Binding Consumers Through Forced Arbitration - Searcy Denney

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Laurie Briggs

Forced Arbitration Pervades Contractual Agreements, Binding Consumers

» Written by // March 2, 2015 // ,


Margaret Jane Radin, author of Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law, is of the point of view that the American court system is “allowing contract to gobble up tort.” In other words, the 37-year law professor believes forced arbitration is evil.

Forced arbitration lurks in the lengthy documents all of us sign at some point in our lives when we accept a job, buy tickets for travel, enter a cell-phone agreement or rent an apartment. And those are just a few of the dozens of examples of us waiving our rights to sue should something go wrong. Radin describes the cunning contracts as boilerplates.

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“Boilerplate…pervades all aspects of our modern lives,” she writes. “On a daily basis, most of us accept boilerplate provisions without realizing that should a dispute arise about a purchased good or service, the nonnegotiable boilerplate terms can deprive us of our right to jury trial and relieve providers of responsibility for harm.”

Boilerplates more often than not are buried in the document and go unnoticed by the consumer. The words “forced arbitration” might not appear and instead are referred to by the term “dispute-resolution mechanism.” Once you sign on the dotted line or click the “I agree” button online, the options for seeking justice are tossed out the window.

“Forced arbitration severely limits consumer options for resolving a dispute,” according to the National Association for Consumer Advocates. “Before any problem arises, you lock yourself into only one option – forced arbitration – for resolving all future disputes or problems. The contract typically also names the arbitration company that must be used – the one preferred by the company.”

The backlash being brought on forced arbitration has caught the attention of Congress and led to the filing of a bill. The Arbitration Fairness Act of 2013 calls for abolishing forced arbitration in antitrust, civil-rights, consumer and employment cases. It also declares “the validity and enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.”

Democratic Minnesota Sen. Al Franken might agree that is as much of a mouthful as the legalese in a forced-arbitration document but more meaningful.

“Forced arbitration provisions thwart the ability of workers and consumers to hold corporations accountable for wrongdoing, even in the most egregious cases,” Franken, sponsor of the bill, writes in a document on his Web site.

The American Association of Justice is hailing the legislation as a way to protect consumers from getting hurt by the fine print, saying the agreements are biased, costly, one-sided and rife with “secret backroom dealings.”

The Harvard Law Record concurs:

“Wrongdoers may routinely fail to take precautions that are much cheaper for them than self-protection would be for consumers, because they are able to escape liability by deleting rights that provide deterrence and redress,” reads an article in The Harvard Law Record titled “The Strip Mining of Legal Rights.” “Fine-print contract peonage worsens as standard form contracts proliferate, get longer, and change with greater frequency. Many of these contracts are not even available to the consumer before the transaction.”


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