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Billy Cunningham
Billy Cunningham
Attorney • (800) 574-4332

Arbitration For Consumers Needs More Protection

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Additional appellate remedies should be available to consumers who have been subjected to arbitration and are left with an award against them. The Federal Arbitration Act and a recent ruling by the Supreme Court appear to limit the remedies to four:

  • (1) Fraud, corruption, or undue means
  • (2) Evident partiality or corruption of the arbitrator(s)
  • (3) Refusing to postpone the hearing or failure to hear evidence or other misbehavior
  • (4) Arbitrators exceeded their power or so imperfectly executed them that a mutual, final and definite ward on the matter submitted to them was not made.

Lawyers need to look for other ways to set aside these awards in cases where the consumer is short changed by the arbotratiopn system. Are there violations of the consumers right to the courts? Did the consumer really intelligently enter into the arbitration agreement? Was it a contract of adhesion? Did the process violate a state or federal statute? Violate public policy? Or fail to address the real issue presented? Can we focus the courts away from saying “consumer, you entered into this agreement to arbitrate so live with it.” Let’s face it when arbitration started it was by agreement of two equal bargaining parties who probably knew the arbitrator(s) and saw a way to expeditiously resolve a simple dispute. That is not what we are dealing with when it comes to consumers.

Over the past decade it has crept into almost every contract you sign. Why are we allowing this? Why don’t we as consumers stand up and say NO? All arbitration agreements in the consumer context are drafted by one party- the business entity. You the consumer have no say in what is put those agreements. Most of the time we do not even realize the contract to purchase that sound system contains a provision requiring arbitration.

A party to a trial does not get to pick the judge, write the rules, limit the evidence, or charge you for the time you appear in front of him or her. There may be filing fees which even in the most complicated cases are a few hundred dollars. If you decide to commence an arbitration complaint, the filing fees are often several thousand dollars and if you lose guess who pays the arbitrator for telling you that you lost? You do!! Judges are paid by the tax payers. We set up a court system to allow citizens to appear and have their grievances heard in a system that is paid for by all. Why do we need business and industries picking the arbitrators and then charging you? Most importantly, judges are not dependent on one side for future business like most arbitrators are.

These clauses are the single biggest threat to consumer rights in recent years, a de-facto rewrite of the Constitution that undermines a broad range of consumer protections painstakingly built into law. No other consumer issue hits so many Americans where they live every day. We are becoming numb to them. There is a reason practically every state’s constitution has language like Alabama’s Article I Sec 13: “That all courts shall be open; and that every person, for any injury done him, in his lands, goods, person, or reputation, shall have a remedy by due process of law; and right and justice shall be administered without sale, denial, or delay.”

However when you sign that arbitration agreement to buy a car, when you put a family member in the nursing home, get that new sound system or sign up with a credit card company, you are saying I give up these rights. Don’t do it- take time and go to somebody else. They do not exist without you.