Forced Arbitration Robs Rights of 88-Year Old Beaten Man
Public Justice Director Paul Bland, Jr. recently alerted us to an instance that shows how unfair our nation’s forced arbitration laws are to consumers. When an 88-year-old Missouri man rented a refrigerator, an employee of the renting company robbed him and severely beat him, leaving him to be found three days later. But he can’t go to court, because all his legal rights are bound by forced arbitration. Who would ever expect that signing a consumer agreement about a refrigerator would mean that you’ve lost your rights if someone invades your home and savagely beats you?
What is Arbitration?
Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the courts. The parties to a dispute agree to be bound by the arbitration decision. A third party reviews the evidence and imposes a decision that is legally binding on both sides and enforceable in the courts.
Arbitration can be either voluntary or forced. Forced arbitration can only come from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all existing or future disputes to arbitration, without knowing, specifically, whether any disputes will ever occur.
Why You Should Opt Out of Forced Arbitration
According to The Consumerist, an online offshoot of Consumer Reports, the unfortunate incident described above can be attributed to more and more companies adding forced arbitration clauses to their terms of service.
As a lawyer, I must urge you to read the fine print. Check whether the contract or agreements allows you to opt out of this.
Here are the three reasons why you should opt out of forced arbitration whenever possible.
- Forced arbitration takes away your right to file a complaint in a court of law against a company that’s wronged you.
- Companies want you to arbitrate because the system has been shown to be heavily unbalanced in favor of businesses — who have the legal knowledge, experience, and funding to put up a proper defense — while harmed consumers often enter into the complicated process without legal representation.
- Most arbitration clauses also take away the right of groups of harmed consumers to pool their similar complaints together, forcing each customer into going through a binding arbitration that puts limits on damages; meaning companies can harm large groups of customers but get away with only paying out to those people who are willing to arbitrate.
1. You can still agree to arbitrate, if you would prefer that option.
- You can still agree to settle out of court.
For these reasons, it is our recommendation that consumers opt-out of forced arbitration clauses, whenever possible.