Essay On Mandatory Arbitration

Essay On Mandatory Arbitration

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Mandatory Arbitration Infringes on the Rights of the Consumers

Barbara Kate Repa, a lawyer and journalist, defines arbitration as "... essentially, a
contractual term that is included in a wide variety of agreements between two or more parties. This clause demands that any disputes that arise between these parties out of contracts or transactions be settled through an arbitration proceeding"(1) Arbitration is a form of ADR, Alternative Dispute Resolution, that is an alternaitve to a trial by jury. Instead of a judge deciding in favor of one of the parties during litigation, an arbitrator is able to make a legally binding decision. Arbitration was designed to be more beneficial to both parties over litigation as it's faster, cheaper, has more simplified rules, less risky and offers privacy in regards to dispute resolution. However, the arbitration process often proves to be more beneficial to corporations than to the consumer. There are many ways that the proceedings can tip in favor of the corporation on a large scale and stifle consumer rights as they seek relief from wrongs done against them on behalf of corporations.

Corporations are able to use such things as adhesion contracts, arbitrator biases, confidentiality, bootstrapping, class actions waivers and the binding nature of arbitration to use arbitration to their advantage. This often results in fewer individuals choosing to go forward with arbitration when a dispute arises. Without increased regulation of the arbitration process and rules, corporations can engineer clauses to exploit consumers. According to Honore Johnson, a researcher at Cornell University, corporations often insert arbitration clauses into their contractual agreements in order to increase the odds t...


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...dvantage to corporations and robs consumers of their rights to receive compensation for a wrong done to them by corporations. This can lead to a slippery slope where one day, corporations will not ever be held accountable for their wrongdoings.

Arbitration was designed to be advantagous for consumers and corporations alike. It was supposed to be a way to resolve disputes in a timely manner and be less expensive than litigation. However, arbitration tips heavily in favor of corporation through tactics such as arbitrator bias, bootstrapping, contract adhesion, and class action waivers,. Because the decision of arbitration is permanent, it increases the power that corporation have to gain victories at the expense of the consumer. Mandatory arbitration agreements robs consumers of their rights to recover damages and receive a fair review of any claims they bring forth.

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