Contact: Amaya Smith, American Association for Justice
202.965.3500, ext. 8740
Washington, DC—Americans generally disapprove of binding arbitration provisions in consumer contracts as an alternative to civil legal proceedings involving a judge or jury, according to a recent national poll by survey firm Peter D. Hart Research Associates Inc.
“Mandatory binding arbitration doesn’t give consumers a choice,” said American Association for Justice President Kathleen Flynn Peterson. “This poll proves that when asked to choose, consumers overwhelmingly say ‘no thanks’ to unfair arbitration agreements. Arbitration can only be a valid and effective method of resolving disputes when both parties agree voluntarily.”
Consumers are sometimes required to sign a contract with a company when purchasing products or services ranging from cell phones to nursing home care. These contracts often include a binding arbitration provision which states the consumer agrees to have any dispute with the company decided by an arbitrator, rather than by a judge or jury in a civil legal proceeding.
Binding arbitration has even been enforced in nursing home deaths. Massachusetts resident John Donahue suffered an eye injury so severe that it required removal of his eye while under the care of a nursing home. The infection caused by his injury eventually led to his death. When his daughter Marlene Owens went to file a claim against the nursing home corporation she was told that her father signed a binding arbitration agreement without any family members present. The nursing home insists that the case be taken to arbitration and the case is currently pending.
According to the polling, when consumers learn that the company picks the arbitrator, and they give up their right to take the case to court and binding arbitration applies even if they are seriously injured, 81 percent disapprove.
The poll also shows broad support for Congressional legislation called the “Arbitration Fairness Act” that seeks to protect Americans from abusive arbitration agreements. The legislation would ensure that the decision to arbitrate be made voluntarily and after a dispute has arisen. In addition, the legislation enjoys very strong support across party lines with no statistically significant differences between Democrats (+38) and Republicans (+37).
Last week, the U.S. House and Senate passed The Food, Conservation and Energy Act of 2008 conference agreement containing a voluntary arbitration provision which would allow farmers to opt out of binding mandatory arbitration clauses at the time they sign a contract with a processing company. The enactment of this provision would mark a significant step forward for farmers who are subject to these abusive contracts.