Earlier this month we explained some of the benefits of arbitration in Part I of this blog. In Part II we will detail the cons.
Arbitration is a form of Alternative Dispute Resolution that allows the parties involved in a dispute to avoid litigation. It is often sought, or even required, by businesses when they’re facing legal action. Some of the benefits mentioned in Part I of this blog include cost effectiveness, timeliness, and flexibility, but there are drawbacks as well.
Con #1 – Binding decisions
While in some circumstances this could be considered a positive, since a decision in your favor cannot be overturned, the binding nature of arbitration decisions means you have little to no recourse available if things do not work in your favor. Arbitrator decisions are not always perfect or fair and, if that is the case, you won’t have an opportunity to raise the issue in court or seek an appeal of the decision.
Con #2 – Tilt against consumer
Without very strong legal representation, the scales of arbitration are often tipped in favor of large corporations and other businesses since they typically have more money and power available to them. They often force consumers to sign agreements that force them to enter into arbitration for any legal matters, all the while knowing that they will likely be able to resolve any issues quickly and without major repercussions for their actions. They may even require that the arbitrator be selected from a predetermined pool of possible candidates, which can lead to the selection of an arbitrator who is biased in favor of the company.
Con #3 – Privacy
If you’ve read Part I of our blog, you already know we mentioned this as an arbitration pro. However, it can also entail a lack of transparency. Lawsuits seeking to correct illicit or immoral actions by companies against consumers is not only about getting you justice and fair compensation, but also about bringing attention to the company’s practices in order to force them to change. Since arbitration is private, and breaking that confidentiality could result in you yourself being sued by the company, there will likely not be a chance to try the company’s actions in the court of public opinion so as to inform other consumers.
Arbitration can be a double-edged sword, with many positives but also potential pitfalls. Bell Law is dedicated to protecting consumer rights in arbitration throughout metropolitan Kansas City. We are your resource for arbitration in such organizations as JAMS (Judicial Arbitration and Mediation Services, Inc.) and AAA (American Arbitration Association). Please contact us to discuss your consumer law case, and let us help you decide if arbitration is right for you. Or, if you are being forced to use arbitration owing to an agreement you signed, let us help ensure that you’re not bulldozed by the might and arbitration experience of large companies.
For more information about the positive aspects of arbitration, please check out Part I of this blog by clicking here.