Consumer groups claim man arb caps damage awards, especially when a particular complaint represents a widespread, rather than isolated, consumer issue. Even plaintiff lawyers are reluctant to take on clients fighting disputes in such a rigged system. Elizabeth Warren, former Obama administration advisor and continued critic of mandatory arbitration, says: “The data suggests [however] that it is Darth Vader’s Death Star— the Empire always wins.”

Today more pervasively than ever, in contracts of every kind, lurks a tiny paragraph that is neither bolded, blocked, nor highlighted. We flip through the pages enshrouding it before signing on a much larger dotted line at the end—smiling without blinking. This is well and good as long as a company’s product or service (to whose terms we have agreed by our own signing) meets expectation. However if it malfunctions, misrepresents, neglects, rips us off, or otherwise injures, we may find ourselves in the unenviable position of seeking fair retribution within a shady, very private, very restrictive system called mandatory arbitration. Now the tiny paragraph jumps outbig-as-life striking with full venom quicker than an angry snake—smiling without blinking.

The paragraph in question is a ‘clause’ (a caveat or disclaimer) preceded by the pesky mouthful: binding mandatory arbitration. Quite literally it means that by unwittingly signing pernicious terms and conditions contained in unread contracts we (consumers) may find ourselves bound by pernicious restrictions if, in the future, we wish to lodge a complaint or dispute. Forced (forc-ible,) arbitration dictates that consumers have no right to take ‘predispute’ complaints of injury to the public court system upon which our constitutional legal system is (was) founded. Rather, forced arbitration is a legal straitjacket restraining a consumer’s quest for justice to the confines of private mediated negotiation, oftentimes arranged by the disputed company, in a conference setting at disputed company’s offices, with an arbitrator chosen by disputed company’s legal team, and paid to find in favor of disputed company’s interests.

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