Unhappy customers used to threaten,
"I'll see you in court!"
That won't work any more.
These days, consumers are increasingly forced to resolve disputes via mandatory
binding arbitration. Unfortunately, while many people now are covered by binding
arbitration agreements, most don't know what they are, how they work, when they
come into play or who will be deciding the fate of their complaints.
Businesses love binding arbitration. For them it's
a faster and cheaper way to settle disputes and a great way to generate debt collections.
advocates aren't quite as happy about it.
"I think binding arbitration is bad for a number
of reasons, chiefly because it guts the U.S. Constitution, which
is the one document that makes our country unique," says David
Rumley, an attorney with Wigington Rumley in Corpus Christi, Texas,
who has worked on binding arbitration cases.
"Here, an ordinary person
can take a big corporation to court and get a hearing in front of a jury of his
or her peers. Binding arbitration, by contrast, is 100 percent in favor of big
business and against the consumer."
|Since it's very likely that you have signed up for
at least one product or service that makes you subject to binding arbitration,
you had better learn something about it.|
is binding arbitration?
Mandatory binding arbitration is an agreement
to have a third party weigh the merits of each side of a dispute and render a
decision. That decision is final, and in most cases it can't be appealed, either
to another arbitrator or to a court of law.
You give up your
right to sue when you sign a contract containing a binding arbitration clause
and you expose yourself to fees that can run into the thousands of dollars plus
the cost of a lawyer. You lose many of the protections you would have in a court
The hearing could be in person or via a conference
call. If the hearing is in person, it may be held in another state.
If so, you'll have to pay your own expenses for travel and lodging
while attending the hearing. If you hire a lawyer, you'll be paying
his or her expenses, too.
consumers can represent themselves in arbitration, just as they can represent
themselves in court, it's probably a bad idea, as binding arbitration is usually
a one-shot deal. If you make a procedural mistake or miss a deadline, the arbitrator
may rule in the other party's favor and you will find it very difficult to appeal