Binding Arbitration

What is Binding Mandatory Arbitration? 

When a corporation includes a BMA requirement in its contracts, it means your dispute must be decided by a private legal system. Because BMA clauses are "binding," you must abide by the decision and have no right to appeal. You cannot walk your case through the doors of the judicial system because you have (knowingly or unknowingly) waived your rights to have access to the court.

"You can't sue me" clauses usually mean you can't sue them for any liability in a court of law-but they can still sue you. That's right-they don't waive their rights-they only force you to waive yours. It isn't a reciprocal clause-it's a one way street and they own the roadway.

This is a private, for-profit system that:

  • is a lawless system. The arbitrators are usually retired judges, who do not have to follow the law or even justify their decisions. (Full story here).
  • Arbitration takes away your right to appeal an unfair or bad decision
  • normally costs much more than using the courts and it is usually required that you go to the city and state they reside in
  • prevents you from being part of most class action lawsuits
  • favors business rather than you because decisions are made behind closed doors

"Without knowing it, you may have already signed dozens of these clauses. They're everywhere: health insurance contracts, telephone contracts, car contracts, rental clauses, credit cards, bank loans, nursing homes, house repairs, computer companies you name it." See:

Binding arbitration is no substitute for consumer accountability

I can't help but wonder what our founding fathers would think of this new method corporations have found to hide from accountability. Access to our judicial system is our most effective means of deterring fraud and holding wrongdoers accountable for harm their actions (or in-actions) may have caused. MORE

For more on binding mandatory arbitration see a few earlier blogs here.

Business Week: Binding Arbitration: Banks vs. Debtors (Guess Who Wins)

Sun Sentinel: Will U.S. Supreme Court rule in favor of consumers?

See more here:

Listen to Ira Rheingold, Executive Director and General Counsel of the National Association of Consumer Advocates and Janet Ahmad, President of HomeOwners for Better Building discuss the costly and harmful effects of binding mandatory arbitration and how it affects consumers, our rights and our justice system.

Enhanced by Zemanta
A memoir exposing the steep price consumers pay when facing mortgage servicing errors, inaccurate credit reporting, illegal debt collection practices, identity theft and weak consumer protection laws. THE BOOK » DENISE'S STORY »