This bill, if passed, would allow consumers and businesses to mutually choose arbitration after a dispute arose–but it makes pre-dispute, binding mandatory arbitration clauses in consumer contracts unenforceable.
If private, industry-run arbitration were truly unbiased, truly cheaper and faster, and were a CHOICE, I believe many consumers would readily choose it…however, it’s not a choice when it’s in the contract for nearly everything we buy or do, (non negotiable usually). And, it’s not unbiased when the industries mandating it do repeat business with the arbitrators. An arbitrator who decides in consumers’ favor is unlikely to be chosen again by a corporation. Consumers have no such knowledge, as the records are private and not available in hardly any cases. (CA requires publication of awards but details are lacking and unlikely to be as useful to a consumer as the information corporations have and share on these issues.)
Undiclosed costs, bias, and cases being sped through questionable arbitration processes before all the damages can be assessed, are not benefits to consumers. They are benefits to corporations.
Many court systems already have non-binding ADR available or even required, such as mediation. Most lawsuits settle before trial.
I think what corporations are afraid of is the public record of the court, and the fact they can’t be assured a victory in the court system as easily as in private arbitration.
Why are corporate special interests fighting so hard to keep arbitration clauses enforceable in contracts? They obviously feel there is a tremendous advantage to them and that it is worth the millions they’re spending to lobby against the ARbitration Fairness Act. That to me, indicates a lot of buried complaints and ripped off consumers are out there, and there will be many more if they defeat this bill.
Cindy is on target, and your position assumes these things can occur in isolation. It would be like offering to play football without pads & helmet while everybody else still does. Only when the little guy and the big guy can fairly present their case for unbiased evaluation with an oversight function, can both sides anticipate justice. Forced, institutionalized arbitration, falls short on all counts.
RE: Fred’s comments: “Good argument about arbitration; but, 1) None of us have to buy the product. 2) Walk the talk — start a company and sell products and services without arbitration!”
If you look at all the paperwork of everything you buy you will likely find a non-negotiable arbitration clause in there for many necessary services and products. They are used so industry-wide in some things that there is no practical alternative to walk away. And, the use of these clauses is spreading, not receding. You also can’t just cross out the clause or assume the court won’t enforce it–those assumptions have proven wrong again and again.
As for starting a business that doesn’t use arbitration clauses, I am not in a career where I could easily start my own business, however as a volunteer for a non profit consumer group, we do not use an arbitration clause in any of our agreements. Any time I have a say in the matter I speak out against use of the clauses in any area of my life. I also use businesses that don’t require it (over those that do) whenever there IS a choice. And, I always try to negotiate terms of any contract so it is fair. I have negotiated the arbitration clause out of a car dealer contract, but given that the economy made it hard for the dealer to sell cars at that time, I had the upper hand then. That’s not always the case.
Last but not least, consumers do need to be better educated about all aspects of contracts, and their legal rights and reponsibilities, including the drawbacks of arbitration. I believe if most consumers knew this we could do away with many consumer problems. However, businesses–who know all this stuff inside and out–are often engaging in deception, and IMO that’s far more wrong and willful than merely being uninformed or lacking training in law, contracts, etc.
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Turn off the air conditioner and let stew. If no one emerges the winner, better yet if no one emerges, solved a lot of problems.
This bill, if passed, would allow consumers and businesses to mutually choose arbitration after a dispute arose–but it makes pre-dispute, binding mandatory arbitration clauses in consumer contracts unenforceable.
If private, industry-run arbitration were truly unbiased, truly cheaper and faster, and were a CHOICE, I believe many consumers would readily choose it…however, it’s not a choice when it’s in the contract for nearly everything we buy or do, (non negotiable usually). And, it’s not unbiased when the industries mandating it do repeat business with the arbitrators. An arbitrator who decides in consumers’ favor is unlikely to be chosen again by a corporation. Consumers have no such knowledge, as the records are private and not available in hardly any cases. (CA requires publication of awards but details are lacking and unlikely to be as useful to a consumer as the information corporations have and share on these issues.)
Undiclosed costs, bias, and cases being sped through questionable arbitration processes before all the damages can be assessed, are not benefits to consumers. They are benefits to corporations.
Many court systems already have non-binding ADR available or even required, such as mediation. Most lawsuits settle before trial.
I think what corporations are afraid of is the public record of the court, and the fact they can’t be assured a victory in the court system as easily as in private arbitration.
Why are corporate special interests fighting so hard to keep arbitration clauses enforceable in contracts? They obviously feel there is a tremendous advantage to them and that it is worth the millions they’re spending to lobby against the ARbitration Fairness Act. That to me, indicates a lot of buried complaints and ripped off consumers are out there, and there will be many more if they defeat this bill.
Good argument about arbitration; but,
1) None of us have to buy the product.
2) Walk the talk — start a company and sell products and services without arbitration!
Cindy is on target, and your position assumes these things can occur in isolation. It would be like offering to play football without pads & helmet while everybody else still does. Only when the little guy and the big guy can fairly present their case for unbiased evaluation with an oversight function, can both sides anticipate justice. Forced, institutionalized arbitration, falls short on all counts.
RE: Fred’s comments: “Good argument about arbitration; but, 1) None of us have to buy the product. 2) Walk the talk — start a company and sell products and services without arbitration!”
If you look at all the paperwork of everything you buy you will likely find a non-negotiable arbitration clause in there for many necessary services and products. They are used so industry-wide in some things that there is no practical alternative to walk away. And, the use of these clauses is spreading, not receding. You also can’t just cross out the clause or assume the court won’t enforce it–those assumptions have proven wrong again and again.
As for starting a business that doesn’t use arbitration clauses, I am not in a career where I could easily start my own business, however as a volunteer for a non profit consumer group, we do not use an arbitration clause in any of our agreements. Any time I have a say in the matter I speak out against use of the clauses in any area of my life. I also use businesses that don’t require it (over those that do) whenever there IS a choice. And, I always try to negotiate terms of any contract so it is fair. I have negotiated the arbitration clause out of a car dealer contract, but given that the economy made it hard for the dealer to sell cars at that time, I had the upper hand then. That’s not always the case.
Last but not least, consumers do need to be better educated about all aspects of contracts, and their legal rights and reponsibilities, including the drawbacks of arbitration. I believe if most consumers knew this we could do away with many consumer problems. However, businesses–who know all this stuff inside and out–are often engaging in deception, and IMO that’s far more wrong and willful than merely being uninformed or lacking training in law, contracts, etc.