Arbitration clauses keep people out of court

Arbitration clauses, which require disputes to be settled in non-court forums, are showing up in the most routine of agreements these days.

This week, I wrote about this issue in Legal Briefs, my Toledo Blade column that appears every other week. A reader wrote that she had signed a contract with a cell-phone company after receiving assurances that it would provide good coverage in her area. She wanted to know whether she could sue for fraud.

Regardless of whether she had a good claim for fraud, I suspected she would be stuck in the arbitration system. I looked at the terms the agreement the company posted online and, sure enough, it contained an arbitration clause. Arbitration is a method of dispute resolution separate from the court system. Promoters believe it’s cheaper and faster than going to court. Detractors think it has the potential to dodge statutory and common law, and is used by big business to avoid the jury system.

I’m somewhere in the middle on the issue. People always want to sue until they realize the time and expense it might take to get any justice. If the case isn’t worth that much money, it might make sense to seek arbitration. At the same time, we’ve spent hundreds of years developing the common law. Ideas and theories build upon each other and offer guidance to courts and lawyers. I don’t like the idea that potentially unique issues will be decided in forums that won’t add their decisions or reasoning to the body of common law.

People also don’t realize just how binding arbitration clauses are. Lawyers can sometimes get around an arbitration clause, but the clauses generally are presumed reasonable because both parties agreed to to arbitration as part of the contract. So, before you sign your next cell-phone or video store agreement, check it out to see whether it contains an arbitration clause. Before you sign on the dotted line, make sure you understand the agreement.