Arbitration clauses began as agreements that were negotiated between sophisticated businesses who had long-lasting and ongoing business arrangements. Today arbitration clauses are often buried in all sorts of pre-printed contracts that consumers execute on a daily basis. Health insurance contracts, cell phone contracts, automobile contracts, rental contracts, finance agreements, credit card agreements, bank loans, and even nursing home admission agreements often have clauses that require arbitration, a costly process that deprive consumers of their right to seek the protections of our courts, a cornerstone of our democracy. Many times, these arbitration agreements also prevent an aggrieved consumer from bringing or participating in class actions. Mandatory arbitration and class action waivers allow unscrupulous businesses to cheat lots of consumers out of a little bit of money — all the while knowing that an individual consumer could never afford to compel arbitration, and even if the consumer did, the company will never have to answer for its actions in a public courtroom.
Well, that may soon change. Congressman Henry “Hank” Johnson is set to introduce the Arbitration Fairness Act of 2009 this week. The Arbitration Fairness Act would prohibit the enforcement of binding mandatory arbitration clauses in consumer, employment, and franchisee contracts. If sophisticated corporations want to negotiate these agreements among themselves, let them have at it. But consumers do not need to be unknowingly saddled with the expensive and unfair arbitration process when our courts are best equipped to handle disputes. We urge Congress to pass the Arbitration Fairness Act of 2009 and encourage you to call your Congressman and Senator and urge them to join Congressman Johnson and vote for this important piece of consumer protection legislation.
Richard J. Arsenault, 2011
