Support The Arbitration Fairness Act

Let’s end mandatory binding arbitration. Companies force consumers to revoke their right to lawsuit by embedding language in terms of use contracts that say in the event of any dispute, both parties have to go to an arbitration firm, which the company pays for… The Christian Science Monitor found that the top 10 most used arbitration firms only found in favor of consumer 1.6% of the time. Is it any wonder they’re so popular?

Urge your elected representatives to support The Arbitration Fairness Act of 2007 (here’s how to look up your Represenatives’ info, and here’s for Senators).

S.1782 “A bill to amend chapter 1 of title 9 of United States Code with respect to arbitration” [THOMAS]
(Photo: Getty)

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  1. E-Bell says:

    Arbitration != mediation, though most “mediation firms” do both.

    Arbitration involves an award (i.e., someone “wins”), and if it’s binding arbitration, the parties are obligated to honor it. Nonbinding arbitration can be useful when a party is evaluating his case.

    Mediation is just negotiating a settlement through an uninterested third party. No one is forced to accept a settlement.

    In any event, arbitration is a cost-effective way to dispose of cases. I agree, however, that an arbitration clause shouldn’t be buried in the boilerplate language of any consumer contract.

  2. asherchang says:

    is that a 2 dollar bill on that guy’s hat?

  3. banned says:

    I’m not sure how I feel. Though I agree people are forced into unwanted clauses in contracts, and have no ability to institute their own clauses, in reality, these companies do need to protect themselves from frivolous lawsuits. I worked for T-Mobile and it was my experience with them that leads me to believe there are few situations where suing a cell company for example, would be just. In two years, I did not deal with 1 customer whom I felt had a right to sue, but they will threaten for almost any reason, which is partly why only 1.6% are successful. Where I live, we don’t have arbitration clauses, because we have frivolous lawsuit laws so they don’t need these clauses.
    I’ve convinced myself. Don’t abolish this law so much as to create frivolous lawsuit laws in place.

  4. banned says:

    btw, it is quite annoying every time I click on main page and it takes me 1/2 way down to the stupid AOL video.

  5. badlydrawnjeff says:

    @rocnrule: At the same time, god forbid someone has to go with the terms that a company sets when you sign a contract.

    Don’t want to waive your right to arbitration? Don’t sign a contract. S’not hard.

    What next? Support legislation forcing these companies to not have multi-year contracts to begin with?

  6. GiselleBeardchen says:

    I wholeheartedly support this Act- but the link provided sure suspiciously looks like a info farming/phishing operation.

  7. ChrisC1234 says:

    @badlydrawnjeff: Sure, saying “Don’t sign a contract” sounds easy, but what that could mean is:
    No cell phone service (ok… maybe those pesky prepaid ones, but that’s a pain)
    Only over the air TV (cable companies and satellite require contracts)
    No car (many car sales contracts have arbitration clauses)
    No credit cards (and possibly no debit cards… I don’t know).

    How long this list goes, I don’t know. But simply saying “Don’t sign a contract” isn’t so easy.

  8. badlydrawnjeff says:

    @ChrisC1234: Right, it’s not easy – thus the point. If you want to live a life of relative convenience, then you sacrifice things that aren’t as consequential for the thing you’re after.

    If people were forced to get cell phones (I went pre-paid, and, for what it’s worth, I don’t consider it a hassle at all), there may be a point in this, but seriously.

  9. fluiddruid says:

    The point is not that companies should not be able to protect themselves. The point is they should not be able to stack the deck completely in their favor. The data shows that they are choosing arbitration firms in order to profit; mandatory arbitration is wholly intended to prevent customers from suing for LEGITIMATE legal causes.

    If mandatory arbitration was only intended for frivolous claims, then the data would not show that arbitration companies side with the company the vast amount of the time. The data would also not show that companies are dropped for finding in the customer’s favor. The facts of the matter show clearly that companies are not interested what is fair or legal, but simply maximizing profits and avoiding legitimate liability.

    Mandatory arbitration is becoming a standard part of contracts. We as consumers need to act in our interest. Corporations should not be forcing consumers into what amounts to kangaroo courts.

  10. Jiminy Christmas says:

    Ralph Nader used to advocate this: The next time you are handed a pre-written contract to sign (lease, purchase agreement, phone contract, whatever) read the whole thing, strike the parts you find disagreeable, give it back to the other party, and ask that you start your negotiations from there.

    Of course, the one person I know of who has actually tried this had the sales manager of a car dealership call the police on them. Anyway, the point of the whole thing is that 99% of the time the typical consumer doesn’t even have the option of negotiating what they sign. The only options granted are take it or leave it. Not exactly equitable, now is it?

  11. cnc1019 says:

    @ChrisC1234: Not all cable companies require contracts. Mine is a month to month with no termination fees. I just turn in the box and modem to the local store when I decide I don’t want it anymore.

  12. badlydrawnjeff says:

    @jrford8: Seems perfectly equitable. You either get the service or not, and they either get your business or not.

  13. djhopscotch says:

    Might to check to see if you representative accepts from emails. I had to go to both sites and then paste the form letter in their email form.

  14. whydidnt says:

    @badlydrawnjeff: I normally agree with this position, but in many of these cases, the companies benefit from a government granted near-monopoly. This means as a consumer I have don’t have the choice of taking my business elsewhere.

    The fact that cable and cell phone cos. benefit from govt. granted access to our homes and airwaves and that access severely limits competition means that Government also has to have right to set “rules” on how they do business and use the publicly granted access.

  15. ARP says:

    I agree with WHYDIDNT- when companies are using public assets (e.g. airwaves) or granted a semi- (or true) monopoly over a certain service, then we there should be stronger consumer protection laws in place. I would like to see this apply to all consumer contracts, but until they can improve frivolous litigation rules and fix the root cause, I think mandatory arbitration clauses are a necessary evil.

  16. zolielo says:

    @jrford8: That is how I go about it. All contracts can be amended at the initial stage if the amendments are mutually agreed upon by both parties in writing, initialed and marked, plus preferably notarized.

  17. mattbrown says:

    the dollar hatted chef will whoop your ass with his flag jean claude van dam style.

  18. Nilt says:

    Of course, the one person I know of who has actually tried this had the sales manager of a car dealership call the police on them.

    If a business calls the police on someone for simply modifying a contract, there’s either more to the story or the person calling the police is an idiot. There’s nothing whatsoever criminal in modifying a contract. It should be standard operating procedure during any negotiations.

  19. Where do you guys get your pictures? They’re excellently chosen.

  20. BugMeNot2 says:

    That’s a picture from the dnc2rnc arrival action. The dnc2rnc was a march from Boston to NY in 2004, marching between political conventions (google it). That picture is from the arrival action in New York.

    Why it was chosen was beyond me, but as someone who was there I find it bizarre – and strangely off-putting – to have stumbled across this picture in an ad!

  21. Trackback says:

    The Arbitration Fairness Act is legislation sponsored by Senator Russ Feingold (D-WI) that would eliminate mandatory binding arbitration in consumer contracts.

  22. goller321 says:

    I was going to contact my Senator to support this, but hey…Russ IS my Senator. Way to go Russ. As for these idiots like BADLYDRAWNJEFF, this whole “free market” crap is exactly that- crap. There needs to be consumer protection because, we as individuals cannot hope to stand up to big corporations alone.