Watch the video of Larry Bodine, Editor in Chief of The National Trial Lawyers, chatting with renowned personal injury attorney Mitch Jackson on the topic:
“It's time to Ban Arbitration Clauses in Consumer Contracts!”
Suppressing legitimate claims
These sneaky arbitration clauses are the secret weapon of big banks and corporations to sidestep the American court system, to suppress legitimate claims from being filed and to make sure that the consumer loses.
What I’ve described is not the paranoid raving of a fringe group. It’s the studied conclusion of the U.S. Government. The federal Consumer Financial Protection Bureau reviewed hundreds of cases over a two-year period and concluded that arbitration clauses are a raw deal for consumers.
“Forced arbitration is among the most serious threats to Americans’ financial security and has denied justice to countless victims of Wall Street’s unscrupulous behavior,” said Lisa Blue, president of the American Association for Justice.
“Revoke Wall Street’s license to steal,” said Lisa Donner, Executive Director of Americans for Financial Reform. “Just by opening bank account or accepting a credit or debit card, you should not have to give up your basic legal rights if you are ever ripped off. This practice has been gone on too long. It needs to stop.”
Comparing litigation to arbitration
Corporations win 93% of consumer disputes in arbitration. In 1,060 arbitration cases filed with the American Arbitration Association in 2010 and 2011, consumers won their claims in 32 cases or obtained debt forbearances in 46 cases -- a win rate of 7%.
In those 1,060 cases, consumers recovered only $400,000, while corporations got decisions requiring consumers to pay $2.8 million.
In comparison, consumers win billions in court. Over a five year period, on average, 32 million consumers in class action lawsuits were eligible for $2.7 billion in cash, in-kind relief, expenses and fees in cases brought against corporations.
An average of $200 million per year was paid out to consumers from these class action settlements.