Arbitration and Americans' Access to the Court System
Most often, individuals throughout the United States have access to a court of law if they wish to solve a matter of justice. To be sure, those who have sustained injuries in car accidents can seek compensation through civil litigation; as can those who believe their civil rights may have been violated.
But while civil courts are a mainstay of the American justice system, their access has recently been prevented by the power of an entirely separate process: arbitration. Arbitration may not always lead to a fair outcome; in fact, recent news stories have highlighted the often unfair nature of arbitration proceedings, as well as how they may be forced on unsuspecting consumers.
What is Arbitration?
According to the American Arbitration Association, “arbitration is a time-tested, cost-effective alternative to litigation.” To elaborate further, arbitration is “the submission of a dispute to one or more impartial persons for a final and binding decision.” One of the supposed benefits of arbitration is that the process allows for the dispute to be resolved outside of court, which often comes with a significant amount of contention and associated fees. Instead, the opposing parties may present their arguments in front of a third-party arbiter, who has the power to decide the outcome of the case.
How Arbitration is Impeding Americans’ Access to the Court System
On the surface, arbitration may seem like a perfect alternative to litigation. Unfortunately, many consumers are discovering that large-name commercial organizations have begun to utilize the process of arbitration in their favor as a way to circumvent the court system and protect their best interests to the detriment of the interests of consumers or employees. Specifically, this is performed through the use of arbitration clauses buried deep within business contracts for a number of various services.
For example, according to an October 31st, 2015 article in The New York Times, “over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration.” And by agreeing to private arbitration, this then prevents the specific customer from pursuing remedies to any business-related issues through the courts. Arbitration agreements are also frequently a requirement for employees upon hire.
But why is this such a significant issue, especially if arbitration can help save a considerable amount in court costs? For one, binding private arbitration clauses typically preclude customers or employees from joining in class-action lawsuits for claims that affect hundreds or thousands of individuals. In some cases, it may not be cost-ineffective for an attorney to file a lawsuit on behalf of a single individual. A class-action lawsuit, by contrast, would allow an alternative through which numerous individuals suffering similar unlawful conduct can pursue their claims collectively. If a company forces a consumer or an employee to sign an arbitration clause, however, the customer is then forced to forego the chance of participating in a class-action.
And sadly, it seems as though arbitration is not always conducted by a neutral arbiter. According to a November 1st, 2015 post in The New York Times, an examination of thousands of arbitration hearings over the past decade “uncovered many troubling cases,” in at least one of which the arbiter allegedly had connections to one of the parties, an issue that could potentially lead to an appeal in a traditional court of law.
The End of the Class Action Lawsuit?
In theory, any consumer or employee not wishing to agree to an arbitration clause can simply avoid signing any contracts with such language. But because this type of clause is in so many business agreements in the modern era, doing so would be nearly impossible. The company will typically make signing the arbitration agreement an express condition of the transaction or being hired.
Does this mean the foundations of the modern class-action lawsuit are starting to crumble? While the court system in the United States is strong, these actions taken by greedy corporations are certainly posing a threat to the ability of consumers and employees to band together to remedy unlawful corporate activity.
Sources:
Sued Over Old Debt, and Blocked From Suing Back
The Arbitration Epidemic - Mandatory Arbitration Deprives Workers and Consumers of Their Rights
