81% Of Americans Hate Mandatory Binding Arbitration

According to science, even the President is more popular than mandatory binding arbitration. A recent poll shows that Americans hate everything about the extrajudicial resolution system, from its inescapable omnipresence, to its unappealable decisions that rob consumers of their day in court. The poll provides a refreshing contrast to a different study commissioned by the U.S. Chamber of Commerce, which found that Americans love mandatory binding arbitration more than pie.

Our favorite polling question takes aim at people who support mandatory binding arbitration, but don’t quite know what they’re supporting:

A majority of those who were initially supportive or unsure of binding arbitration disapprove of arbitration when important information is given about common provisions in consumer contracts. With added information, Americans overwhelmingly disapprove of binding arbitration.

Big shift among binding arbitration supporters. Those who said they approve of, or were not sure about binding arbitration were presented the three following facts:

1. The arbitrator who decides the outcome of the dispute will be selected by the company
2. The consumer may never take legal action against the company over the dispute
3. Binding arbitration applies even in cases where the consumer has been seriously injured by the product or service

When presented with this information, two in three (66%) disapprove of binding arbitration and only one in five (21%) approve. Among those who initially said they were unsure, disapproval is very high (64% disapprove, 6% approve). Disapproval is high even among those who initially approved of arbitration (67% disapprove, 28% approve).

After learning the specifics of contract provisions, Americans overwhelmingly are against binding arbitration. When initial and final disapproval ratings are combined, binding arbitration loses by more than eight to one (81% initial/final disapproval, 10% final approval).

Congress may be unable to do anything about our unpopular President, but 64% of us want them to get off their asses and pass the Arbitration Fairness Act. When they return tomorrow, rested from their holiday break, give ‘em a call and tell them to channel our collective hatred of mandatory binding arbitration into action.

New Poll: Americans Say “No Thanks” To Binding Arbitration [Consumer Law & Policy Blog]
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Comments

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  1. I have never dealt with mandatory binding arbitration. I don’t think I’d mind, if the person doing the arbitrating was qualified. I would suspect that the people who come out of the wrong side are probably not big fans of the process.

  2. bohemian says:

    @Daniel Alderman: The person making the decision is hired by the company that screwed you.

    Dude I have a Ford to sell ya.

  3. DeeJayQueue says:

    @Daniel Alderman: Yeah, but that’s the rub. EVERYONE comes out on the wrong side of that. There is no way to win arbitration. The company gets to pick who the arbiter is, and even if they manage to lose, they’ll appeal and pick a new arbiter who is guaranteed to find in their favor. The odds are so crazy stacked in favor of the company winning those agreements.

    The only time you might stand a chance in arbitration is if you have to go in against a small business like a contractor or something. They don’t have the resources to find and keep arbitration companies in their pockets, so your odds are better that they’ll pick a fair one.

  4. JulesWinnfield says:

    @Daniel Alderman: I would suspect that the people who come out of the wrong side are probably not big fans of the process.

    Those “people” are called consumers!!!

  5. TheRealAbsurdist says:

    @Daniel Alderman: Remember, too, that since the companies hire the arbitrator, if an arbitrator gets a reputation for looking at the facts of the cases impartially and ruling against the companies with any regularity, they’re not going to get hired as arbitrators any more. So there’s a very strong motivation to go along to get along.

  6. FessLove says:

    These are so crooked its sickening. Lets see… do I go with the company who hires me and pays all my bills? Or do I side with the consumer?

  7. shockwaver says:

    It seems like it should be illegal.. you know, conflict of interest and what not. I wonder if you could take a company to court for it.

  8. calvinneal says:

    @Daniel Alderman: Why don’t you just stick to Fox News and stay out of this forum.

  9. Chaosium says:

    “I have never dealt with mandatory binding arbitration. I don’t think I’d mind”

    These two statements are related.

  10. Parting says:

    I prefer Canadian laws to USA’s in this case. “No policy may overrule the law”. Simple and practical.

  11. Parting says:

    @Daniel Alderman: Thats what? Only 90% of consumers? Pretty small number, so who cares?

  12. WolfDemon says:

    I’m pretty sure most people don’t even know what mandatory binding arbitration is

  13. The Big O says:

    @Daniel Alderman: I’m hating on you too, since it’s the cool thing to do on this thread.

  14. AndyMan1 says:

    @shockwaver: I don’t think the arbitration should be illegal. There are probably places where it’s a preferred method for both parties.

    The “mandatory” part of the contract should be. If comcast sets me on fire or snakes jump out of my Verizon phone and into my ear, I should be able to sue them in court.

  15. Tijil says:

    Interesting numbers about mandatory binding arbitration according to ABC News: “The consumer wins four percent of the time. What we found is that the businesses got their win 94-percent of the time.”

  16. Trai_Dep says:

    It’s funny how, with polls, even the most assailable position crushed by the unrelenting weight of Truth, you get a small percentage that still puckers up to perform an unnatural, carnal act on the discredited option.

    Exhibit A:
    Scurrilous details of binding arbitration revealed: 20% still support it.

    Exhibit B:
    George Bush.

  17. DH405 says:

    I should start a company doing contract arbitration. It’d be awesome.

  18. pigeonpenelope says:

    we’ve only heard a small tidbit about this. certainly any right minded person, when presented with those small facts would think that mandatory arbitration was awful. i suggest we all do more independant research before making a rash judgement

  19. pigeonpenelope says:

    @Trai_Dep: It’s funny how, with polls, even the most assailable position crushed by the unrelenting weight of Truth, you get a small percentage that still puckers up to perform an unnatural, carnal act on the discredited option.

    three small facts do not equal the whole truth. perhaps the small percentage that agree are intelligent folks who know a bit more about the situation.

  20. ViperBorg says:

    @Daniel Alderman: Gotta jump on the bandwagon, dude. Mandatory Arbitration sucks.

  21. Jon Mason says:

    @Victo: I agree, and it’s the same back in the UK – “This does not affect your statutory rights.” I wish I could have a lawyer somebody explain how in America, a contract can over-ride the law. How is a contract that basically says “you forfeit all right to sue me for anything” legal? Is it merely for civil matters ie. could you still initiate criminal proceedings? And isn’t a court the place to decide what is and isn’t legal under the scope of the contract, so if say, Clause A completely forbids any court proceedings then how can that also forbid questioning the legality of Clause A in court?

    Extreme example, what if in the course of installing your cable, Comcast burnt your home down? How does a clause in a contract prevent the law applying to them?

  22. redx says:

    its probably the sun but that kid in the picture looks blindingly pale.

  23. shockwaver says:

    @AndyMan1: Oh, I didn’t mean arbitration in general, I meant the forcing people to accept something that is by its very nature against them, and giving them zero recourse. So yes, it’s the mandatory part. As you so aptly put!

  24. BlackFlag55 says:

    Arbitration started out as a response to knujkleheaded overbearing overly-legalistic misuse of jurisprudence, and … like just about everything else that succeeds … it grew like a tumor on steroids into the very thing that was hated in the beginning.

    And its global warming making the kid cry. That, and a two year Democratic Primary.

  25. The arbitration process is suppose to be quicker than a real trial. The arbitrator is suppose follow the same standards of any trial judge in terms of fairness.

    Suppose to be, suppose to follow.

    In instances of a consumer versus a small corporation arbitration may be an ideal situation for a complex legal matter that is bigger than small claims court.

    Abritation against Ford, GM, State Farm et al? Give me a real trial any day of the week.

  26. APFPilot says:

    @calvinneal: what the hell does fox news have to do with anything. Does the Consumerist take on some special anti-republican/ conservative stance over the weekend? I am republican but I think arbitration sucks.

  27. Dobernala says:

    @APFPilot: At least you admit that Faux News isn’t the bastion of fair and balanced reporting that it claims to be.

  28. Mollyg says:

    @masonreloaded: Mandatory arbitration does not apply just to cable, phone and credit cards. It has worked its way into auto sales, banking, mortgages and even employment disputes. A woman who worked for a contractor in Iraq who was raped and imprisoned in a shipping container by her employer is having a tough time suing due to mandatory arbitration in her employment contract.
    Also, anyone who uses Wells Fargo’s online banking has mandatory binding arbitration for all (not just online issues) disputes.

  29. RickBlaineUSA says:

    To really understand whether the mandatory arbitration clause is “good” or “bad” we need to know whether on the aggregate consumers are better off by getting lower priced goods than they would without the clauses. (This is similar to the argument for caps on medical malpractice liability: The tiny number of people with egregious injuries will be greatly harmed by the rule, while everyone else *might* be better off through lower insurance premiums.)

    And I don’t know the answer to that, although I do recall a study regarding arbitration for employee-related claims. It turned out that because the arbitration process was easier to enter into than court, employers were paying out more than they did previously. (With the result, I think, that they got rid of the arbitration provision.)

  30. Skankingmike says:

    you want some crazy news on Arbitration just look into FedEx and all that hoopla about it.

    The company is so crazy about it’s Employee’s signing arbitration contracts that it will go out and fire managers that have them waive it.

  31. Crazytree says:

    everything is cyclical.

    the corporations have pushed the binding arb thing too far, and now the pendelum is going to swing the other way.

    sure the courts love binding arb for their value in terms of judicial economy… but to quote john wayne… THIS IS GETTING TO BE RI-GODDAMN-DICULOUS!

  32. Trai_Dep says:

    @pigeonpenelope: Okay, fine. Ball’s in your court.
    Given this story and the underlying one that it’s based on, what wonderful, equitable consumer benefits does binding arbitration have?
    You can’t simply look at presented facts then (credibly) suggest that “more intelligent folks who better know the situation” are wiser than the 80% who reasonably think binding arbitration (or Shrub) is rotten.
    So… Counter-facts?

  33. Consumer007 says:

    The only arbitration that should be legal is that which finds in favor of the consumer and pays them money damages.

  34. Consumer007 says:

    @Crazytree: I don’t know where you get that stupid pendulum mentality but it doesn’t apply here. The arrival of mandatory contracts done industry wide (across more and more industries, before you know it ALL industries) is not an accident – it is designed by Republicans and corporations to be PIRM UH NINT as George Bush would spell it. You there – no rights – shut up and buy crap as you are told.

  35. wutzu says:

    Companies use arbitration firms when settling disputes between themselves. The difference is, they use arbiters that are mutually agreed-upon, which tends to make for a fairer decision. If consumers could pick the arbiter, most of these shenanigans would go away.

    I think the privatization of law is a marvelous idea.

  36. petermv says:

    I think that by having mutually agreed upon arbitrators would eliminate a lot of the troubles with binding arbitration. After all the concept is good, just the one-sidedness needs to be resolved.

  37. spamaroni says:

    I wrote to all three of my representatives asking them to support the various arbitration fairness acts. The only one to respond (Jon Kyl) explained it like this: “. . . and so arbitration remains a vital tool for consumers and businesses alike, while easing the burden on our legal system.” I re-read that letter about 10 times, and each time it translated to “screw you voter #89463.” Sucktastic.

  38. XiangLubrano says:

    I have read that one way to defend yourself in a consumer contract is to
    simply scratch out the mandatory binding arbitration clause and replace it
    with No Binding Arbitration, then initial it. Enclose your check and hope
    it gets cashed. Once your check is cashed there has been an offer (your
    revised contract) and acceptance of that offer (your check has been cashed).

  39. mac-phisto says:

    @masonreloaded: lots of good questions there. first thing to understand is that criminal law doesn’t apply to corporations in the same way that it applies to people – obviously you can’t throw a non-person in jail (& that is largely the recourse for violating criminal statutes here). also, a person can’t sue a corporation (or another person) for a criminal act – their only recourse is civil court.

    it is legal for clauses in contracts to waive rights, but not to violate laws. if our representatives were to pass legislation that outlawed mandatory binding arbitration & set forth the rules for allowing it in a contract, companies would need to rewrite to comply. unfortunately, the law specifically states the opposite right now – arbitration is considered a viable option for parties to settle disputes outside of the courtroom.

    & a clause could be challenged in court – in fact that is often the first bastion for a company during legal proceedings. they will try to argue that the courtroom is not the right venue for the dispute & a judge must determine if they are correct or not.

    @wutzu: good point, but there’s plenty of bias in the business world also – specifically between smaller companies that act as the “consumers” of a larger companies goods/services. there is a period where a contract can be negotiated, but in my experiences, it goes like this:
    small company: we’d like to strike this clause that indemnifies your company against any/all losses caused by your inability to deliver said product.
    big company’s lawyer team: no.
    small company: ok, we’d like to rewrite it then to add “except in cases where big company’s officers are found to be grossly negligent & company wantonly refuses to deliver product in accordance with their duties.”
    big company’s lawyer team: no.
    small company: what about…
    big company’s lawyer team: no, no, no. *yawn* this is tiresome, are we done yet?
    small company: *realizes this relationship is central to his ability to do business/cues “taps”/signs*

  40. DeafChick says:

    @Daniel Alderman: Really? What about KBR situation when one of the employees was gang raped and the company forced her into arbitration?

  41. Scotus says:

    Congress doing something about it. That’s funny.

    CONGRESS: “Mandatory arbitration is wrong, Big Business, and we’re not going to let you get away with it anymore!”

    BIG BUSINESS: “Sure. Have it your way. But if we can’t arbitrate, we’re going to have to find some other way to make up the money we’ll stand to lose from all those frivolous lawsuits that will inevitably be filed. That means employee layoffs and higher prices for consumers. How will your constituents feel about that?”

    CONGRESS: “Well…okay, then. Just try to be more fair, will you?”

    BIG BUSINESS: “You have our word on it. Say, I like the cut of your jib. Have a campaign contribution.”

  42. Trai_Dep says:

    @Scotus: Well, yeah. But Congresscritters are smart where their livelihood is concerned and, outside of the Red states, they aren’t TOO stupid. They can connect the dots. To whit, they sleep w/ Big Business to get campaign contributions that will deliver them votes.
    If constituents (i.e., vote life support systems) email, call and write – in order of ascending importance – them about a particular issue in an adult fashion, they’ll happily cut out the middleman.
    Dirty little secret: your Congressman really reads (well, tallies) their mail.

  43. Wet_Baloney says:

    @spamaroni:
    you have about as much of a chance of getting an intelligent response from Jon Kyl as you have of getting an impartial ruling from binding arbitration. I hope you didn’t vote for that Bozo!

  44. reiyaku says:

    crap…now i have to read all the fine prints… thats like 4 pages long in legal size papers… booooooooo

  45. You guys are so cool. I stated that I’d never dealt with it. You know, giving my status as uninformed. Providing my opinion as one who had no idea about the process, you know, like most people, I get lots of vitriol. One saint told me to leave the board (not gonna bother to scroll up to find out who).

    How about rational discussion? How about explanations as to why my viewpoint was incorrect? How about dealing with people like they’re people instead of flaming and trolling?

  46. BigElectricCat says:

    @Daniel Alderman: Not to inflate the hate, but if you’re uninformed, then how about soliciting information and opinions from others first?

  47. @BigElectricCat: Yeah…thats kind of what I was doing. This is a forum. It’s not just for stating opinions and talking about how right we are. I have no problem being told that I’m wrong. I have no problem even saying that I’m wrong, as in this case. I learned a lot from the responses that people gave. I just got really annoyed at the negativity. It’s hard to learn through all that nastiness, you know?

  48. WhiteTrashLegend says:

    @APFPilot:

    It’s the OP that has an anti-conservative agenda. He likes to sneak in things about President Bush all the time. I wish there was a way just to not show his posts. I come here to read consumer issues, not to have to read little political attacks.

  49. CSchnack says:

    From what I’ve been told by attorneys and read in cases and law articles, simply scratching out a clause in a contract or making a notation on a check doesn’t make it unenforceable. Both sides have to have negotiated it and signed, in general. There are exceptions but from what I’ve seen the exceptions seem to favor the corporate side, not the consumer side. E.g. warranties on new cars, new houses, new computers, cell phones, medical care, credit card, etc, may not be negotiable in any way. They come with the product or service, period. Somtimes the piece of paper with the arb clause isn’t even seen before purchase. I’ve seen some recent decisons on home warranty arbitration clauses that said it was unenforceable. But it’s still really hard to get out of it.

    Consumers have to be willing AND ABLE to refuse to make a deal unless the seller waives the arbitration agreement. You can still be forced into it against all protestations, if it’s a product or service you MUST have, and if there is no alternative in the market to choose from, and no negotiation possible. Always try to get the clause stricken but do not assume you can. The Arbitration Fairness Act would make such clauses unenforceable, and still allow people to choose to arbitrate after a dispute arose, if both sides wanted to. That’s fair. Forcing consumers is not. That’s why this bill needs to be passed.

    That said, I hope that efforts to educate consumers on arbitration will follow. If they’re coerced into thinking arbitration is going to be ‘fair, fast, and cheap,’ after a dispute arises, the end result will be much the same as if they were forced due to a clause in a contract. However, I do think word will get around to “not pick arbitration” if this is the case.

  50. Orv says:

    @wutzu: I think privatization of law is inherently flawed. A private arbitrator will always favor whoever is paying the bill.

  51. FLConsumer says:

    I call bullshit. I doubt 81% of Americans even know what arbitration is.

  52. etc says:

    @FLConsumer: I concur.

    Not to mention this statistic is patently ridiculous. What an asinine referendum.

    I bet if I went around and asked how many people hate taxes, we would get like responses. Maybe we should ask how many people hate bills? How many people hate having to pay for their own food?

    I hate mandatory arbitration as much as the next person, but stop wasting my screen space with this useless garbage.

    However, I’m more miffed at the waste of resources that this study entailed.

  53. Crazytree says:

    @Consumer007: I suggest you educate yourself on the matter before you make yourself look any less informed.

    the pendelum has already begun to swing… I have seen it first hand as a consumer attorney whose firm does a lot of ADR.

    [www.broadbandreports.com]

  54. Consumer007 says:

    Your misspellings really make you look informed. But go ahead, list an industry where arbitrations are on the decline…how about specific examples, counselor? Otherwise, my objection is sustained…approach.

  55. mythago says:

    Always try to get the clause stricken but do not assume you can.

    With big evil corporations (e.g. when you sign up for a cellphone), there’s not a lot you can do to change the ‘adhesion contract’. With lesser entities, I’ve found that most businesses don’t even look at the multi-page contract other than to see you’ve signed it. There have been plenty of times when I’ve gone through and prominently crossed out, then initialed, portions of a contract before I signed it. I’ve never been told “Oh, sorry, but we won’t agree to this unless you agree to those clauses.”