Britcher Leone Blog

Corporations Hide Forced Arbitration and Other Clauses

| Jul 8, 2021 | Catastrophic Injuries, Premises Liability |

Despite the 7th Amendment of the United States Constitution providing us all with a right to a trial by a jury of our peers, corporate America never ceases to try and find hidden ways to take away your rights. Hidden in documents generally presented after you have arrived at the gym to sign up, bring your kid to a birthday party at a trampoline park, or arrived to rent a jet ski or other pleasure equipment frequently the unscrupulous businesses include provisions to waive or limit liability for their negligence, force claims into arbitration, apply laws of other states, require suits be brought in another state or eliminate your right to be a part of a class action. In many instances, they are presented as part of a digital screen document that you must scroll through to try to read and cannot alter/negotiate.

What does this mean for you? It means that if you or your child are injured while riding the jet ski or jumping in the bouncy pit, they are trying to strip you of your rights and force you to use arbitration and stack the deck in their favor This method of resolution greatly favors businesses. They dictate who the arbitrators can be and pick people they know are likely to side with them. Consumers win less than 5% of the time in private arbitration and are obligated to pay for a system that otherwise is paid for by your tax dollars. In short, it is a sham.

Why do businesses include this clause?

Because they care about profits over people. They are trying to make more money by depriving you of your rights. Businesses claim arbitration is a more streamlined format that is less expensive than going to court. The reality is that it is not and can often eat up any winnings a consumer would receive. In addition, arbitration settlements are also typically private and not disclosed to the public. Court records, unless they are sealed, are a matter of public record so businesses may want to use arbitration to keep the nature of the damages and the amount of the settlement private – this helps them hide their negligence and try to deflate the amount of future settlements in other cases.

How does it work?

While the structure varies, arbitration typically involves the two sides following a varied but predetermined set of rules to settle a dispute, dictated by an organization that regularly does business with the corporation. The hearing will be similar to a court hearing where each presents arguments and evidence to an arbitrator or a panel of arbitrators selected often by the company alone or from a panel they know finds in their favor.

Advantage goes to the defendant

Corporate America tries to paint arbitration as fair and reasonable on its face, but the reality is that it is all about corporate greed. On the other hand, the judge in a court of law is neither picked by the parties nor paid for their services. While the two sides may negotiate on who arbitrates the dispute, often the arbitrator is sympathetic to the defendant because they may consciously or unconsciously worry about being not selected as the arbitrator the next time the business arbitrates. This is simply unfair.

People deserve fair settlements

For this reason and others, the Forced Arbitration Injustice Repeal Act (the FAIR Act) bill focuses on re-establishing Americans’ 7th Amendment right to seek justice and accountability through the court system. Businesses use forced arbitration for a reason. Unfortunately, it boils down to making it more difficult for the seriously injured to seek fair and equitable compensation for lost wages, medical expenses not covered by insurance, physical and mental pain and suffering, and related expenses caused by the injuries. Until the time comes that this bill is passed and signed into law you can best protect yourself by refusing to sign the documents in an electronic format, marking our provisions that are unfair, and even offering to negotiate the contract to pay more to not have the provisions and, if refused, note after your signature that this was a “contract of adhesion.” Better still, take your business somewhere else!