Binding Mandatory Arbitration

Modified on 2009/10/14 21:47 by admin
arbitration image

arbitration image

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The mandatory arbitration clause has become more pervasive in consumer agreements recently.  While many consumers may not realize this, these binding arbitration contracts wrest from average Americans their right to resolve disputes in a court of law.

Many Americans unwittingly sign away their right to a jury trial in all manner of contractual agreements in society today.  Health insurance contracts, credit card agreements, nursing home agreements, cellular phone agreements, car rental contracts – all these types of agreements include binding mandatory arbitration clauses that require consumers to resolve disputes through private mediation with a presumably neutral arbiter.

This is where the problem for the consumer arises: companies which perform arbitration are almost universally in the hands of the big lenders who disfavor the consumer litigant.  Consumers have little to benefit from these mandatory arbitration agreements, which require that any contractual dispute be settled outside the court system.  However, without legitimate recourse to justice through forced arbitration of disputes, consumers generally end up slighted in the long run.

Economic solution?

Most business advocates contend that binding arbitration agreements are in the consumer’s best interest because they speed access to justice.  They allege that arbitration provides an inexpensive forum to resolve consumer disputes without overburdening the conventional court system.      

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