BINDING ARBITRATION: DO YOU REALLY WANT TO GIVE AWAY YOUR CONSTITUTIONAL RIGHT TO A JURY TRIAL?

Quite often our clients learn the hard way that they “agreed” to give away some of their basic legal rights, including a trial by jury, when they purchased a new vehicle or telecommunications service, or other products and services. The sales contract or “agreement” had buried within it – most often on a subsequent page in fine print – legal language to the effect that the consumer agrees to “arbitration” in place of having their case heard in a court of law should their new car prove defective or their internet service doesn’t work or they are being ripped off on the billing, etc.

Usually, when we ask clients if they agreed to arbitration they respond with, “What’s that?” or words to that effect. Arbitration is defined by the American Bar Association as “a private process where disputing parties agree that one or several individuals can make a decision about the dispute after receiving evidence and hearing arguments.” (https://www.americanbar.org/groups /dispute_resolution/resources/DisputeResolutionProcesses/arbitration/) When an arbitration is binding the arbitrator’s decision is final, so the arbitrator in effect is given the right to play judge and jury in determining the merits of your case and rendering a verdict.

Is it the client’s fault that he agreed to binding arbitration? No, for numerous reasons. First, the individual was not a lawyer and had no idea what arbitration was. Second, our client didn’t bring a magnifying glass so he/she could read the fine print on the third or eighth or thirteenth page of the legal-length contract replete with legal terminology.  Third, the consumer also forgot to bring a big legal dictionary along so all those loaded words and phrases could be looked up. Fourth, he/she didn’t have an attorney specializing in contracts present to advise them against agreeing to the arbitration clause. Fifth, the salesperson did not bother to explain to the consumer the arbitration part and see if they had any questions, even though that same salesperson will later testify under oath that they did explain everything. Sixth, if the consumer understood and refused to agree with the arbitration clause, in some cases the seller would simply refuse to sell the consumer the product or service. We could keep going but you get the idea.

But not all is lost if you get tricked into arbitration. Despite its many pitfalls and basic unfairness, we still fight hard and manage in many cases to get a good result for our clients.

Arbitration is a political issue as well.  When voting in any election, look into whether the candidate supports or opposes binding arbitration agreements.

To be clear, if one of my clients wants to have arbitration, I’m fine with it, and some clients do.  But some clients want their cases decided by a jury, and the threat of a jury trial often persuades big corporations to settle disputes rather than fight them to the bitter end.  There are advantages to having access to a jury trial, and consumers-citizens-voters must never lose sight of this.

I hope this short article has been helpful to you.  Thank you for reading.

Copyright © 2019 by Robert F. Brennan, Esq.  All rights reserved.

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