Binding arbitration can tie up consumers
"This can ratchet the arbitration award up by
thousands of dollars," he says. "And since arbitration
awards are extremely difficult to overturn, the consumer will be
forced to pay that amount."
will you be faced with binding arbitration?
If you have a complaint, it's best to try to resolve the problem
directly, via phone calls and letters. Make sure to keep a log of
all phone calls, e-mails and correspondence between you and the
company that documents your efforts to resolve the issue, as these
will come in handy later.
Before initiating arbitration, speak to an attorney who is familiar
with arbitration clauses to see whether the clause is legally valid
and if there are any grounds to set it aside.
"Wording of arbitration clauses varies and in
some cases, if the clause is very one-sided in terms of favoring
one party over the other, you might be able to get it thrown out
in court," says Geoffrey Gold, an attorney with Rutter, Hobbs
& Davidoff in Los Angeles.
State laws differ on what types of arbitration
clauses are allowed in standard contracts and agreements. State courts and judges
also vary widely in their interpretation and enforcement of arbitration clauses.
In some states, such as California, courts are more inclined to set aside arbitration
clauses. In other states, such as Texas, they are rarely voided even if the contract
containing the clause was fraudulent.
does binding arbitration work?
There are four major arbitration providers:
The fees and rules will vary depending on which arbitration
provider is used, so carefully check the Web site of whatever provider
is named in the contract that you signed. The fees just to file
a case start at $125 and go up from there. If the arbitration provider
is not specified in the contract, ask the company which it will
be. The company gets to decide.
|You can file cases subject to arbitration online:
Generally, fees are due
when you file a case. Depending on which company hears your case, the amount of
money in dispute and the set of rules that your claim will be arbitrated under,
fees can run from several hundred dollars to several thousand dollars.