The New York Times Enters the Fray over Forced Arbitration
With a bold piece on its influential Opinion page, the New York Times has taken an important step in shedding media light on the fight against corporations' use of forced arbitration in consumer transactions. As consumer advocates have argued for years, the Times editorial board points out, "Banks and businesses love forced arbitration, because it is a process they control for their own benefit. It shields them from accountability by closing the courthouse door to consumers."
Referring to the Consumer Financial Protection Bureau's recently issued preliminary report of its ongoing study of consumer arbitration: "The report found, for example, that most large banks put forced arbitration clauses in basic contracts and that 90 percent of those clauses bar both individual lawsuits and participation in class actions. This results in a systematic denial of justice." Elsewhere, such a class action ban embedded in arbitration clauses has been referred to as a "Get-out-of-Jail-Free card" (referring to the lucky draw in a Monopoly game) since it insulates companies against valid claims of misconduct.
The New York Times also remarks that, "Ideally, Congress would pass a law to remedy that injustice." Senator Al Franken (Minn.-D) is equally concerned about this "systematic denial of justice." He is leading an effort to ban forced arbitration by introducing the Arbitration Fairness Act. You can read more about this important legislative effort here. And, you can urge your own Senators to co-sponsor the bill.
Forced arbitration is one of those obscure legal issues that people do not care about until it directly impacts them. And yet, the denial of access to the courts severely affects the rights of every American. Read the New York Times Editorial here.