Why Arbitration is Bad for Consumers

Posted on behalf of Stewart Bell, PLLC on Jun 16, 2016 in Nursing Home Information

attorney Harry F. Bell, Jr.Arbitration is a form of dispute resolution that is not conducted in a courtroom. No judge presides, no jury weighs the issues at hand; it is a third-party or tribunal-based decision that determines the outcome of the dispute. The problem with arbitration is that it is enforced by businesses who benefit from the consumer waiving their right to a trial by jury. The language used within an arbitration clause can be so difficult for the average person to understand that they happily yield one basic Constitutional right without ever realizing it.

Consumers have a particular stake in whether their dispute is resolved by litigation or arbitration, but its not uncommon for the lay person to overlook the repercussions of an arbitration clause, and may not understand its implications. Because of this, consumers often have a skewed opinion of whether arbitration works in their favor or against them.

However, one industry study reveals just how confusing arbitration can be, even to those who've participated in arbitration in the past.

A paper entitled Whimsy Little Contracts with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements found that 57 out of 647 study participants had indeed participated in arbitration in the past, but that these respondents answers to questions that had right or wrong answers were statistically indistinguishable from respondents who had no experience with arbitration. A troubling find when even those who went through the entire process still did not truly understand many of its principles.

Attorney Harry F. Bell, Jr. says that the findings are not surprising, considering his experience with past clients who've faced arbitration.

This just confirms what we see in numerous consumer matters as well in nursing home cases , people are signing documents and have no idea or appreciation to the fact they are signing away their constitutional rights under the VII Amendment, Bell says.

It is horrible and, sadly, continues to encroach upon individual rights at the federal and state levels, such as what we are seeing this session in the West Virginia legislature under the guise of tort reform. This is the real world, every day where real lives are affected, says Bell.

Citizens should not be forced into situations where they must make important decisions based on misinformation and biased guidance. While the average consumer may believe they have the ability to fully understand the ramifications of signing an arbitration clause, the truth is most people are not able to discern which legal terms contained within that clause may serve them poorly in the end.

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