Is Arbitration Fair?

Representing Orlando, Tampa, Miami and Nearby Areas of Florida

You have probably heard about arbitration clauses that big businesses usually slip into their contracts with consumers. For example, cell phone agreements, credit card agreements, and a host of other common consumer contracts routinely have arbitration clauses with “boilerplate” language that forces unwitting consumers to literally give up their right to have any disputes decided by a judge or jury. Instead, arbitration clauses require disputes to be submitted to certain trade groups or professional arbitrators who are often less sympathetic to and empathetic with consumers who are, by definition, novices in the trade or business dispute.

 

More and more, other businesses are sneaking arbitration clauses into their contracts with consumers. Even nursing homes and doctors are now pulling the wool over patients’ eyes and burying arbitration clauses into their patient care agreements. Be careful what you sign when receiving medical care anywhere and, of course, when signing any consumer contract. Why should you be suspicious of arbitration clauses? After all, big business will tell you that resolving disputes by arbitration is cheaper for you and faster.

One reason to be suspect is that big businesses rarely agree to arbitration clauses to resolve their own disputes. Three law school professors from Cornell, New York University, and the University of Michigan recently completed a study finding that big businesses put arbitration clauses in 75% of their consumer agreements, but only 25% of their contracts overall. If these companies believe arbitration is a fair and cost saving process, then why don’t they insist on arbitration clauses when they contract with one another?

Read before you sign. Don’t waive your right to have your case decided by a jury of your peers lightly.