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<xTITLE>Stuck in Arbitration</xTITLE>

Stuck in Arbitration

by Colin Rule
March 2012

Novo Justice Blog by Colin Rule

Colin Rule

AMALIA D. KESSLER, NYT, March 6, 2012

“YOU buy a cellphone, computer or car. You sign up for a credit card or open a retirement account. You apply for a job.

In all these circumstances, you’re told that you must agree to dozens of terms and conditions, set forth in technical verbiage and tiny print. Eager to complete your purchase — or desperate to be hired — you ultimately sign without reading.

If you’re lucky, nothing goes wrong. But a growing number of consumers and job seekers discover, when something does go wrong, that they have unknowingly agreed to waive their right to file a lawsuit. Instead, they must submit to arbitration.

For some, arbitration proves too costly to pursue. Among those who can afford the fees, many learn they cannot enforce their legal rights because arbitration decisions do not need to be based on the law; arbitrators have their own procedures, and some studies have found that they are systematically biased in favor of the companies that hire them. Lawyers are often unwilling to represent arbitration complainants because of award caps in the agreements. And increasingly, these accords bar class-wide arbitrations. Because arbitration decisions are typically not disclosed and not subject to appeal, consumers and workers are left without recourse and must bear the cost of unfair, deceptive and harmful practices.

One 2008 study in the University of Michigan Journal of Law Reform examined employment and consumer contracts used by 21 major corporations and found mandatory arbitration clauses in 93 percent of the employment contracts and 77 percent of the consumer contracts. But Congress has repeatedly failed to step in and fix this system. The proposed Arbitration Fairness Act of 2011 would be a step in the right direction. The legislation would make predispute agreements to arbitrate consumer and employment disputes unenforceable. Similar bills, introduced in 2007 and 2009, both died in committee.

It wasn’t always this way…”

http://www.nytimes.com/2012/03/07/opinion/stuck-in-arbitration.html?_r=1&hp

Biography


Colin Rule is CEO of Mediate.com.  From 2017 to 2020 Colin was Vice President for Online Dispute Resolution at Tyler Technologies. Tyler acquired Modria.com, an ODR provider Colin co-founded, in 2017. From 2003 to 2011 Colin was Director of Online Dispute Resolution for eBay and PayPal.  Colin co-founded Online Resolution, one of the first online dispute resolution (ODR) providers, in 1999 and served as its CEO and President.  Colin worked for several years with the National Institute for Dispute Resolution (now ACR) in Washington, D.C. and the Consensus Building Institute in Cambridge, MA.

Colin is the author of Online Dispute Resolution for Business, published by Jossey-Bass in September 2002, and co-author of The New Handshake: Online Dispute Resolution and the Future of Consumer Protection, published by the ABA in 2017. He received the first Frank Sander Award for Innovation in ADR from the American Bar Association in 2020, and the Mary Parker Follett Award from the Association for Conflict Resolution in 2013. He holds a Master’s degree from Harvard University’s Kennedy School of Government in conflict resolution and technology, a graduate certificate in dispute resolution from UMass-Boston, a B.A. from Haverford College, and he served as a Peace Corps volunteer in Eritrea from 1995-1997.  You can read many of his articles and see some of his talks at colinrule.com/writing.



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