Binding arbitration can tie up consumers |
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| You can't defer arbitration fees
like you can defer fees in a contingency lawsuit when you have a lawyer who will
get a percentage of the award, should you prevail. Because
arbitration decisions are so difficult to reverse, it's vital to pay attention
to any communication from your creditors. If you do receive a demand invoking
an arbitration clause, you'll at least have a chance to present your side and
head off an automatic judgment against you. You can use the designated arbitrator's
Web site to respond to a claim and read the particular rules that will apply to
your case.
Depending on the amount of your claim, your case
may be decided based on the information you submit with your application. In order
to present as strong of a case as possible, Robert Meade, senior vice president
with the American Arbitration Association, recommends that you submit copies of
receipts, correspondence, photos and canceled checks, as well as an account of
the events involved in the dispute. Even if your dispute will
involve a hearing, it's best to get your arguments and evidence in order as early
as possible in the process and to read the rules to make sure you aren't missing
anything. You'll also want to describe how you'd like the case to be resolved.
For example, if you have a dispute with a builder who won't fix a cracked foundation,
you'll want to get estimates of how much it will cost to fix the problem as well
as any money you've spent to pursue your claim, which can include legal fees. Depending
on which service you use, you pay an extra fee for filing for discovery, motions
or objections. These fees, under commercial rules, which is where you can get
a fuller hearing for larger claims, can add quite a bit of expense to your arbitration
claim and are due immediately. Even if discovery is allowed under arbitration
rules, it can be quite limited. "While it depends on
the rules, in general discovery, rights are limited and not like what you'd get
in court," says Gold. Appeals
Arbitration awards are very difficult to appeal or overturn. "They
are final and binding," says Meade. "Under federal and state laws there
are very limited defined grounds to overturn an award. One of those is if the
arbitrator had a relationship with one of the parties and didn't disclose it or
if you were denied a hearing under certain rules. "It
is very rare that arbitration rulings are overturned and if they are it is because
a court rules that the underlying process itself is unfair." | 
