Arbitration Requirements Close off Court Access

A groundbreaking three-part series published last week by the New York Times has drawn much-needed attention to a problem threatening almost everyone in America despite the fact that many people are not even aware that it impacts them directly.

As the paper reports in part one of the series: “Over the past few years it has becomes increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration. The same applies to getting a job, renting a car or placing a relative in a nursing home.” As the series goes on to detail, while arbitration may originally have been conceived as a way for businesses to resolve disputes among themselves more quickly and cheaply than by using our courts it has become a more-or-less routine way for corporations to tilt the field in their favor in any dispute with their customers. The newspaper quotes a federal judge in Boston who aptly describes this development as “among the most profound shifts in our legal history… Ominously, business has a good chance of opting out of the legal system altogether and misbehaving without reproach.”

What makes the new realities outlined in the Times so scary is how widespread they have become in the years since 2011 when a Supreme Court ruling opened the way for wider use of arbitration clauses and made filing class action lawsuits more difficult. The system is particularly lopsided because the growing class of professional arbitrators who administer it generally rely on large corporations to bring them repeat business (an arbitrator must be approved by both sides to a dispute, but large companies have far more knowledge of who they are agreeing to, and can make it clear they will not pick a given individual again if he or she rules against the company) – a conflict of interest that the Times examines at length and which strips away even the thin façade of impartiality that surrounds the arbitration process.

The damage to ordinary Americans here in Oregon and elsewhere, however, goes far beyond making it harder to argue with a credit card company over a late fee or with your cable provider over services you didn’t order. As the series outlines many smaller businesses now routinely bury arbitration clauses in paperwork or terms of service for everything from nursing home care or child care to the purchase of services like home cleaning. As a result, if a child is injured through a company’s negligence or a loved one is killed it can be difficult or impossible to file a wrongful death action or, as part three of the series outlines, even to find out what happened in a facility where a loved one died.

As a Portland attorney I have long been aware of the ever-more-common use of arbitration clauses by companies seeking to avoid accountability for their actions. I urge everyone to read the articles linked below and to advocate changes to our laws that would restore Americans’ access to our court system when they are in need of justice.

 

New York Times Arbitration Series:

Part 1

Part 2

Part 3