The Proliferation of Binding, Pre-Dispute Arbitration Provisions

Mandatory pre-dispute binding arbitration, also known as forced arbitration, clauses are becoming increasingly widespread in many different settings, including the vast majority of consumer contracts. Such consumer contracts include credit card and cell phone agreements, car sales documents, housing contracts, rental car agreements, brokerage agreements and most agreements to buy nearly anything on the internet. Courts have numerously enforced these mouse print contracts against consumers, employees, and patients.

Many disadvantages in the forced arbitration policy have been found since its growth and development from the Federal Arbitration Act of 1925. Despite this, the Supreme Court has repeatedly said that arbitration clauses are at least as fair as the civil justice system and has further asserted that arbitration is faster and cheaper than the court system over time. However, speed should not be the primary reason that we so widely utilize a system so different and disadvantaging than the civil justice system created by the U.S. Constitution.

Private arbitrators are very different from jurors taken from the citizenry and forced arbitration is largely secretive in comparison to the publicly accountable court system. This leads to a lack of public law that can evolve and grow over time. Consumers are also far less likely to receive a remedy for illegal conduct through arbitration than they would in the civil justice system.

Outside of the arbitration context, the general rule is still that the right to a jury trial may be waived if the waiver is known, voluntary, and intelligent. However, recent U.S. Supreme Court jurisprudence has led courts to conclude that many arbitration clauses may waive this right even where they do not meet the voluntary, knowing, and intelligent standard, putting the integrity of this rule in serious jeopardy.

Benny Agosto, Jr. is a partner at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner in Houston, Texas. For over 65 years, Abraham Watkins has successfully represented injured people and families who fall victim to catastrophes. Our attorneys have the knowledge, experience and resources necessary to obtain just compensation their clients. For more information, please contact the office of Benny Agosto, Jr. at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, by letter at 800 Commerce Street, Houston, Texas 77002, or by phone at (713) 222-7211.