The Anti-Justice of Mandatory Arbitration

The Anti-Justice of Mandatory Arbitration

Young Wealth PP TemplateIt?s never too early to start looking out for yourself. You may be green but you don?t have to be dumb also. A good rule of thumb when interacting with the business world is the realization that you?re always on the verge of being ripped off, especially when it comes to contracts. Simply put, read them thoroughly (even the fine print) and never submit to a mandatory arbitration clause.

Mandatory arbitration seemed like a good idea at first glance. Insert an innocent little clause in a contract that requires differences between the signing parties be resolved by an unbiased arbitrator outside of the court system. Unfortunately, now that all the facts are in, we begin to understand that the due process protections guaranteed by the Constitution were put there for a reason, and an ?unbiased? arbitrator is only as fair as the business that hires him allows him to be.

What exactly does the presence of an arbitration clause say? Here are a few things it shouts to us:

1. If the other party in the contract (frequently a gigantic, faceless corporation) violates the terms, forget about having your say in a court of law. You?re going to have to plead your case in

front of a private citizen chosen by the other side.

2. While you don?t have the costs associated with the court system, arbitrators don?t work for free, and you?ll be forced to pony up half the expense.

3. The opposing party in the

dispute gets to pick which dispute resolution company provides the arbitrator. See any chance for stacking the deck there?

4. Forget the combined clout of a class action lawsuit. The mandatory arbitration clause prevents that.

5. The arbitration proceedings will be held in whichever geographical location the other party has inserted into the clause. Local laws apply and you can bet they work in favor of the opposition. Expect it to be far, far away from your home, incurring gas, food, and hotel expenses just to plead your case. Court costs are starting to look better all the time.

Does anyone notice a pattern developing? Mandatory arbitration is a legal tool by which mega-corporations can so thoroughly influence the outcome of a dispute that the poor sap who signs the contract in good faith never really has a chance. Mandatory arbitration means you cannot sue, cannot bring a class action lawsuit, and cannot appeal the decision.

Does this sound like America or a throwback to the rigged Star Chamber system of medieval England? The real beneficiary of mandatory arbitration is a large company with a track record of bad customer service and a tendency to engage in deceptive business practices. When faced with a mandatory arbitration clause (often buried in the infamous fine print), we suggest you find someone else to do business with.

The Young Wealth Team