In Arbitration, a ‘Privatization of the Justice System’

Source: Jessica Silver-Greenberg and Michael Corkery, New York Times, November 1, 2015

Editor’s Note: This is Part 2 of a three part series on fine print in contracts, read Part 1 here.

Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found. … All it took was adding simple arbitration clauses to contracts that most employees and consumers do not even read. Yet at stake are claims of medical malpractice, sexual harassment, hate crimes, discrimination, theft, fraud, elder abuse and wrongful death, records and interviews show. … For companies, the allure of arbitration grew after a 2011 Supreme Court ruling cleared the way for them to use the clauses to quash class-action lawsuits. Prevented from joining together as a group in arbitration, most plaintiffs gave up entirely, records show. Still, there are thousands of Americans who — either out of necessity or on principle — want their grievances heard and have taken their chances in arbitration. Little is known about arbitration because the proceedings are confidential and the federal government does not require cases to be reported. The secretive nature of the process makes it difficult to ascertain how fairly the proceedings are conducted.