Might The Days Of Mandatory Arbitration Be Done?

It’s no secret that I’m not a fan of mandatory, pre-dispute arbitration. In fact, I’ve probably written on it more than anything else. Now, maybe the griping from me and others has done some good.

A Los Angeles Times story was out earlier in the week detailing the problems with pre-dispute arbitration and noting that there is finally a chance that something may be done to help consumer. The column noted:

Consumer advocates, sensing a shift in the political winds under President Obama, believe the time is right to challenge mandatory arbitration and have banded together to support legislation ending the practice.

We have no problem with arbitration,” said David Arkush of the watchdog group Public Citizen. “We just want people to be able to choose it if they want it, rather than having it be required.”

The article also noted that the public’s acceptance of arbitration might be changing. It noted that when the details of mandatory, pre-dispute arbitration are explained to people, 59% of Americans say they oppose it.

I’m glad to finally see the issue discussed in the popular press and to see that the tide may be turning. While I think there are many cases where arbitration is appropriate, I think consumers deserve the right to fully understand the agreement before signing it; they deserve to know the costs of arbitration, that they may be giving up their rights to conduct discovery, and the pros and cons of arbitration before they’re forced to agree to it. In today’s setting, consumers don’t get that. Businesses get pre-transaction lawyers to explain the arbitration agreements and to draft the agreements for the businesses. But there isn’t any protection or explanation for the consumer.

I think the author summed up my concerns nicely:

Seems to me that if arbitration is indeed fair to everyone, it shouldn’t have to be crammed down consumers’ throats. Arbitration should be offered as a cost-effective and relatively speedy alternative to litigation. But it should be just one option available, just as filing a lawsuit should be an option.

By the same token, no company should be permitted to deny customers their right to a jury trial or to participate in class-action lawsuits.

In a perfect world, such things wouldn’t be necessary.

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