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How Can Consumers Fight Back Against Forced Arbitration?

Published on Apr 16, 2020 by Thomas Law Offices.

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Arbitration is an alternative method of resolving disputes. Two parties present their sides of a complaint to an arbitrator or panel of arbitrators. The arbitrator’s job is to weigh the facts and arguments of both sides and make a determination.

While there are instances of voluntary arbitration, forced arbitration arises when a company requires a consumer to submit any dispute to binding arbitration as a condition of buying a product. The consumer has to waive their right to sue, participate in a class-action lawsuit, or file an appeal. With this type of dispute resolution, the decision is binding and the results are not made public.

When consumers are dealing with defective or harmful products, forced arbitration can get in the way of recovery and informing others about the potential dangers. That’s why it’s important for consumers to know how to fight back against forced arbitration.

The Problems Forced Arbitration Causes for Consumers

To understand how to beat an arbitration clause, you first have to understand the problems these clauses cause for consumers. In general, the concept benefits companies, not consumers.

Individuals are often unaware they’ve agreed to forced arbitration. Whenever you accept goods, services, or a job, there’s a chance forced arbitration is a condition of the contract. Most people, however, report not having noticed the clause in the terms of agreements they’ve accepted.

If you sign a contract that unknowingly contains a forced arbitration clause, it’s like you’ve locked yourself into only one option in the event a dispute arises. Typically, an arbitration company is listed in the contract and they have to be contacted in the event you want to take legal action.

If you have a dispute and file a claim, the arbitration system is private. This means that it operates without a judge, jury, or a right to an appeal. Arbitrators aren’t required to take the law and legal precedent into account. Because companies pay the arbitrators, it’s more likely they will side with the company. There is no public review of decisions to ensure the matter was handled properly.

In addition to being locked into one form of dispute, consumers are not allowed to sue for negligence, defective products, or scams. In some cases, just by buying a product a consumer can lose their right to hold a company accountable in court.

How to Protect Yourself Against Forced Arbitration

While the federal Forced Arbitration Injustice Repeal (FAIR) Act was passed in 2019, which bans pre-dispute forced arbitration, including provisions that prevent people from joining class actions, it doesn’t protect consumers when the condition comes after purchasing. To avoid dealing with forced arbitration altogether, take the following tips into consideration:

  • Look for arbitration language. Information regarding forced arbitration is usually buried in the company’s terms of use or legal terms and conditions. If you’re looking at a contract online, you can search for the words “arbitration” and “dispute” to learn more about how the company handles those issues.
  • Opt-out when you can. If possible, choose products from companies that don’t use arbitration. For example, if you’re torn between two products similar in quality and price, you can use the presence of arbitration as a tiebreaker. If the company you’re going with does use forced arbitration, find out if you can opt-out. Some companies allow consumers to opt-out, but consumers generally have to do so within 30 days of purchasing and submit their requests using specific language.
  • Submit official complaints. You have the right to submit complaints to the CEO, customer service, and other consumers. While it doesn’t always work, some companies have been prompted in the past to reverse course on arbitration after a significant number of complaints.
  • Negotiating using the legal leverage you have. If you find yourself in the midst of a dispute and you discover you’re bound by an arbitration clause, seek legal guidance as soon as possible. Many companies will try to settle disputes informally before beginning arbitration or defending small claims in court. A lawyer may be able to help you get a settlement offer before legal action even begins.

Contact Thomas Law Offices

If you’ve been harmed by a defective product and are now facing forced arbitration, a lawyer from Thomas Law Offices can help ensure you get the compensation you need to recover. While clauses like that are often legally binding, we have the experience and knowledge to uncover loopholes and get you the best result possible. Contact us today to learn more.

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Meet Our Founder

Tad Thomas - Trial Lawyer

Tad Thomas

Managing Partner

Tad Thomas has dedicated his practice to representing plaintiffs in various types of civil litigation, including personal injury, business litigation, class actions, and multi-district litigation.

After graduating with his law degree in 2000 from Salmon P. Chase College of Law at Northern Kentucky University, Mr. Thomas immediately opened his own private practice and began representing injury victims.

In 2011, Thomas Law Offices was established in Louisville, Kentucky. Over the past decade, Mr. Thomas has expanded his firm and now has offices in three additional locations: Cincinnati, Ohio, Columbia, Missouri, and Chicago, Illinois. He is also a frequent lecturer on topics like trial skills and ethics and technology.

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