The Dreaded Arbitration Clause- A Brief Explanation

Many of my consumer cases hinge on the dreaded arbitration clause.  Businesses often bury arbitration clauses in fine print, in difficult to understand language, and the business rarely advises a person they can opt out of the arbitration clause.   With that said,  you are probably wondering, what is the big deal with arbitration clauses?   

The big deal:  Arbitration Clauses strip you of your right to a jury of your peers.  Here in Oregon the vast majority of arbitrators are white males who have been practicing law for decades and decades.  Many of the arbitrators do their best to see things from both sides, but they typically are pretty hard on consumers that have signed things like "As-Is" disclosures or other agreements.  They do this because they are seeing things through the eyes of a lawyer and not a typical consumer who might be on the Jury.   Consumers see things from a real world perspective and understand why a consumer may act in a particular manner.  

Another big issue is cost, many times the consumer has to pay the arbitrator thousands of dollars to hear the case.   It doesn't make sense for a consumer to pay the arbitrator $3,000.00 to preside over a dispute over $5,000.00.  Additionally, Arbitration Clauses are often coupled with Attorney Fee clauses that could make the consumer liable for the businesses attorney fees if they lose.  This can be tens of thousands of dollars. 

Consumers are also crippled by arbitration rules of procedure.  Many arbitration services tout themselves as efficient.  What this means is the rules make it difficult for the parties to gather information from each other and third parties.  This typically always hurts the consumer, because the business has all of the records regarding the product and the sale.   In a products liability case or Nursing Home case that requires arbitration the injured person will have little documentary evidence, but the Nursing Home or product manufacturer will likely have documents that support the injured persons case.   

What to do:  First try and locate the arbitration clause.  This could turn into a full time job for some folks, because many expensive products and credit cards usually are accompanied by a arbitration clause. Sometimes they are buried in the Warranty paperwork or Instructions.  If possible opt out of the arbitration clause.  Also, you can draw a line through an arbitration clause.  Most businesses don't know what to do if that is the case.  If it is an on-line agreement your options are limited, but they may be there. 

If you want more information and a recent example, check out CBS's story on Arbitration Clauses and how Samsung is using it to deprive an injured person of compensation for injuries Samsung caused. 

If you have any questions about an arbitration clause call me at 503.224.1658 to discuss your options.  Please remember Ross Law's post is not legal advice and is for informational purposes only.   Also, remember the law is always changing so who knows if Arbitration clauses may be in vogue in the future.