Mandatory Arbitrations are a Dangerous Attack on American’s Civil Rights

January 13, 2012

Last week’s column from the Group introduced the concept of alternative dispute resolution for civil dispute, discussed the benefits of mediation and the typical process involved in a mediation. This week, we will discuss arbitrations.

Arbitration is a procedure where the parties to a civil dispute present the case to a single individual (or sometimes to an arbitration panel) where the facts, applicable law and decision are determined. The parties present evidence in a manner similar to a traditional jury trial. However, an arbitrator may rule on the admissibility of evidence and consider the evidence in any manner the arbitrator deems. That same person determines what law, or if he wishes, that no established law, is to be applied to the facts of the case to resolve the dispute. The arbitrator then decides how to rule in regard to liability and what if any remedy is to be ordered. The whole process is confidential. Furthermore, the arbitrator does not have to provide an opinion for the decision and the parties to the dispute do not have a right to appeal. One final note on the arbitrator, they are in business to serve as arbitrators. They get their business from large corporations who compel arbitrations by agreements with consumers. If arbitrators want to continue to serve in that role, they need to make sure that the corporations that send them business continue to do so. Without any judicial or legislative oversight, it is easy to make corporations want to continue coming back for return business, at the expense of the individual who was harmed by the company.

Contrast the arbitration process described above with trials. The United States Constitution provides a constitutional right to a jury of one’s peers. That right assures that a litigant will have citizens who reside in their area to use their rational notions of fairness, truth and justice to determine what is right and wrong. The case is heard in a public courtroom where citizens can attend and observe the application of justice. The judge is bound by laws passed by the elected legislature and decisions of higher courts when determining the admissibility of evidence and the law that controls the dispute. To make a decision, the jury has to answer questions to justify the result and they also have to look at the parties in the eye when making its decision. If an error is made during the trial, the parties have a right to appeal to a higher court to make sure the law and procedure was applied correctly.

Our country’s founding fathers and many folks since then have considered the jury trial to be fundamental to our civil rights. Unlike most constitutional rights, the right to a jury trial can be waived by way of written agreement entered into by the parties. Therefore most people are surprised to learn that they have agreed to waive their rights to trial by jury and have instead agreed to binding arbitration when signing agreements (no matter how small) with various companies.

Why? The United States Chamber of Commerce and the gigantic businesses it represents (banks, mortgage companies, tobacco and insurance companies) have pushed for arbitration of disputes that involve them to avoid liability for their wrongdoings. “Agreements” to arbitrate exist with many people’s phone companies, cell phone companies, credit card companies, construction contracts and real estate purchase agreements. Most people are not aware of this fact, until they have a dispute. Then they find out that they have given up their right to a jury trial.

If you are an individual consumer or small business, we recommend that you examine your agreements to see whether or not you are being asked to agree to binding arbitration. If you can avoid it, do so. If you cannot avoid it because the company will not do business without this agreement, then hire an attorney to address an issue if a dispute arises.

This article was written by attorney Glen Van Dyke of the Van Dyke Law Group, which has offices in Truckee, Eldorado Hills, San Francisco and Las Vegas. Van Dyke has represented thousands of residential and commercial property owners and homeowners’ associations in the resolution of disputes. For more information call 877-868-7013.

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