D&G Law

We’ve All Been Forced into Arbitration

Donaldson & Guin, LLC - securities fraud litigation blogWe’ve all done it – signed an arbitration agreement, that is. Every time you buy a cell phone or a car or any number of consumer products, or just about any time you click on “Agree” to download an app for your phone, buy an e-book, or visit a web page, you have agreed to forgo your day in court and arbitrate your claims if you are cheated. While arbitration began as an alternative method of dispute resolution among commercial equals, such as market savvy corporations with teams of lawyers who negotiate every letter of their agreements, today arbitration is used by large corporations to curtail the legal rights of individual consumers who have no other choice than to agree to arbitration. Many times, we don’t read the fine print and don’t understand the fundamental rights we are giving up. But even if we do read the required terms, they’re just that – required. If we don’t click the “Agree” box or sign the car dealer’s forms, we don’t get the cell phone, iPad or car.

In the wake of the Supreme Court’s decision in AT&T v. Concepion, which limited the rights of individuals to bring employment claims in court, Senators Franken and Blumenthal have introduced the Arbitration Fairness Act (“AFA”) in Congress. The AFA provides that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment dispute, consumer dispute, or civil rights dispute.” Referring to the Supreme Court’s Concepion decision, Senator Franken stated that the AFA “would help rectify the Court’s most recent wrong by restoring consumer rights.” Senator Blumenthal, another proponent of the bill, asserted that the AFA would “restore the long-held rights of consumers to hold corporations accountable for their misdeeds.”

Arbitration is fine for businesses and individuals that have the financial and legal resources to bargain for terms they can accept. But without this new legislation or something like it, consumers have no such ability. Arbitration is expensive and there is virtually no right to appeal an unfair ruling. The ability to take our claims to a court of law, and have our day in court, is a fundamental democratic right that shouldn’t be so easily disposed of.

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