Arbitration is evil. Mediation is good. Is that clear enough. In arbitration you are putting your legal issues before a person(s) who charge a bunch of money and make a decision which you can not appeal, which may be wrong, and may not even follow the law. While it may be the only time you are before that arbitrator the other side may have been before them several times and as arbitrators can be stricken by a party how would you feel knowing that the decision on your case will be made by someone who knows that your opponent will be back in the future and he may never see you again.
Mediation is a voluntary settlement conference where both parties meet with a neutral person in an attempt to come to an agreement. Neither side can be forced to settle and the mediator does not make a decision which can be forced on you. If you don’t settle the case in mediation, you can continue on to trial and nothing is allowed to be discussed about the mediation, what was said or done. It is as if it never happened. Mediation has about a 85% success rate for settlement.
Who uses arbitration and why would they?
Arbitration provisions are included in contracts (i.e. credit cards, stock and mutual funds, home purchase) generally anywhere you find a large company. We recommend striking the language from the contract and see if they will agree. If they argue it is cheaper and faster (neither true) propose an agreement to a bench trial before a judge. You get a decision, quickly, if wrong it can be appealed and you are already paying for it with your taxes.
I think that pretty much sums it up, I agree that arbitration is too big of a gamble for the average person to take, it only seems to benifit the big companies who use it all the time.
This is a great reminder of what has become accepted on most real estate contracts, without question.
I only wish that were true, Lynn. Unfortunately, too many corporations force unsuspecting employees and consumers into arbitration because they write it into contracts where the consumer/employee has no real choice but to accept (cars, homes, jobs, cell phones, nursing homes, credit cards, banks). Almost anything that you can think of that you need has to be obtained by signing away your seventh amendment right to a trial by jury.
In law school they teach about contracts of adhesion being unenforceable, but these contracts (regardless of the fact that we are forced into them) are somehow upheld as valid.
Take the case of Jamie Leigh Jones v. Halliburton. Jamie was raped by Halliburton employees in Iraq, and Halliburton has appealed to the United States Supreme Court to force her into arbitration.
Unfortunately, these proceedings are often shrouded in secrecy, which only exacerbates the problem. We all agree that it is a huge gamble – particularly when you consider the manner of choosing the arbitrators.
Brent, thanks for blogging on this very important topic.