I am not sure how accurate these statistics are - we are a publicly traded company and have lost just as many arbitration hearings as we have won - paying our own legal fees most of the time.

I don't agree with you conclusion. You state that "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." It seems logical that the party filing would be the agrieved party. I think what you have found here is more a case of consumers not understanding how to use the process, than one-sided decisions.

Most large businesses will go by their contract. Nothing more nothing less. The two percent of consumers are the realistic consumer that has truly been wronged. The rest are consumers who do not want to be held accountable to a contract or trying to get something for nothing. It's sad that this is becoming a trend for todays consumers and it is giving the people who want what they paid for a bad name. I work in Customer Service for a home builder and see this every day.

Companies are also requiring potential employees to sign mandatory arbitration agreements for any employee dispute resolution. They're also requiring it of existing employees at the time they begin implementation. As it was described at my company - "You have a choice. You can go work somewhere else."

Congress needs to change this policy from arbitration to mediation. Mediation allows the parties to resolve the case themselves with the assistance of an impartial mediator. It is a give and take forum where each side provides the strengths and weaknesses in a non-confrotational forum. Arbitration leaves the decision to another. Mediation leave the decision to the parties in interest. As a professionl who does mediation and arbitration, mediation is a more satisfactory resolution method for all parties.

Always cross out that clause before signing your agreement.

Generally arbitration benefits the small consumer. I once had a disagreement with the old ATT and because the sum was under $300 they had to pay all costs. They did not want to proceed and they paid me the money they owed me. I do agree however that there should be appeal rights.

So let's see:

1. These are clauses in contracts that are freely entered into by competent adults for services that companies are under no obligation to provide to them unless both parties agree to the terms of those contracts. No threat to Constitutional rights there, as far as I can see.

2. The success rate for consumers is identical to their success rate in court. So there is no harm to the consumer.

3. Parties that lose in arbitration have to pay for the expenses they force the other party to take on, whether by improper action (if the claim is valid and the filer wins) or by bringing an invalid claim that must be fought off. You have to understand that when lawyers throw around the term "frivolous" they don't mean the same thing you and I do. Very few of the ridiculous lawsuits filed in America today meet the standard of "frivolous" required for the claimant to have to pay the defendant's legal fees.

What was your point, other than to trot out the ATLA/Public Citizen Party line?

I first noticed this when I purchased a new vehicle in May of this year. The dealer 'never noticed that clause before,' but didn't object when I refused to agree.

I don't understand how these provisions are enforceable. If, say, only one cell company had it, you could argue that the consumer has the ability to choose another company that doesn't force it down their throat. But when the choice is either suck it up, or go without a [cell phone/credit card/car/fill in the blank...], then there is no choice at all.

A company providing a service has the right to protect itself and receive what it is due for service. It also has the right to 'by due process of law' to pursue non-payment for those services given. Just about every 'contract for service' I have been given has had this clause in it. I have asked the clause be removed before I receive service and I have been told 'by the customer service person or person giving me service', "that is not within their [job scope} and to contact their legal dept.". Life is too busy to pursue that action everytime I request a service. Will I need to agree to it get a taxi in NYC next? The clause (at least for the consumer) should be in BOLD LARGE print at beginning of contract so there is NOTHING to hide, if clause is good for both parties (consumer and business). Going to another business is not a CHOICE if (as I have encounter) most, if not all, business use this clause. Mediation is better, it levels the field. Consumers and businesses both have the responsiblity to pay what is owed, when it is owed!

The deck is stacked, and the Courts do not care because it clears their dockets. As consumers, we are a discrete and insular minority.

I have lived all over the world. This country is the most criminal I have ever seen. If you're not looking, someone will even take your underwear right off you. I understand why travel is not encouraged here. People will find the rest of the world is mostly decent.
MC

There are companies including arbitration in their contracts in order to discourage others from taking legal action by stating in the contract that arbitration must take place where the company is located. For businesses dealing with people across the country, this can be a major obstacle because the contract doesn't give any hint that there are other ways of conducting the arbitration hearing.

If those statistics are correct, the make perfect sense. If 99% of the cases are collection cases, it makes sense that unless the debt is not valid, then the winning percentage of those companies would be extremely high because losing your job, or having to get your car fixed, or other similar excuses is not a legal defense to a collection action. Why wouldn't it be a 94% success rate? And do we really want all those collection actions clogging up the courts? All the companies would end up doing is moving for summary judgment anyway and end up with the same result they get at arbitration.

Again this is a case where cunsumers have no choice, due to the fact that they have no choice but to sign these massive contracts - that are often only handed to them AFTER the sale is final - when consumers want simple products like cell phones, airline tickets, or car rentals. Since virtually ALL companies use such small print, the only "choice" the consumer has, is to not use a certain product. Is that possible? Yes. Is it convenient to live without cell phones, flying and car rentals? No.

Free market? I only wish.

Let me remind the free-marketeers here, that a truly free market only exists when there are MANY sellers and MANY buyers. In the case of cell phones, airlines and car rentals, that are not MANY sellers. There are FEW. The fact that there is no real competition is further proven by the fact that they all offer a nearly identical product, for a nearly identical price, with nearly identical provisions. Finally, in nearly all cases, consumers are generally UNHAPPY with the service they receive. This is irrespective of the level of service they purchase. In all cases, they have to sign the same contract, with the same fine print.

Maybe Bill from Portland doesn't realize there is nothing voluntary about these clauses. Try to open a brokerage account without waiving your right to redress in the courts. When you can't buy a particular service without an arbitration clause, then it's not freely engaged.

If it was mediation, I'd have less trouble with the clauses. That should be a required first step in any court case. But no one should be able to sign away their rights to a court review, ever. And certainly not with a click-through or contract change after the fact.

But hey, Bill, don't let that stop you from being a sanctimonious corporate stooge.

The most important statistics are not given here. The statistics I want to see are what happened to the 118 cases filed by consumers? If consumers lost the majority of these cases than arbitration has a problem; if they won then arbitration is the way to go. As others have pointed out companies normally win over 90% of collection cases.

I have been through both the court system and through mediation. The courts are extremely slow and tie up so much time and are costly. Mediation is much quicker and you get to a the same resolution as you would in court. I "won" my court cases according to my attorney but he made out much better than I did.

Binding arbitration, like most things, has it's good side and it's bad side. Some of the provisions that can seem unfair can also benefit. If "looser pays" sentiment ruled not all of the frivolous lawsuits would go to our overwhelmed justice system. It will, however, hurt our well intentioned and honest consumers as well.

Another area where these clauses are being widely used is for dental services. In my area, you cannot obtain dental care from most providers without signing a mandatory binding arbitration clause. These clauses do not just cover collection issues, but also malpractice claims as well. In addition, if the patient wants to initiate a claim it is up to him/her to pay the up front costs for arbitration. Dental care is not something you can just decide not to purchase. I am not talking about orthodontics or other elective dental services, but rather about necessary and medically needed services like fillings and root canals. People are being forced, by need and urgency, to enter into these agreements or face the consequences of not receiving care. It's not like you can go somewhere else when everyone is requiring it.

A big problem I see with arbitration, is that it is decided basically by lawyers. I understand that the courts are overwhelmed and companies are paying way too much to defend themselves with everyone trying to make money through the courts but why can't the arbitration boards also include working-class representatives to ensure impartial decision making. Isn't that why jury trials exist. Or maybe Consumer Councils/Organizations should have representatives at the arbitration. Honestly, I usually don't see or hear a lawyer taking on the issue for the "little consumer" unless there is "something in it for them" with that in mind, I'm not sure how impartial they would be at arbitration.

I continue to receive letters with titles from multiple law agencies requiring me to pay AT&T debt for prorated monthly fees for service I never used. My contract was with SUNCOM (allows cancelling service at any time prorated) before AT&T bought SUNCOM (there policy requires full months fee despite cancellation time). I never signed any AT&T agreement and was never notified (never received notice of change) while moving to another state. It has now showed on my credit report despite several letter countering arguing my position. Arbitration is a corporate tool to ameliorate consumer rights. I now look for small print and scratch out Arbitration clauses and if had a coice would not contract with any company using them.

having practiced law for thirty plus years, i've seen both sides of the question. some of the other comments aside, the present situation is grossly unfair and one sided to the average consumer. my suggestion: wait until a dispute develops before an election is made rather than waive this right (unknowingly) before hand. at that time both sides can decide where the issue should be heard.

by the way, i got a chuckle out of the observations that these agreements were 'freely' enter into.

I have practiced arbitration law for five years and have found that it is the single biggest ripoff going. I always cross out the arbitration clauses in preprinted contracts. Usually the person I'm dealing with from the company is some underpaid and inexperienced 20-year-old who has no idea what to do in response. If they ask, I just tell them that arbitration is a freely-negotiated matter of choice (at least that's what the courts say), so I'm making my choice not to accept it. I have never been refused a transaction because of it.

well bill,

1. these are clauses in contracts which are not understood by the general public, and which in some circumstances substantially lessen the rights of the consumer that enters into it.

do you think a person should have to higher a lawyer to interpret the requisite contract in order to obtain a cell phone? or should they just up and go to law school themselves?

2. the ruling in a court of law can be appealed, while these arbitration rulings often cannot. the consumer *is* thusly harmed.

3. average joe american does not understand the intricacies of the arbitration system. i'd consider myself a fairly well educated person, and i don't. when they are told that they cannot bring suit in court, but must instead engage in this esoteric process of arbitration, they are far more likely to simply give up.

there are basic constitutionally guaranteed rights which cannot be signed away in a contract no matter how much convoluted legal jargon the contract is couched in... such as your right to your day in court.

I see a lot of defenders for companies' policies here. You have to remember the usual excuse when companies break the law: they are here to make money, what else would you expect ? As if that justifies anything, all crimes.
They put these clauses in to benefit THEM. Any benefit for them is a LOSS for YOU, the consumer.
Trying to go around a constitutional right should be a CRIME for which the lawyers that thought up this on behalf of companies should be PROSECUTED, DISBARRED and JAILED.
Subverting the BASE LAW OF THE LAND, The Constitution should be a crime that the Supreme Court should institute harsh penalties for. But then, they seem to be busy with other things.

Bill, Portland. OR

You sound like you run a collections company!

Mickey, Greenfield, MA

Pay cash, don't sign contracts, don't owe people money. Save up the money to buy something, then as the consumer, you hold all the power. If you must sign a contract for a mortgage, take the time to read all the fine print, and shop around if you don't like it and can't change it. Yes, refuse the deal, even at the closing table, if they won't strike the clause. People get themselves into these things nowdays because they sign anything put in front of them without reading the details. We can't depend on the government to keep us safe anymore.

We can see the difficulties that can arise from arbitration and consumer issues. But the Health Care industry should've NEVER been given the option of arbitration. In nursing home/rehabilitaion centers, it is nothing more than a license to kill. I've seen it with my own eyes. My father was murdered in a nursing home. He was only supposed to be there for rehab from a stroke. He fell to his death there due to negligence. Now we're faced with an arbitrator, and we don't stand a chance. This is truly unconstitutional in every way.

The arbitration clause certainly is one sided. Another type of this clause is a clause with your credit card holder, that they, at their sole discretion can vary any contract agreement soley at their discretion after giving you whatever the number of days notice the law requires. Why doesnt Feingold take up that also?

We can see the difficulties that can arise from arbitration and consumer issues. But the Health Care industry should've NEVER been given the option of arbitration. In nursing home/rehabilitaion centers, it is nothing more than a license to kill. I've seen it with my own eyes. My father was murdered in a nursing home. He was only supposed to be there for rehab from a stroke. He fell to his death there due to negligence. Now we're faced with an arbitrator, and we don't stand a chance. This is truly unconstitutional in every way.

i think congress is doing the right thing by looking into this. alot of time if we as consumers want anything such as cable, credit cards and so on, we dont have many choices especially when these types of cluases are in all the contracts. we can do something about it by biting the bullet and not puchasing the product and telling the rep why we arent buying but not enough people want to go without. this type of bussiness dealing should be illegal considering they are hindering our constitutional rights. i think the best way to handle these types of situation is making a club such as the aarp, aaa that document busssineses that par take in bad bussiness practice to right letters and cancel services. when we do this they will see that WE actually hold all the cards and not them

Mandatory Binding Arbitration is used by some major corporations to get out of everything, including paying their employees! My company used this to get out of paying me over $100K in commission sales! It's unconstitutional! I did not sign anything agreeing to this when I started, but then later in order to keep the job, insurance, and all the money they already owed me, my company simply had all the employees sign stuff agreeing to this, and many other things after the fact. Then they went through and started "constructive termination" process on people they owed money to, and used their new rules, and this arbitration process to get out of paying everybody! Major companies are getting away with paying salaried commissioned employees whenever they want, how much they want, if they want, and no one is looking out for them. The general rule of thumb is that you took the job, you did so at your own risk! Isn't there some kind of "lemon law" for that. In my case, I made the company millions of dollars! They got what they wanted,a nd are not trying to use "binding arbitration" agreements we were forced to sign after we were already employed to get out of giving us our share!

You can't just go work somewhere else! The companies that are implementing this owe these employees money already! In my case I was owed $50K at the time they made us sign it, with two kids in need of medical insurance that I had with the company. People can't just WALK away from $50K they already earned, and medical insurance! We were forced to sign this stuff! by the time the company owed me $80K, and the money was scheduled to start coming in, they used "constructive termination" techniques to force me, and others out! When I was awarded unemployment due to "constructive termination" the company then started "laying off" people, but is still trying to use the binding arbitration to get out of paying the employees the money they earned even though the company got theirs!
Go find another job - go work somewhere else - get a clue! In this day and age, people can't afford to just walk away! They have to earn money to feed their families...it's not easy to just go get another job!

Mediation is not the answer either. Companies using this binding arbitration process on their employees are making "mediation" part of the process. The problem is they are using their own management staff to oversee the "mediation"...they are not paying the huge amounts to get an outside mediator. Also, there are stories that outside mediators tend to find in favor of the person paying them, which is the company. The only way an employee is ever going to be on fair and equal playing level with one of these companies is in court!

Many states, especially California, have laws that invalidate most arbitration provisions in employment contracts, saying that they are "unconscionable."

But in the consumer context, you have a large number of claims for extremely small amounts. You can't really expect that these claims would be submitted to court, especially if they involve routine collection actions. After all, do you really want your taxpayer dollars going to expand the Courts so Verizon can bring thousands of tiny collection actions on unpaid cell phone bills? With arbitration, these costs are borne by the parties to the contract, not the taxpayers.

Most companies will not allow you to make any kind of changes at all what so ever to their legal documents. If you don't sign the contract as is, its over. They do not allow you to change a legal document, and if for some reason an employee is not aware and allows you to do so, they would probably be fired. You can't just make the decision to "cross out" anything, and I'll bet their competitors are doing the same exact thing. You simply won't be able to use their goods/services...end of story.

By supporting arbitration, I believe that our justice system has become a for profit institution. Arbitration is very expensive and everyday people cannot afford the cost of arbitration and lawyers and depositions etc, etc. The arbitrator/lawyer network is usually tight knit and there is a lot of "behind the chairs" handshaking going on. The arbitrator has a built in conflict of interest; he is being paid to work on the case, every minute he spends on the case he charges (usually at very high hourly rates -- $400 an hour)- the gravy train ends when the case is over. Appeal is possible but very expensive for a consumer, yet companies can afford to vacate arbitration decisions when they do not like the outcome. I personally have experienced arbitration from corporate, arbitrator and personal perspectives in 2 different forums. I do not believe that it is a just system - the fundamental purposes of these forum organizations is to cover their costs and make money not to provide Constitutional justice. They are corporations that are run like corporations with their arbitrators acting as independent contractors, who play the roles of judge, jury and executioner all in one.

Most people do not comprehend the impact of signing away their right to a jury trial especially at the time of signing a contract that a salesman has schmoozed them into. Even with legal counsel, most people do not the understand the magnitude of the power they have ceded should a dispute ever arise.

I hope Congress does something to help the everyday person.

I have a story to tell about my personal experience and the arbitration system but thus far I have not found a media outlet that is interested in this story. I would appreciate any suggestions for ideas for how to get this out to the media.

I am aware that contracts have these clauses. I also understand that Americans don't always read the fine print and when they do, they don't clearly understand them. It is my belief that since most people don't understand the meaning of Arbitration, simple terminology to the consumer would be the best thing. In that way, they get a clear understanding of exactly what they are signing and have more of a chance to opt out. Most of the language in contracts are more or less law terminology and the average person has a sense of what it is saying but have no understanding as to exactly what the terms mean.

This legislation would restore fairness to the system. Face it, corporations own the current process. They have overwhelmingly got the upper hand; expertise, resources and the corporate "shield" that deflects responsibility and accountability. They also own most of the arbitrators, who are dependent on continued business for their living. Real people are often crushed and ruined by the current process.

Arbitration is not always as binding as some companies would have you think. At a previous job the CEO's wife thought she was a very crafty attorney and placed language in our employment agreement that employment disputes would be handled by binding arbitration. After I left I was not paid a significant amount of accrued bonus monies and contacted an attorney who sued the company. They tried to claim that the arbitration provision prevailed, but my attorney was able to convince the judge in the case that 1) this was an adhesion contract where I had no power to negotiate different terms (i.e. sign it or don't work here) and 2) under California law (where the company was HQ'd) arbitration is not binding where the company's actions perpetrate fraudulent behavior (such as including bonuses as part of the pay package and never paying them even though they were earned). The long and short was that we proceeded with the case and ultimately the company settled for a very tidy sum. The moral of the story is always check with your attorney before giving up.

I will always strike out this clause in the future. shrot stroy is I built a new house last novemeber, in march had a serious problem, knew I had arbitration... asked for the arbitrator over 4 months, never got it, sued in small claims and the court (obviously) threw it out and told them to give me the arbitrator... and now the company filed bancrupcy. arbitration took away my ability to have a neutral (truely neutral) third party (a judge vs a paid arbitrator) decide the case. It was in my eyes a very obvious case, the judge would have been able to determine the result in 5 minutes... oh well... know I know. Hopefully new legislation by Russ Feingold will help consumers.

As a lawyer, I encounter arbitration clauses in contracts such as credit card and employment agreements. Arbitration is solidly embedded in our laws, both state and federal. I bought a new car recently and there is an arbitration clause in that contract. Some arbitration clauses I have seen recently do not have attorney fee shifting provisions, meaning each side bears its own legal costs, if any, rather than "loser pays" the winner's attorney fees which does discourage consumer claims. That's fairer to the consumer. I think businesses are writing arbitration clauses that way now to make them less open to attack from consumer protection interests. In my experience, non-lawyers are no better equipped to handle their own court cases than they are to handle arbitration actions initiated against them. Actually, the arbitration process is better because there are no formal pleadings, rules of procedure, rules of evidence,and the like, all of which are within the special learning of lawyers. All in all, an arbitration provisions without an attorney fee shifting provision is fairer to the average person.

It is pretty obvious that many of these comments are made by representatives of each company trying to lobby against any form of governance over this whole arbitration mess! How can anyone in their right mind think that forced arbitration provides a level playing field for both parties. It is incredible how these coward corporations continue to rape low to middle income citizens with slimy tactics just so their CEO's can give themselves a million dollar pay increase. I have nothing against making a buck from honest business practices but when you go out of your way to make sure you cheat your customer out of their hard earned money is when we have to take a real good look at what needs to be done in order to deter that behavior. Mandatory arbitration is certainly NOT the answer.

I applaud you for bringing up the issue of arbitration clauses. However, this is an issue much more complex than posted here. While arbitration can seem harsh and anti-consumer, it really does have many advantages. Further, many companies are actually reducing their reliance on arbitration clauses recently. For information that is accurate about arbitration, contact the National Association of Arbitrators, a group that is held in much higher esteem than the National Arbitration Forum.

There is an inherent bias built into the arbitration process. Arbitrators know that their only realistic prospect of repeat business is from the companies that use arbitration over and over again, not the consumers for which arbitration is usually a one-time deal. In my view, that is the primary reason that businesses usually prevail in the arbitration forum.

These "mandatory arbitration" robbed the comsumer their rights to challenge "any" unfair act or wrong in a court of law. The 1925 law allowed the 2 parties to come to an alternative dispute resolution that both parties agree to - i.e my lawyer will work it out with your lawyer. But hiding it in the small print - and not allowing a person to opt out of their idea of they picking out who will decide and you not haveing any say in the matter does not full fill the intent of the 1925 law. Most people enter into an agreement not expecting "problems" so it is not even a consideration for those who know about it - even if they had a choice.

Hey Bill? Are you saying I shouldn't choose to have electricity? How about phone service? A car? Heat?

How does one voluntarily enter into an agreement for gas and lights when there is no competing company offering service without the arbitration clause?

Sure, you have a choice, live in a log cabin in the woods and off grid.

Idiot

This is unconstitutional, and as a law student I just don't get it. What happened to due process?

The home builder I used requires binding arbitration. My new home build went fine but my neighbor, who has one of the early homes in the subdivision, found a sagging wall one day. Further inspection found that the builder made grevious mistakes with the construction and materials used. The repair estimates all come in around 25K-30K and the builder will accept none of the fault as the home warranty expired 3 months before the fault was found. The builder accepted the arbitration hearing, but in Wisconsin, the builders arbitration process is purely a joke. The arbitration board is made up of representatives (good-ol-boys) from various builders and they rarely, if ever, find in favor of the homeowner. I pray that I never have to get involved with this. My neighbor is left with a fair portion of his second floor that is unusable/unsafe to walk on, and an unmanageable bill. I was aware of the clause in the contract but trusted the builders supposedly good reputation and the references I spoke with prior to selecting them as a contractor. Maybe this is the only mistake they have ever made, maybe not, but these binding arbitration clauses should be curtailed. I can understand the collections use of them but not when the board you face is bought and paid for by the industry.

This was one of the most one-sided pieces of op-ed clap-trap posing as news that I've ever had the misfortune to come across. I resent that I lost 8 minutes of my life reading it.

The numbers will be skewed as typically it is a small number of companies entering into arbitration. A large collection agency may initiate thousands a year, while other companies not dealing in collection work may initiate only 1 or 2. The numbers need to be looked at from an industry point of view for the data to hold any meaning.

Arbitration is fine with a choice. But to make EMPLOYEES sign one should be illegal. The choice to work or not work is not vaild for 99% of the population. Waiving all my legal rights for a job is a bit like slavery.

With regards to arbitration contracts signed by consumers for cell phone service, health insurance, etc...Today, arbitration not only steals your day in court and but also your day in arbitration. Try suing a large company over an agreement to which you are bound to arbitrate. The litigation in arbitration is as complicated and long as in court. Pre-trial discovery, depositions... everything still goes, except instead of pleading on court paper it is on some arbitration paper. Basically, you still need a lawyer to mount an effective offense, because that's who you'll be up against, defense lawyers billing at $350 an hour. The problem is it becomes harder to get one because once the plaintiff's lawyer is deprived of his biggest threat - his day in court in front of a jury liable to act on passion and sympathy - the lawyer is much less likely to start work with a contingency agreement. That's endgame and the winner is the big guy who wrote the arbitration agreement and the loser is the little guy who had no choice but to sign it.
Plaintiff's lawyers - with mixed success - have been arguing uneforceablity based upon unconscionability. The logic of such an approach has long been that arbitration can deny the plaintiff relief that the court entitles him. A jury is composed of peers that have similar emotions and passions to sympathize with the parties. An arbitrator is a retired judge with a head full of law.

Bill from Portland, you are missing the point that all companies now have it, so a consumer has to go without if they do not agree to the clause. In the 1990's it may have been okay to go without cell phone service for example, but that is just not acceptable in this day and age...along with all the other services that have quickly become like second-tier utilities...consumers need them and they need choices. That is one thing America is about...giving choices...not mandatory agreements biased toward Corporations.

Mandatory arbitration saves honest consumers money. The only ones who should complain about it are trial lawyers and dishonest consumers who hope to get out of paying their bills. It's a shame that MSNBC is just parroting the lies of trial lawyers.

Mandatory arbitration saves honest consumers money. The only ones who should complain about it are trial lawyers and dishonest consumers who hope to get out of paying their bills. It's a shame that MSNBC is just parroting the lies of trial lawyers.

If Public Citizen or MSNBC really thinks that they can offer a low-price cell-phone service or credit card without a mandatory arbitration clause, they should spend their money on giving consumers that choice instead of raising costs for honest consumers just to benefit trial lawyers.

Pro Consumer or Pro Business does not matter here. The point is that americans are FORCED into binding arbitration because there is no other option for buying phone service, cell service, cable, ect. binding arbistration was originaly designed to be a mutual choice, not one that forcebily strips the right for due process away.

While it is true that an arbitrator's decision normally can't be appealed, that often is its advantage.It brings an end to the dispute and gives the aggrieved consumer finallty. Otherwise,the party with the most money can horse you around with appeals and other forms of delay. Also why is a Judge more able to resolve the dispute than an arbitrator selected by the parties?

Why bother crossing out the provisions? In most states, unless the company countersigns, that provision remains in effect and you are stuck with arbitration. The entire consumer system today exists for the benefit of a corporation's profits, with an individual consumer having no rights whatsoever. You can't get utilities, credit or autos, let alone an apartment rental or home purchase, without giving up all your rights. Consumer fairness laws, usury statues prohibiting excessive interest rates on credit cards, etc. are not enforced, because the people charged with enforcing them got to their offices courtesy of the corporations. I've put myself on a five-year plan to liquidate all my belongings, pay off all my bills -- and then get the heck out of this country. Face it folks -- the American dream has been dead for two decades.

Corporate America's wholesale adoption of mandatory & binding arbitration provisions in its consumer contracts has occurred for one reason. Corporations have determined these provisions provide them a distinct advantage. These terms are not there for the five and dime cases. They are there to prevent significant claims from ever seeing the light of day. Do the math (1,000,000 customers ripped off $5.00 = $5M; $50 = $50M; $500 = $500M). No lawyer can afford to represent an individual claim that insignificant. Arbitration that: (1) guarantees confidentiality of the dispute and outcome alike, and (2)precludes group or class prosecution of claims which are otherwise non-economical serve only one party's interest. I'll let you guess which party that is. Although class action litigation has received some bad press (and in several instances deservedly so) it presents the only true means of disgorging corporate ill gotten gains where each individual's claim is modest at best. It seems there are many people who would seemingly prefer to allow such schemes to go unpunished.

One final observation - major corporations have armies of lawyers constantly working on these issues on many fronts. The work product of these corporate lawyers are revealed in the terms of their consumer contracts, lobbying efforts, and support of political candidates. Consumers simply do not have the same advantage.

Credit card and cell phone contracts are not the biggest problem with arbitration agreements in my view. In the San diego area where I live we are seeing them as a requirement before receiving any non-emergency medical services from many doctors and medical groups. Regardless of the trust I may have in a pariticular doctor, I should not have to sign away my legal rights before receiving necessary health care services. My choice now is to sign them or I don't get to see the doctor.

I actually refused to buy a car from a well-known nationwide dealership when the insisted that I sign an arbitration clause. They lied to me, insisting that I was not signing away my right to sue. Any company that insists on such clauses is dishonest and does not deserve my business.

The trial lawyers are pushing a bill in Congress which would abolish these kinds of arbitration agreements as a way to resolve consumer disputes across the board. It includes language that makes almost all existing arbitration agreements unenforceable, essentially cancelling millions of contracts.

Most trial lawyers are, of course, not particularly interested in representing consumers in addressing the kinds of relatively small dollar disputes currently subject to arbitration. That’s why their argument about “due process” is so bogus – if you can’t find a lawyer to take your case, you can’t get into court, whereas many people choose not to use a lawyer at arbitration. And even if you can find a lawyer, most lawsuits never go to a jury. It’s all a smokescreen.

But the trial lawyers are interested in invalidating the prohibition against class action lawsuits found in most existing arbitration agreements, because the ability to easily certify a class action is their bread and butter. And we all know the stories about class action lawsuits, where the trial lawyer make millions and the consumer get coupons. That’s some idea of due process and justice.

More fairness is needed. Arbitration is good, if it is voluntary and balanced. Neither of which is true most of the time (there are some exceptions). Labor arbitrations are very frequent and very balanced and provide an idea on how it can work more fairly.

More fairness is needed. Arbitration is good, if it is voluntary and balanced. Neither of which is true most of the time (there are some exceptions). Labor arbitrations are very frequent and very balanced and provide an idea on how it can work more fairly.

The smart gut from Portland must be a benefactor of this method. He speaks like every person understand the legal clauses in contracts. All the person buying wants is what they are buying most do not care about some clause until it hit they upside the head then they try to figure out what it means and most of the time they need a lawyer. If this was so great for the buyers why did they companies have they high price lawyers write it up. If it was so simple why not write it so the buyer can ubderstand what's going on. If you sign this contract and you want to get out of it we are goiung to send you before our adminstrators and"We are going to make you pay anyway."

Let's face it ..these clauses will never go away ! But the consumer does have a weapon "the point of sale" ..simply insist by lining it out and initialling the line out. YOU MUST get a copy of the entire contract. Insist on a counter signature by the Store Manager on the sales contract, where the store accepts the contract.

Don't waste your time on the small stuff. If you do this on real-estate ( the sales agent will have a hissiy fit) auto's, and other big purchases, say over $2,500. Remeber .."MONEY TALKS" abnd that's how comissions are paid !

Having been through a lengthly arbitration I find that a "third party of the court" is indemnified from any challenges one may have with the "process" not necessarily the outcome. An arbitrator is very protected because our court systems are so overwhelmed and the complexity of trying to vacate an arbitrator is basically forbidden. Arbitration as an option is justified however the right to pursue a fair process should not exclude the arbitrator.

If your local court has a "personal appearance" clerk allowing you to use the court without a lawyer, you can seek a "stay" order of the arbitration once you get the notice that can be served on the creditor and the arbitrator. If you get the stay, it's unlikely the creditor will go further if the amount is small.

These "Final and Binding Arbitration" clauses are blatantly stealing away individual rights protected by the Constitution of the United States of America.

I recently was forced by my employer to sign a "Dialogue Dispute Agreement" where the agreement states that any employment dispute that cannot be resolved via mediation, will go to mandatory, final and binding arbitration. My employer forced me to sign "in order to remain employed". It makes me sick to think I signed my right to be protected by the courts away in order to remain employed. The courts sole purpose is to protect everyone's rights, and now I do not have that protection. I need my job, I got kids to feed.

The availability of arbitration CAN be a boon to individuals in certain circumstances, particular when claims are too small to justify a full-blown court proceeding. But MANDATORY arbitration systems are an outrage designed to benefit those who create them. Here's an example with which I'm all too familiar.

Imagine that after 40 years of hard work and careful saving, you and your wife have enough money put aside to think about retiring. You decide to be smart and ask a stockbroker for advice. The broker advises you to retire since, with his help, you'll have enough money to live comfortably for the rest of your lives. The broker recommends a bunch of investments but doesn’t tell you they’re too risky for retirees, and then, as you're losing money, he keeps telling you to stay the course and that the market will bounce back soon. By the time you lose faith in him and close your account, you’ve lost two-thirds of your money. Now you’re both working again at worse jobs than you had before.

You hire a securities lawyer to sue the broker and the broker’s multi-billion dollar employer, but this lawyer tells you something you find difficult to believe. You can’t file suit in court. You and your wife will have to pursue your case in a proceeding run by FINRA, an organization established by the securities industry to "self-regulate." The arbitration panel hearing your claims will consist of three people, one of whom must be a current or recently retired member of the investment industry. The other two will most likely be lawyers or business persons, and they may well be former stockbrokers or persons who derive some of their income from representing stockbrokers.

These three arbitrators, each of whom might be employed in or in some way connected to the investment industry, will decide whether the broker did something wrong and, if so, the amount you're entitled to recover. Not only that, but these arbitrators know that if they want to keep getting appointed to panels, they can't award an investor anything close to his full losses or award money to investors too often because, if they do, they'll be stricken by broker-dealers whenever their names appear on selection lists in future cases.

Would you be surprised to learn that this is how we do things in the United States? Probably. Most of my clients are flabbergasted when I give them the news.

Can you imagine being wheeled into a courtroom for your medical malpractice trial and learning that one-third of your jury will consist of doctors and the remaining jurors will be nurses, hospital administrators, or pharmaceutical salesmen?

Mandatory Arbitration is an assault on an individuals basic right to have their day in court. No matter if it is an unatainable idea or not,0 it is a right that big business should not be allowed to circumvent with the use of these mandatory arbitration agreements. In an age where corporations have not been truthful with regard to their products or practices and choose to let their products or practices out on the public despite knowing that they don't satisfy minimum requirements at a State or Federal level, mandatory arbitration does not function to protect the public or the worker but makes it cheeper for the businesses to operate. In recent years how many times has the puclic or worker been sold a bill of goods which failed to meet state and federal minimum standards: Mattel, Walmart, Ford, and pharmaceutical companies. Workers alleging non payment of overtime, dangerous products, drugs where the side effects were known but not divulge and various other missteps that corporations make on a daily basis. How many of these situations would come to light if binding arbitration could silence those who have brought these issues into the light. Would corporartions voluntarily correct their mistakes, if past experience is any indicator, I firmly believe that unless it was in their best interest financially or to keep the bad publicity from affecting their bottom line that their would be no need for corporations to do the right thing. Corporations act in their own self interest and manditory arbitration agreements, is a way acting in in their own self interest.

I am the unhappy recipient of binding mandatory arbitration. When my phone was stolen and 4,000 dollars in charges racked up, Cingular invoked their "right". After paying 1500 dollars up front in "filing fees, and being assured by my "liason" that it was an open and shut case in my favor, I recieved a nasty surprise. Even after providing indisputable evidence that I complied with my contractual obligations by reporting the theft within 72 hours, the arbitrators (one dressed in blue jeans and a hawaiian shirt ruled in favor of the company. No explanation was given, andI was ordered to pay the amount in dispute, and additional 2500 dollars for the arbitration panel, and 4000 dollars more for the companies legal fees. I have since lost my house, but I'll go to hell before I pay a dime to those crooked SOB's. To my credit, I knew I was sunk when the panel began exchanging jokes with Cingulars counsel. Really, people, who do you think they are going to rule in favor of? You? right. Maybe if opposing counsel gets stuck in traffic.

I've not read all of the posts, but these statistics are misleading. Most of the cases deal with people who never even show up-mainly because they are in the wrong. Most businesses have to bring these cases to arbitration because people default on the agreements.
We could all pay more when the companies have to go to court, but that doesn't make sense. There was a full report of these statistics that I read somewhere that showed a more equal chance for people who showed up and had a legitimate argument. Congress is just doing what it normally does; scaring people into thinking that it needs to be fixed...you know...fighting for the "little guy" against big bad corporations.

Recently, I opend a new brokerage account which is cleared thru Bear Stearns. Knowing how badly arbitration is stacked against the consumer, I requested that language be added to allow full discovery prior to arbitration (I've been able to get this language into AIA Contracts). My broker was willing to accept the change but we were told by a Bear Stearns attorney that Bear Stearns would not service the account if the language in the arbitration clause was altered. I got the impression that Bear Stearns would not allow any changes in any of the fine print.

Mandatory arbitration clauses aren't designed to take away consumer's rights.....they are designed to keep lawyers out of the process and to avoid class action (which does nothing for the consumer but pays the attorneys very well). I'm used to MSNBC following left-coast party line but taking up an issue that only benefits trial lawyers is low even for them.

If you want to level the playing field, change the bankruptcy laws back to the way they were, forcing the creditors to be more understanding of situations. I understand that the current bankruptcy law is a shield for the creditors. It seems that if one account has gone to arbitration for collection, there are probably others and sometimes there is more at stake than just deadbeats. Remember, in many cases these are the same creditors who brought you "sub-prime" mortgages.

I agree with the article's conclusions regarding the outcome. The arbitration firms know who pays them, they are not stupid. Attornies are allowed to attend arbitration proceedings, and who do you think has more attornies - companies or consumers?

As a non-lawyer arbitrator/mediator (I am a practicing CPA), I review all the facts and circumstances regarding the underlying dispute before rendering any type of decision in the arbitral process. The idea is to streamline the court system and render reasonable and logical decisions. Yes, arbitration is binding, which is the reason why mediation is much more desirable, however, mediation also results in a binding situation. It has been my experience over the past ten years in performing such work that the results have generally been 50/50 as to the claimants versus the respondents outcomes. The one glaring issue that I have noted is why would anyone have a judge or an attorney determine financial outcomes, when they do not know how to add two plus two in general and quite frankly I have wonder where the numbers come from when I see some results.

It would benefit all of America if arbitration was changed. In cases where a company committed gross negligence or misconduct, arbitration should not even come into play. Many employees sign an arbitration agreement when they start a new job or get a bonus. If the company then commits any illegal act, the employee has NO recourse except arbitration....where it has been documented that companies win, and with the small number of actual arbitrators, most of whom would have NO business at all if they ruled for the consumer, employees can be treated with absolutely no respect and will be buried if they try to take on their company.

There are two problems with binding arbitration. 1. The arbitration is agreed to before the dispute even occurs. For instance, you take out a credit card. It says "no fees" and has an arbitration agreement. You agree to this. The company knows that they are about to rip you off and come up with bogus fees. The company also now knows that you cannot take them to court. This leads to the second problem. 2. The decision makers or abitrators are running and operating a for profit company. When the dispute comes in they see a credit card company that they deal with all the time and that pays them a lot of money and refers them a lot of business. On the opposite side is some dude named John Doe that they have never seen and will never see again. This is simple economics. Keep your biggest client happy. And that is exactly what the arbitrators do. It is patently unfair and will never be fair.

the key here, for those of you who seem utterly unable to comprehend it, is choice. understand?

of course you do. you just don't believe in such freedoms. there is nothing wrong with arbitration.
forced arbitration, however, is unconstitutional, and i defy you to prove otherwise. even "dishonest consumers" have rights, regardless of whether some here would prefer to just shoot them.

there are some rights which are unalienable (sound familiar?). these can not be signed away, contract or no.

let's say a person signs a contract which overtly states that they forfeit their freedom for some sum of money, and will henceforth be considered a slave. should said person be held to the contract? is noncompliance, in this instance, an actionable offense?

well they did sign it, right? corporate shill. read your copy of the constitution, if you haven't yet burned it.

Those statistics obviously don't include any securities cases where the customer claimant wins roughly 50% of the time.

Alderman's comment: “If arbitration were in any way beneficial to consumers, it could be made an option and consumers would choose it,” says it all. The reason companies put it in their contracts is to load the deck in their favor. The longterm outcome for arbitration clauses--in housing contracts for instance--is that builders have little incentive to build properly. Shoddy construction runs rampant because a builder knows cosumers have no recourse. The arbitrator may very well be his golfing buddy. If builders spent as much time plugging the holes in their lousy houses as they do plugging the holes in their contracts, my kids wouldn't have been poisoned by mold. Because my son is still in special education as a result of his exposure, paid for by YOUR tax dollars, we all pay for the effects of binding mandatory arbitration.

Feingold just may be the smartest guy in D. C. (not saying much really).

I have never heard anyone ( on the consumer side) say they were satisfied with the arbitration process.

It is a guaranteed scam against the consumer.

So the government is investigating the arbritration process? What about when the government agency overseeing a company is a supporter of arbitration? Does the government plan on investigating itself? I refer to the moving industry where your charges, fees and insurances are government regulated. The clauses in the contract state that in the event of conflict you must submit to arbitration as per federal rules/guidelines. What a scam that is! The government supports something it regulates and if there is a problem with a government regulated company you must arbitrate! We need total legal reform in this country and fast! Our legal system is preying on the little guy and our enemies use our court system to bring us down! Shakespear said it best "kill all the lawyers"!

When my father passed away, my sisters and I went to the offices of the law firm that he had hired to handle his estate.After they read the will and explained things to us, I was handed a piece of paper explaining their terms of payment and outlining their billing procedures. The attorney present gave a very brief explanation of the terms and asked us to sign it, like it was just a formality.
I could tell that he never expected me to actually read the entire document. As I got near the end of the document, I noticed a paragraph regarding arbitration. I asked the attorney to explain what this meant, and he said that it just meant that both parties waive their right to sue the other, and that it would save time if there were any problems. He never mentioned anything about the lack of appeals, but I refused to sign it anyway. When he asked why, I told him that first of all, I could think of plenty of reasons that I may want to sue his firm if they mishandled my father's estate, or withheld information from us. I also pointed out that the arbitrators were most likely people he plays golf with, and I doubted that it would be fair.
He actually laughed, and told me I was the first person to object to it, but that they would cross out that portion of the contract. I feel that businesses always take advantage of the fact that the average consumer does not have a law degree. I also feel that there are far more unscrupulous business owners that there are unscrupulous consumers.

When I bought a new car in Sept 2006, I was presented with a form to sign that said I agreed to binding arbitration. I told the sales person I wouldn't sign it.
The folks involved from the dealer's side went off, debated a bit and came back, and asked again. "it's the best for both of use - you don't want to have to got to court for a dispute, do you?" I said "no - I want to keep my options open!", and started gathering my stuff to leave. They then agreed to note on the form that I refused to sign.

Stand up for your rights with these people. If they won't allow it, take your business elsewhere.

Coming from an HR background I found it abhorrent when I was forced to sign an agreement or loose my job after 6 years with a company. I knew then and know now what lurks out there for employees, With the advent of mandatory arbitration businesses could once again put the blinders on knowing there was no chance of trials by jury. The very real issue is the mandatory elimination of access to our court system.

Binding arbitration is good when both parties enter into it knowingly and willingly. In California and I assume in other states it has now become part of the standard contract. Like going to the Doctors, one has to sign this sheet of paper talking about binding arbitration. Consumer do not seem to have any rights.

If one refuses to sign, one may not get a doctor or other professional. Is it signing under duress. On the other hand with less cases everyone wins -- atleast that is the hope.

As a lawyer in Alabama, I can tell you that nearly every purchase Alabamians make - homes, cars, cell phones, credit of any kind, etc. - involves an arbitration agreement. I try my best to negotiate those provisions out of my contracts but I'm typically unsuccessful. The businesses refuse to accept any altered language at all. My legal practice used to involve representing businesses and trying to enforce these agreements against consumers - and it just made me nauseous. I witnessed numerous consumers lose their homes because they could not sue and recover for faulty workmanship, improper installation, breach of warranties, etc. And once the business/industry realizes that it is protected by an arbitration agreement, they have no incentive to clean up their act. The consumers can't avoid the arbitration agreements and, yet, they can't afford to fight the arbitration system either. In addition to the filing fees to initiate an arbitration proceeding, a party has to pay the expenses for the arbitrators - sometimes up to 3+ people. This may include air fare, hotel rooms, meals, gas and mileage, rental of a facility for the "hearing", etc., for these "fake judges." Don't we already pay taxes to hae these things provided to us in the judicial system? Additionally, it is a huge problem for consumers to find competent legal representation when they are subject to a binding arbitration agreement. Lawyers can't make any money representing consumers in arbitration proceedings because there usually isn't enough recovery for the consumer. So the lawyer is typically forced to charge by the hour but 99% of consumers can't afford to pay a lawyer by the hour. Lawsuits in Ala. have dropped drastically because of the proliferation of arbitration agreements. Appeals in Alabama also are significantly reduced because arbitration agreements are upheld as valid and enforceable nearly 100% of the time. Although I have analyzed the law and do not believe that federal law was ever intended to allow binding arbitration agreements in the consumer context, the federal courts persist in this interpretation of the law. The federal courts refuse to fix this problem -after all, it has cut down on their workload and they are on the bench for life! They don't want their courtrooms overrun with litigation again. So the consumer's rights have been sacrificed under the guise of "tort reform." It is a pitiful situation.

Assuming the statistics accurately reflect the type of cases going to arbitration, I first have to say, "Whew" (as in relief). I have been watching this issue for about a year now and have tried searching the internet for support groups or forums that try to raise awareness. Interestingly there is very little community working to do that. I'm guessing that's because most of the people who lose don't have internet access because they didn't pay the bill! Those statistics speak to that fact. I feel much less worried that some big company is going to sue me for something silly and I'll automatically lose. As long as I keep up my payments, that doesn't seem to be a big concern for me.

However, it really is the principle of it all that does concern me. If these business decide to screw people over for no reason, you have no fighting chance.

I think arbitration is valid for the ~96% of the cases where someone has failed to pay according to the contract. There should be no waste of our tax dollars on that. However, we need to draw the line right there. Let the companies get the money they're rightfully due, but we must retain our rights for the 4% (or whatever) of the time they're wrong and screw over the innocent guy.

I have been a corporate attorney for 30 years. Let me assure everyone on this post (including Bill from Portland) that arbitration clauses are done purely as a way to insulate these companies from paying a dime they owe you. And if you have any trouble believing this entire boatload of hogwash about "frivolous" lawsuits and "tort reform", think about this: under the standard advocated by the Republican machine, Brown v. Board of Education would have been a frivolous lawsuit. It contradicted long standing Supreme Court precedent, and had been denied at the lower court level by a three judge panel. If you need further proof, get Blocking the Courthouse Door: How the Republican Party and its Corporate Allies are taking away your Right to Sue" by Stephanie Mencimer, a journalist formerly with the Washington Post.

Jay, your comments regarding the investment industry's arbitration are a bit over dramatic. There are pure non-industry people on he panels. The majority of industry people who are on the panels do it to protect the integrity of the industry, not to protect a competing firm or broker that is acting inappropriately.

The solution is to go class action with a good consumer class action firm, like Lieff Cabraser in San Francisco for example. I have been involved in Class Actions for close to a decade now, they seem to have the ability to side step many arbitration agreements due to joinder, numerosity, typicality, ect. In fact my Attorney, Mark Thierman used my case Harris et al v Investor's Business Daily et al same causes of action to take on Wall Street brokerages to the tune of $2 billion (See the Oct 1, 2007 Businessweek cover story) Many of those Wall Street Brokerages heavily use arbitration agreements, they just dont seem to waive class action rights.

It’s pretty simple. These rulings have been hidden from the public view for years for one reason, the system was one sided to benefit the companies who forced this system on consumers. I have little doubt these findings reflect the unpublished rulings throughout the United States. People hide stuff typically when they are doing wrong. The average person would look at this system and the rulings and say there is something fundamentally wrong here when the corporations win 95% of the time. If all these numbers reflect the normal judicial process, why hide them from public scrutiny. Support your arguments with the facts you claim to have.

As for voluntary, can you survive without a car, electricity, natural gas, a telephone? If you can’t survive without these items do you really have a choice? The answer is clearly no. I would be willing to bet if more light were shined on the arbitration industry, we would find clear violations of the law regarding the relationship between arbiters and the corporations they represent. Much like the independent auditors that audit public corporations, the independent part lose much of its meaning when you start paying them money and utilizing their services. Hopefully we all remember Enron.

Logical pitfalls in this article:

- 28 arbitrators decide all CA cases. Why is this bad?
How many judges decide matters brought to state court?
- How do we know this 96% figure would be any different if the matters were brought to state court?
- Couldn't a consumer potentially benefit from a "loser pays" system?

Taking away our right to sue for damages means corporations can violate our rights when and if it is profitable to do so. There are many times companies violate the law, particularly in collections and these violations are routinely dismissed in arbitration. Our constitution is erroded to the point where we have little freedom in todays America and fewer rights.

As with many things we encounter today, mandatory arbitration is fine in theory, but in practice it has been corrupted. Of course most arbitrators for certain types of cases NEED the repeat business to remain arbitrators - do you truly believe they will not be biased towards those who put food on their tables? Truly neutral, unbiased arbitrators would go a long way to making the system workable, but such is the realm of fairy tales.

Of course, as others have noted, there are other disincentives to proceeding, mostly "loser pays" and other draconian fees that prevent the consumer from pursuing their cases. But lets not kid ourselves, the reason business prefers mandatory arbitration is not because it is quicker and less costly than court, it is because it is MANDATORY, NOT appealable, and NOT discoverable in a later case.

Administered fairly, there is a place for arbitration, especially in small collection matters. But, when you must sign away your right to sue a surgeon for malpractice prior to having surgery, something doesn't smell right with the process.

Securities Arbitration is the worst of all of these forums and gets the least publicity. It is paid for by the Securities industry. Of a 3 member arbitration panel, one has to be an Industry member, i.e. securities dealer/broker. Of all cases filed by customers, half are dismissed or awarded $0. Of the other half, the average recovery is less than 20% of actual damages. And here's the kicker; arbitration panels sometimes impose "forum fees" as high as $10,000 on consumers. No where in any binding securities arbitration clause does it say anything about that. Yet when a consumer refuses to pay, the industry sends them to collections. Many customers in securities arbitration are retired and elderly people relying on their retirement account and social security for income. I think Dante had a special circle reserved for those that did business this way.

How about a little serious investigation before you write the article. Of the 94% wins for the credit card companies how many were because of default by the card holder? I'm not going to do your work for you but if you get off your click-whore butt and ask the right questions you will find that most, almost all of the 94%, were the result of the card holder not pursuing the case, so the company wins. So then the question becomes did they default because they knew they were in the wrong or they weren't savvy enough to handle the process. Maybe we will get the answer from a real reporter.

Mandatory binding arbitration has become nothing more than a tool used by big companies to avoid jury trials and the fundamentals of fairness employed by our federal and state court systems. As arbitration facilities like AAA have modified their rules and procedures in order to employ fundamentals of fairness - such as reasonable, pre-hearing discovery - arbitration is no longer arbitration. Rather, it is private litigation, ultimately involving a trial to a single arbitrator (no jury), from which there is usually no appeal, and which also ends up being much more expensive and no less time consuming than if the case proceeded through the court system.

Fortunately, in Iowa we have a law that makes an arbitration clause unenforceable if the contract is one of 'Adhesion'. I sued Hamilton College (not the real school in Clinton, NY...the diploma mill cash cow in Iowa owned by the Washington Post (thru their Kaplan cash mill subsidiary) - see http://www.shamilton-cr.com for more about that 'school'). As a pro se litigant (I was my own lawyer, up against their hired goons and legal team) I was able to beat them on this issue right out of the gate, and ultimately won my suit. Mine was a small claims case, filed locally, and even with a judge obviously biased in favor of business over individuals I was still able to cite Iowa code and prevail. Court-required pretrial mediation was unsuccessful as their lawyer didn't feel it necessary to even discuss the issues...she simply wanted me to drop the suit as it was 'obvious there was no way I was going to win'. I can't help but smile when I think just how much crap her colleagues must have given her for not being able to win such a 'slam-dunk' case against a pro se with no law background!

The bottom line is that nothing is fair to the consumer as 99% of the national companies that provide us services (phones, credit cards, utilities, insurance, etc., etc. etc.,) have bought the very political system that makes the laws. So, bend over and smile! The system is stacked against you.

Ladies and gentlemen, this is another clasical example of how our government has betrayed us all, consumers and employees and tax payers. Our government is well aware of all these practices because by law, companies have to inform the government about any such bussiness especially the forced arbitration clause which replaces the due process of law and the government has the right to repel them or accept them. But like I always tell people, when it comes to protecting interests, it seems that the government is always on the side of the coorporate america and itself. Let's remember that the gov. is an entity but it is run by people and this same people have vested interest in the coorporate world. That's how they make their big bucks.

Maybe we need a clause introduced by legislation into all contracts of every sort in our nation that the issues of mandatory arbitration set forth in the contract, if any, expressed or implied, shall be subjected to binding mandatory arbitration on every contract at the time of signature, no exceptions.

And that a course in the meanings and effects and procedures of mandatory arbitration, taught by a competent instructor, shall be required by the United States Government to be offered in every school and taken by every student before the student can legally enter into any contracts, or graduation, whichever comes first.

And finally, within three years, all persons on both sides entering into a contract requiring binding arbitration must be able to show they have passed this course from a legitimate public or private school offering and supplying general education as well. So there can be no complaints that they did not know.

I always thought that every citizen of the United States has the right to a trial by Jury of his peers. That is in the Constitution.
This mandatory approach to litigation via arbitration should be illegal.
You have the right to resolve your litigation via a trial by Jury of your peers.
The injustice that is done to the average citizen is enormous.
Jay D

The Oct 26 11:45:52 AM post has the terrifying ring of truth to it. How can you let one side of an dispute pick the judge they want, whom they funnel business and money to regularly? That's called rigging the decision. This is the simplest way I can state why this is unfair, but the bigger philosophical problem is that the checks and balances of the court system, including impartiality, which are crucial to fairness, are missing. For small disputes, I have no real problem in theory with picking a random arbitrator to decide cases in a timely manner. But who is the arbitrator, and will they be fair? There MUST be some kind of rules, and some oversight - somebody to at least give a cursory glance at an individual case, as well as oversee arbitrators and the system as a whole to make sure, for example, that both sides win occasionally. The cozy relationship between contestants and arbitrators must become arm's length. And, there must be SOME avenue to petition for an appeal, maybe an independent evaluator who will dismiss rote appeals out of hand, but route serious complaints with some merit to a court for review and potentially a trial on a loser-pays basis. This field has exploded over the past decade, and is awash in corporate funds, so the money is there; it is crying out for regulation to mandate a minimum standard of fairness. And, since this is clearly an adjunct to the governmental Judiciary, and serves in theory to relieve the courts of these cases, the government should acknowledge them as an adjunct in need of oversight. Also: Expecting Aunt Millie, wanting one of them new cellar telephones, to understand and negotiate fine print legalese with a corporate behemoth through its minimum-wage salesperson is absurd on its face.

Funny---- all the features that appeal to the consumer are in large, bold print. The less appealing, the smaller the print. Wonder why?? -- DUH !!

I can see why credit card companies want this type of collections practice. If you ever had a $32 late fee, with a 29.85% interest rate, you have to realize that your actually paying 70-80% for a usury fee, on a contract of adheasion that contains unconscionable contract clauses. Then, if they reduce your credit limit, and try to sting you with over the limit charges on top of that, even while you are in default, the usury rates fly to 120% on a $1200 credit line.

These are non-negotiable, boilerplate contracts and are not enforcible in many instances in a Court. Yes, they want binding arbitration. It keeps them out of court where they could lose.

Its no wonder they like to sell these to collection agencies too. The agressive collectors know they will collect on a decent percentage of these defaulted loans, they make money buying them at .07 cents on the dollar.

One thing most of your bloggers are missing is the costs of arbitration. Many corporations put onerous burdens in the consumers to get to arbitration. For example, I ahve seen arbitration clauses that require the consuemr to arbitrate hundreds of miles from his home and the place of contract, in another state, before a retired judge or attorney with at least 20 years of experience, and that the consuemr pay all the costs. Think about that expense. The clause is truly a ruse to prevent the claim from being brought at all.

The repeat customer bias is another issue. The problem with only a limited number of arbitrators is that they learn where their bread is buttered. Some arbitration companies have bene know to "retire" arbitrators who rule in favor of consumers.

How come no one has pointed out that Auto Dealers carved themsolves out an exception to the arbitration laws when they had congress pass a law that saud that manufacturers could not force arbitration clauses into franchise contracts. Why is it ok for a deale to force a clause onto a consumer then?

Most horrific of all is thre arbitration clause in the nursing home context. Let's say your dad had a stroke and was required to be rehabilitated in a nursing home. You sign an agreement for him to be placed in the nursing home where grossly negligent care results in serious damage or death. You want to sue for redress but the arbitration clause prevents it.

I think these two quotes sum it up best: “Representative government and trial by jury are the heart and lungs of liberty. Without them we have no other fortification against being ridden like horses, fleeced like sheep, worked like cattle, and fed and clothed like swine and hounds.”
—John Adams, 1774
"I consider trial by jury as the only anchor ever yet imagined by man, by which government can be held to the principles of its constitution."
-Thomas Jefferson, 1789

Some firms are now offering "opt-out" provisions, though many opt-out windows close 30 days after a contract is signed. Exercise that option when you can. Also, you can send a letter to firms where an arbitration clause is already in force saying you no longer agree to it. The letter may or may not get you out of your contractual agreement, but it may help in a future litigation if you attempt to get the arbitration clause struck.

... What a great way to get out of your cell phone contract without having to incur a penalty! Power to the people.

U.S. Senators and Congressmen:

Due process...protect it! You yourself may need it someday.

Enough said!!!

It is not just on tangible goods. Arbitration clauses are also found for medical services. These mandatory forms are signed yearly. Essentially, what the service providers say are sign this or you go somewhere to be served. Problem is, with certain insurance policies, you do not have very much leeway in choosing other medical providers and almost all of them use the same type of arbitration clauses. What is one to do if you are truly dissatisfied with the medical service?

You can't just cross out the clause in the contract and make it unenforceable!! This contract is not between you and the sales clerk. And I'm sure the sales clerk has no authority to bind the company to any changes you make in the contract. In fact most of these contracts have separate clauses invalidating any changes you make to it.

Take a basic contract law class before you suggest that's an effective way to get out of these arbitration clauses.

I think it's purely and simply a way to take away power from the consumer. Consumer choice is not a powerful enough counterbalance, especially when dealing with companies that have limited competition and behave rather arrogantly (the b