7/19/21 – What is Arbitration and Why You Should Always Opt Out

by | Jul 19, 2021 | Consumer Protection

Arbitration is a procedure in which two parties agree to submit a dispute to an arbitrator who makes a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. You, as the consumer, are waiving your Constitutional right to appear in a court of law and to have your dispute heard by a jury. Arbitration is not in the best interest of individuals. It is a method of dispute resolution primarily designed to be used by corporations against other corporations to allow the parties to keep the dispute private.

Let me repeat that, agreeing to arbitration is NOT in your best interest. Large corporations such as mobile phone and credit card companies, TV service providers, car dealerships, hotels, banks, and some service providers will try and sneak binding arbitration agreements into their multi-page contracts.

If you sign a contract with a binding arbitration agreement included, you are forgoing your Constitutional right to a trial by jury. In some instances, the corporation will be able to select where the arbitration is held, and the corporation has a voice in who to hire as the arbitrator. This is not a situation you want to find yourself in. In almost all cases, arbitration is much more expensive than fees paid to a court. Do you think this arbitrator will find in your favor when they are being paid by the other side? The realistic answer is probably not.

Before signing a contract of any kind, read the entire agreement. It’s long, it’s tedious, but it’s a necessary evil. If you find an arbitration clause in said contract, ask the company if you can opt out of that portion of the contract. In some cases, they will agree, and you will keep your Constitutional rights.

If you have an issue arise with a contract you have signed that includes an arbitration clause, you may need to contact a consumer protection lawyer today.