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 Home > Opinion > Story

Published - Tuesday, July 01, 2008

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FROM THE HILL: It’s so important to protect our right to a day in court

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When students learn about our system of justice in civics class, they’re told that every American has a right to his or her day in court. Yet, people from all walks of life often unknowingly sign away their right to a trial when they sign a contract.

This happens to people every day, and in many cases they don’t even realize it, because they agree to something known as “mandatory arbitration” that’s buried deep in a cell phone contract or in an HMO or credit card agreement.

Sometimes consumers only find out they’ve given up their right to trial when a big company forces them to take a dispute to a private arbitration company instead of going through the court system. Arbitration has some serious downsides for consumers, including high administrative fees. It also lacks discovery proceedings and other due process protections, and meaningful judicial review of arbitrators’ decisions.

There’s nothing fair about some of the arbitration proceedings that consumers are forced into. A major arbitration firm actually advertised its services by pointing out how arbitration favors its corporate clients because arbitrations are secret, and consumers or employees have very limited rights to discovery and might even have to pay the costs of the arbitration if they lose.

Arbitration should be a choice, not a mandate. It is only an adequate alternative to the courts in cases when both sides are willing participants. That is why I introduced legislation to prevent Americans from being forced to agree to arbitrate employment, consumer, franchise, or civil rights disputes. This will ensure Americans who participate in arbitration of these kinds of disputes are doing so voluntarily.

In addition to pursuing comprehensive legislation, I am also working on more targeted bills to start giving more and more Americans the choice of whether to enter into arbitration. In agriculture, we have to prevent large purchasers from taking advantage of small farmers by insisting on mandatory arbitration provisions in their contracts.

I authored a bill with Sen. Chuck Grassley, R-Iowa, to prevent mandatory arbitration in agriculture contracts, and I was pleased the measure easily passed the Senate Judiciary Committee. We were also able to include a provision in the Farm Bill to give farmers the option to opt in or out of any mandatory arbitration clause. This measure will help ensure small farmers cannot be taken advantage of by large corporations that purchase their products.

Across every sector of our economy, Americans are being strong-armed into this consumer-unfriendly system. The rule of law means little if the only forum available to those who believe they have been wronged is an alternative, unaccountable system. We must make sure that all Americans can still have their day in court.

Russell Feingold is the junior senator from Wisconsin.
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SAF wrote on Jul 1, 2008 11:28 AM:

" Hallelujuh! We are finally are making some progress in the unfair binding arbitration situation.

We became victimized by a builder who forced us into arbitration following our notification to the builder that we will no longer be pursuing our warranty issues on a new home, here in Midlothian Texas. We lost approximately $25,000 in a real estate transaction.

The unethical policies of some of the arbitration firms should be investigated by a federal government agency.

We are horrified at what these firms are getting away with.

Thank you Senator Feingold for representing the best interest of the American people rather than the special interest of big business, like so many of our politicians. "

NLS wrote on Jun 28, 2008 3:36 PM:

" Thanks for publishing Senator Feingold's op-ed. It is so important that every citizen learn about the pitfalls of predispute binding arbitration since it is in nearly every purchase we make today and every contract we sign. It usually is found near the end of a lengthy agreement, and in fine print. Few who see it understand what they are giving up.

Anyone reading this should warn their families and friends about the importance of protecting our 7th amendment right to trial by jury. Arbitration is usually a secret process that corporate America loves because it keeps their dirty little secrets from the public for years. If a case is filed in court there is a public record that will force harmful products out of the market place. "

Linda E wrote on Jun 27, 2008 4:08 PM:

" Thank you Senator Feingold! I attended the press conference in DC when you and Representative Johnson announced Arbitration Fairness Act, 2007. That was a great day for me. Having been victimized by pre-dispute mandatory binding arbitration within a new home warranty, it is encouraging to see so many fine legislators supporting consumers' rights to the US court system. Too many citizens have been abused by this sham! "

SCH wrote on Jun 27, 2008 3:57 PM:

" The Arbitration Fairness Act is one of the best pieces of legislation to come along in years. It would allow consumers to choose the method of dispute resolution after a dispute arose. Currently, in most purchases, consumers give up that right because they don't understand how damaging arbitration run by the corporations can be. This isn't some extension of the court system; it's a private system that favors the corporation and hides complaints from consumers.

I found out first hand how damaging this could be. In a legal case with a homebuilder I had actual damages exceeding $100,000. Even the other side's experts agreed the builder was at fault. But in a home warranty policy that arrived AFTER closing, there was an arbitration clause. The warranty co knew they could use this clause to deny my claim or only pay part of my damages, and keep me from suing the builder. BUT I found out in time that because I had a govt backed loan, I didn't have to arbitrate with a home warranty company on a new home. (Lawyers take note of this citation: 24 CFR 203.204(g).) So they could not force me into their arbitration where evidence was mounting that the builder/warranty co almost always won no matter what. They could not force me to drop my claim against the builder for damages expressly excluded from the warranty policy. The case settled without having to go to trial, and we recoverd our damages. Had we been forced into arbitration, based on what they were "offering" up to that point, we'd have gotten something between nothing and half our damages. AVOID arbitration clauses. We got lucky about the CFR regulation. Most people either don't have that option or don't find out about it in time. "


The comments above are from readers. In no way do they represent the views of the Coulee News.

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