A recent hearing on Capital Hill...
Mandatory Binding Arbitration Agreements: Are They Fair for Consumers?
Paul Bland, attorney for Public Justice who has argued and won many precedent setting decisions from state and federal courts across this country -including U.S. Courts of Appeal, testified on the pervasive abuses within the current system of binding mandatory arbitration.
Paul has been a long time defender of consumer rights and past Chairman of the National Association of Consumer Advocates. His latest testimony on Capital Hill is a must read for all Americans!
His testimony is eye-opening and goes right to the heart of the many problems neatly tucked away or hidden in the now standard "You can't sue me" clauses contained in credit card agreements, and a wide range of contracts for services and products.
The hearing was to include testimony from three pro-consumer witnesses and one corporate defense lawyer:
Paul Bland, Jordan Fogal, a consumer with an arbitration horror story; David Schwartz, a law professor at the University of Wisconsin, who will be criticizing the Supreme Court's Federal Arbitration Act jurisprudence as inconsistent with the original Congressional intent; and Mark Levin, a partner at the same Philadelphia law firm as mandatory arbitration's architect-in-chief, Alan Kaplinsky.
A few issues raised and expanded on in Paul's testimony:
•Literally millions of Americans have unknowingly received mandatory arbitration clauses in the manner that ensure the clauses would not be read or understood;
•All of the largest credit card companies in the US have binding arbitration clauses. It's very hard to find to get a checking account or most loans without submitting to an "arbitration clause";
•The vast majority of cell phone and telephone companies require customers to accept binding arbitration clauses on a take-it-or-leave-it basis;
•Millions of Americans are required by their employers to submit all claims to binding arbitration;
•Most computer companies now require a consumer to submit to an arbitration clause;
•Mandatory arbitration clauses are now growing rapidly as a requirement for patients to receive necessary medical services;
•Arbitration clauses are in contracts for a wide range of other goods and services including -home sales contracts, insurance companies, rental car companies, Doctors, HMOs-and more;
•Studies have shown that corporations blackball arbitrators who rule in the favor of the consumer;
•Private arbitration companies compete to be selected by corporations as arbitrations work is often very lucrative and the arbitrators know that if they rule against the corporate defendant too frequently or too generously in the eye of the company who hired them, they will lose the work;
•Some Arbitrators' solicit and advertise to potential corporate clients that confirm the dependency of arbitrators upon corporate goodwill;
•Results of Arbitration awards are cloaked in secrecy and "repeat players" remain hidden from public scrutiny.
•To discourage individuals from bringing claims of arbitration often times the clauses include the "loser pays rules" which prey on consumer fears that they could go bankrupt if forced to pay for huge defense fees if they lose their case;
•Promises of fair and inexpensive arbitration are just a myth. The current system is cloaked in secrecy, costly to the consumer and contributes to the growth of continued abuses.
Paul Bland's full testimony can be found here
If you've had a bad binding arbitration experience or want to learn more about BMA and what you can do...visit these sites:
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