Still more on arbitration provisions

We have previously reported to you about the potential dangers of "arbitration" provisions in what can generally be referred to as "consumer contracts" (i.e. contracts that involve the consuming general public like auto repairs, home-improvement, retail purchases, health care and nursing home services). Arbitration provisions have historically been found in many "commercial" contracts where the parties are mainly sophisticated business persons. However, in recent years, many companies which provide consumer services have placed arbitration provisions in their standard contracts in order to bar a consumer's right to bring a lawsuit for a breach of the contract - and even for personal injuries incurred by the negligence of those companies. These provisions essentially take the law out of the dispute and instead replace the law with the attitudes, opinion and sometime the biases of the arbitrators. Further, arbitrators charge huge fees for their "private" services while courts and judges provide all of their services for almost no charge at all other than a nominal filing fee.

Recent efforts in Congress have been aimed at barring arbitration provisions in all consumer contracts. For instance, if the negligence of an automaker or nursing home kills someone, any provision in contacts covering that relationship which mandate arbitration only for ANY dispute (including but not limited to personal injury claims) will be illegal. In fact, there is push in Congress to pass the Arbitration Fairness Act of 2009 this year. The act would ban mandatory arbitration in all consumer and employment disputes. Stay tuned for this development, and - again- review all of the contacts that you sign to see if there are any arbitration provisions buried in the small print.