What Is Forced Arbitration and How Does It Affect You?
Most people understand that arbitration is a process to resolve disputes. Two sides state their case to an arbitrator or an arbitrator panel. The arbitrator’s primary duty is to consider the facts and arguments from both sides and make a decision on the matter.
In some cases, both parties enter into the arbitration voluntarily. By contrast, forced arbitration is when a company forces consumers to handle any disputes through arbitration as a provision of buying their product. By doing so, the consumer is effectively waiving their right to sue or take part in a class-action lawsuit.
When a consumer uses a defective or dangerous product, forced arbitration often prevents them from adequate recovery for damages. It also stops them from reporting on the potential dangers to others. It’s important to understand how forced arbitration can affect you and how you can protect yourself and fight back.
How Forced Arbitration Affects You
Typically, people are unaware when they have agreed to forced arbitration. That’s because the company shoves all the legal language into the conditions of the contract. Most of the time, people do not notice the forced arbitration clause in the terms of conditions agreement before they accept it.
If you sign an agreement containing a forced arbitration condition, you typically have only one option for resolution. Generally, the contract lists the arbitration company, and they must be contacted if you have a dispute regarding the product. It’s important to note that arbitration proceedings are private. As such, the process works without a judge or jury. You also do not have the right to appeal.
What’s particularly troubling about forced arbitration hearings is that arbitrators do not have to account for legal precedents. What’s more, the company pays the arbitrator, making it more likely than not that the company will receive a favorable decision.
Decisions are not subject to review by the public or any authorities. Additionally, consumers do not have the option to sue for negligence. Even if you are harmed by a defective product or a scam, your only recourse might be through forced arbitration.
Options to Protect Yourself Against Forced Arbitration
In 2019, legislators enacted a bill called Forced Arbitration Injustice Repeal (FAIR). The new law prevents pre-dispute forced arbitration from being valid or enforceable. It also prohibits conditions that prevent consumers from joining class-action suits. However, it does not protect consumers if the condition arises after the purchase. Here are some tips to help you avoid forced arbitration.
Read the contract and look for arbitration language: If the document is online, search “arbitration” or “dispute” to find information about the company’s dispute resolution practices.
Opt out if possible: See if the company offers an opt-out. Not every company does, but it’s worth checking. Note that you may have to opt-out within 30 days of your purchase.
Use legal counsel: If you have a dispute but are obligated to use forced arbitration, get legal counsel promptly. Often, a company would rather settle a dispute through a financial settlement rather than begin arbitration or defend themselves in court.
Get Help from Leonard Legal Group in New Jersey
If you’ve been hurt by a defective or harmful product with a forced arbitration clause, contact our legal team today. Our skilled injury attorneys can help you get the compensation you deserve for damages. We have the experience and know-how to take advantage of loopholes and get the most favorable results for you. Schedule a free case consultation now.