I'm not sure why people hate on forced arbitration.
Outside of the occasional ridiculous damages award that happens, it's actually often better for consumers.
It's cheaper, doesn't require a lawyer, company usually pays, etc.
I'm not sure who their "friends" are. The arbitrators i've met in my time tended to be fair, unbiased folks. I'd expect in general civil cases, it's a mess.
The only claims that get preempted by forced arbitration are these small little $1-2 per person claims. But then people complain when lawyers litigate them as class actions, and settle for $1-2.
Researchers at Cornell University studied hundreds of cases where consumer / employees were forced into arbitration and found that the arbitrator ruled with the company 90-95% of the time. This can be attributed to what dccoolgai points out below.
Other Cons of arbitration you can confirm with readings:
- Arbitration can occur in secret, with the public finding out nothing about a company's illegal behavior. This is bad for a number of reasons I won't get into.
- Arbitration does not need to follow the rules of discovery or evidence found in a public court. This is most often in the favor of the company.
- Arbitration clauses mostly forbid banding together as a class. Which means you have to fight your case on your own, often times without a lawyer.
- Arbitration allows companies to get away with wage theft, discrimination, sexual harassment, illegal fees & fines, etc. b/c in arbitration their is no requirement for injunctive relief.
- Arbitration was never designed to be used the way it is used today. The Federal Arbitration Act (FAA) was passed by congress in the 1920s to allow businesses to engage in commerce and use an alternate form of justice (arbitration) they both agreed & negotiated on instead of public courts. Today, the reason arbitration is used in a way other than congress intended is because in consumer and employer relationships - there is NO equal bargaining power. Most arbitration agreements are never negotiated between consumers/employees and the company - its a take it or leave it contract. This is not how the FAA was conceived and not what congress intended.
Put your fork down and think about that for a second... let's say I do some kind of harm to you...you'd be okay with a guy that I paid and picked determining my liability to you over the normal justice system? And if it is so great for consumers, why not let them choose to do that? Why force it on them?
I'm not sure who their "friends" are. The arbitrators i've met in my time tended to be fair, unbiased folks. I'd expect in general civil cases, it's a mess.
The only claims that get preempted by forced arbitration are these small little $1-2 per person claims. But then people complain when lawyers litigate them as class actions, and settle for $1-2.