Opinion on Arbitration v. Courts From a Local Arbitration Lawyer

I just received a notice from Amazon that the terms of use on my account had changed. The mandatory arbitration clause has been removed in favor of a provision that disputes will now be resolved in the courts with litigation. Learn more from an arbitration lawyer near me.

So What if it’s Arbitration v. Courts?

To the average consumer, probably not a big deal. You’d have to have a pretty big dispute to want to hire a lawyer to go up against Amazon. Losing a $100 item that you ordered won’t do it for sure.

Forced Arbitration Agreements

But to a lawyer who represents individuals this is very interesting. For years, companies have sought to require customers and employees to sign forced arbitration agreements. By “forced”, I mean that as a condition of using the service, or working for the company, you have to agree to arbitrate any disputes.

Companies prefer arbitration because:

1) In many jurisdictions, it is much quicker than the courts.

2) The attorneys who sign up to be arbitrators tend to come from corporate law backgrounds, so there is a feeling they will favor companies.

3) Results of arbitration are private, whereas jury verdicts are public record.

Those of us who represent individuals hate arbitration because:

1) We also perceive arbitrators may favor business interests.

2) There is no appeal from an arbitration decision that went badly.

3) Not only are we concerned that arbitrators will award less money than courts, but combined with the confidentiality of arbitration awards, we know the of cases drops significantly when the company on the other side is facing arbitration instead of court.

Federal Arbitration Act

Courts, relying on the Federal Arbitration Act, have upheld mandatory “forced” arbitration agreements because they reduce the courts’ workload.

Moving to Resolving Disputes in Court

So, to see a company moving away from arbitration is a welcome sign. Why would a company do this? There may be several reasons.

First, some courts (like ours in Virginia) are very efficient and almost as fast as arbitration.

Second, arbitration costs money and the company usually has to pay the cost of the arbitrator. (I recently had a case in arbitration dismissed by the company because they didn’t like the arbitrator’s fee estimate.)

Third, not having a right to appeal, and the spotty record of some arbitrators, works both ways. Companies can be hurt by bad decisions that can’t be appealed, just like individuals are.

Better System for Consumers?

Maybe this is a sign of good things to come. An efficient court system with good judges who reach fair results is still the best foundation for dispute resolution out there. A good court system also promotes mediation and settlement, which are far superior modes of resolution than either litigation or arbitration.

Get Help from an Arbitration Lawyer Near Me

With over 100 years of combined experience, we are seasoned professionals who are battle-tested both in the courtroom and at the negotiating table. Attorneys all over the mid-Atlantic refer clients to our firm, and as leaders in the bar we are selected by our colleagues to receive special recognition, year after year. Whether you need help with arbitration, a job loss, personal injury, divorce or perhaps your business is in trouble, Cook Craig & Francuzenko can help.