Mandatory Arbitration Clauses:
Undermining the Rights of Consumers, Employees, and Small Businesses
How Individuals Are Disadvantaged by Arbitration:
And then there is this:
On Corporate Influence: An unbalanced justice
These are among the most serious shortcomings of the arbitration system:
- Lawless process: Arbitrators do not have to be lawyers, follow the law or even justify their decisions -- which, unlike court verdicts, are not open to public inspection. The absence of rules are especially disturbing in view of the next three items . . .
- Conflicts of interest: The arbitration system allows conflicts that would not be permitted by the court system. The American Arbitration Association invests in major corporations whose legal disputes the firm's arbitrators hear; companies are allowed to buy "memberships" in the association, and their executives sit on its board of directors. Arbitration firms often court clients by touting their small awards and perfunctory procedures. Also, arbitrators face an inherent conflict to "please" companies to keep them coming back for repeat business.
- Compromised judges: Arbitrators can make $10,000 or more a day, in comparison with a Superior Court judge's $133,000-a-year salary. This leads to the temptation for sitting judges to impress arbitration firms with their ability to get quick settlements of complex cases. Judges may also feel pressure to uphold disputed arbitration decisions.
- No oversight or alternatives: Arbitration decisions are not appealable and are subject to judicial review in only a few narrow circumstances. Also, many people with serious complaints -- such as racial discrimination, sexual harassment or denial of medical care -- have no choice but to have their case heard by a arbitration firm selected by the company that is the target of the grievance.
Private Justice: Can The Public Count On Fair Arbitration?
Judges As Arbitrators: A Conflict of Interest