The Arbitration Fairness Act, which will ban binding mandatory arbitration clauses from consumer, employment, and franchise contracts, was reintroduced in the House yesterday.

Rep. Hank Johnson, the original sponsor of the bill, was joined by 36 other House members and will likely get more support in the coming months.

Arbitration is a form of alternative dispute resolution where, instead of going to court, parties agree to make their case to an arbitrator, using fewer rules and a simpler procedure than typically found in litigation. The arbitrator’s decision is usually binding on the parties.

Binding mandatory arbitration is the same as the above, except consumers are required to use arbitration (and forbidden from going to court) as part of doing business with the company. Most consumer contracts for credit cards, cars, homes, utilities, insurance, and even employment have clauses requiring binding arbitration, and preventing a consumer from suing if the company hurts him or her. The arbitrators are usually biased towards the company, which picks which arbitrator to use-and often pays the arbitrator’s fees (unlike courts, which are funded by taxpayers).

Why do we support the Arbitration Fairness Act? In short, because mandatory binding arbitration is patently unfair to consumers. It is a joke of justice; a fake tribunal where injured consumers will almost always lose to corporations at the hands of a biased arbitrator.

For more information, check out our posts on arbitration, or our recent choose your own adventure through the arbitration process.

(Photos: spi516, navets, and superbomba)

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