Please Post Your Story Here
I decided to write this blog as a service to all those who have already been negatively affected by an arbitration experience or soon could be. Despite the veneer of “fairness and impartiality” that is propagated by arbitration advocates, the current system offers little protection for consumers, small businesses and employees with far less bargaining power than those with whom they’re contracting.
I recently went through an excruciating arbitration horror story of my own. I was forced to sue a recent former employer for breach of contract and fraud with the arbitration company, JAMS, My opponent perjured himself throughout deposition and right in front of the arbitrator. Then he even admitted to defaming me during a vigorous cross-examination. It all looked very promising – so promising in fact, that he made two huge settlement offers, which I now regret having declined. Just before the conclusion of the proceeding I was informed by someone in the industry that my former employer was spreading lies about me, presumably in an effort at blacklisting. We brought it to the arbitrator’s attention, but he decided to ignore it.
Despite what was a huge preponderance of evidence in my favor, the arbitrator, unbelievably, decided against me. He also ruled that I should pay my former employer’s legal fees, in addition to my own. The total bill was almost a million dollars and was completely devastating.
It wasn’t until after the proceeding when I attempted to appeal the arbitrator’s decision that I learned of the built-in iniquities of the binding arbitration system here in the United States. The system usurps ordinary consumers’ basic civil right to trial by a jury of their peers and grossly favors big business. Don’t believe me? Read some of the stories posted in this blog. Worst of all, there is almost no possibility at all for appealing a lazy or downright wrong ruling by an arbitrator.
Originally, our government enacted the Federal Arbitration Act in 1925 in order to alleviate pressure on an overworked legal system. The intent was to allow large corporations to settle their disputes privately, outside of the public courts. However, the Act still exists almost wholly unaltered since that time, and today is being used as a means of settling disputes between big corporations and ordinary citizens – a disparity that was never intended.
Think it doesn’t affect you? Think again – almost everyone in this country who has a cell phone or a credit card is subject to a binding arbitration agreement. Even hospitals and doctors have them buried in the fine print of their admissions documents! This allows these parties to eschew the civil litigation system that you already pay for and to which you are fully entitled. Instead of a jury of your peers, your case will be decided by a person who works for a big corporation which is being paid by the corporation you are litigating against. To make matters worse, most arbitrators work in their off-time as defense attorneys for the same sort of companies you are suing. Imagine suing a hospital for accidentally using elevator lubricant to clean surgical instruments used during your operation – and the “impartial” person assigned to decide your case is an attorney who makes a living defending doctors’ and hospitals’ malpractice claims. It happened to a man named Bennie Holland.
Perhaps the worst part of arbitration is that there is NO PUBLIC RECORD OF PROCEEDINGS. This is shockingly irresponsible as it allows corporations and the people that run them to violate your rights with impunity and without any fear that discoverable records of their transgressions exist. In my case, this meant I had no way of knowing that my prospective employer was a people-mill that had been in almost constant legal battles with former employees when I signed my contract – a contract which included a binding arbitration agreement.
I ask that you please use this blog as a venue to broadcast your own personal arbitration horror story. I’m making a documentary about the injustice of the Alternative Dispute Resolution (ADR) system and the current initiatives to reform it and I need to hear YOUR story. It’s incumbent upon us all to use our voices to close this loophole that is allowing ordinary Americans’ right to a fair trial be usurped by large corporations and their lobbyists.
Please also contact your Senators and Congressmen and tell them to support the Arbitration Fairness Act of 2009 which is currently working its way through Congress.
Hello, I am sorry you had the horrible experience. I too have had a terrible arbitration experience but I am still living mine as it is not over yet. We went through September of this year, received the “award” in October 2008. The repairs are to be completed by December 10, 2008. The only thing I have heard is from the builder is a letter from his attorney offering $2600 to repair my house, which is NOT near enough to fix the 39/188 items. The attorney also states in order to get the check forwarded to me, we must sign a release exempting the builder, the insurance company and the warranty company from current and future defects. Now our experience with arbitration, oh what a joke that was. We paid $1500 for a a complex arbitration meaning we wanted a decision and the method of repair for the defects. We turned in our paper work, with the documentation, and photos, our defect list had 188 items. The builder responded to our defect list he agreed 65 items are “covered defects”. The day of arbitration we had my husband, our structural engineer, and myself. For the builder he had the operations manager, the regional manager, two customer service managers, the framer, the finisher, a heating/cooling guy, a flooring guy, and an attorney. At the beginning of arbitration the arbitrator wanted to sit down and discuss the items, which we did. As we went down the list the builder agreed to a number of items he would repair. We then looked at the defects in the house, the items the builder agreed to repair were breezed over without true inspection. Almost all the items required measuring but, the arbitrator NEVER measured a single defect in our home. We have mounds and dips in the kitchen floor he did acknowledged the mounds and dips in the floors. We have studs pushing though walls, walls not nailed to studs, cracks in walls and ceilings, every door in my house has gaps you can see daylight through, showers/tubs that leak, the back door leaks water, we have obvious mold growth in two bathrooms and the back door. We were not awarded the 60 items the builder agreed were covered defects, nor the numerous defects he agreed to repair during arbitration. When I called to find out how we were not awarded those defects and how I wasn’t awarded defects based on measurements when the arbitrator never measured any defects. I was told the builder must have backed out of his agreement to repair and the arbitration company “can not obligate the builder.” I was also told that the arbitrator has been an engineer for over 20 years, and has been doing arbitration for over 10 years he can eye ball defects and decide if they meet tolerance. When I told her that was not possible she proceeded to tell me if I wanted I could pay $150 for clarification, which would not change the decision or I could pay $1000 for an appeal. I wrote a letter essentially protesting the award. I was called by the arbitration company the lady told me she talked with the arbitrator, he was standing by his ruling, he told the woman that he measured all the defects in our home with equipment provided by the builders representatives. Also the woman told me that when the builder stated the items were covered defects really meant to say “could be covered defect.” When I asked her to put the phone call in writing she refused stating that is not her job. Again she told me I could pay $150 for clarification or $1000 for an appeal. All of which would have been due the day after the phone call. Now the awarded items cover our back door that leaks, the showers that leak, and some dry wall issues. The defects that were not awarded to us were the kitchen floor with the mounds, the studs pushing through walls, the walls not nailed to studs, the doors with gaps, the spalling crack under the ceramic tiles, along with dozens more defects. The defects that were awarded have not been repaired and I have NO doubt that the builder is going to force me into filing a compliance hearing, which is another $1000, and uses the original arbitrator. WOW talk about not fair. Homeowners with defective houses are screwed.
I received a letter from my Attorney stating that, I must be present November 19, 2008 for Mandatory Arbitration or I forfeit my rights. The cards are stacked when me when I walked into the room. I witness my rights being violated three minutes into the arbitration process. The Attorney for insurance company was able to inter opinions rather than facts about me. The thing that troubling is that there were no objections, when they presented an argument that did not hold facts. I came in good faith, but was not treated in good faith. What have our legal system revolved into? Since the arbitration hearing is over. We have come to know that, its come down to “Us and Them” thats all that matters as long as we win. I learn on November 28, 2008 that there will be No award from the arbitration panel and must file a rejection of the award at a direct cost to me.
Continued: I can not ever recall going to an Arbitration hearing. I was unaware of the procedures. “ The case is automatically put on the arbitration docket and set for arbitration within one year of filing. Both plaintiff and defendant are then required to comply with the expedited discovery rules, requiring each to disclose witnesses, documents, etc., even without being served discovery. Plaintiff must also itemize damages. Attorneys then prepare the case as usual, preparing for a hearing within a year. The hearing is set for two hours max. The case can be completed within two hours, usually, because of SCT rule 90c which permits attorneys to submit into evidence, without laying a foundation, documents that were exchanged 30 days in advance of the hearing. So there is no need to bring in witnesses re damages if you exchanged the bills ahead of time, etc.”
I was unaware until 30 days before my hearing. I knew that lady justice is blind, but know one said she was deaf and has lost her sensitivity for fairness and respect for the rule of law.
Also I did not know that, The hearing is conducted in front of three arbitrators who are local attorneys and who follow the ILL rules of civic pro and evidence, for the most part. When I entered the room both arbitrators and defendant’s Attorney were getting along very well. The environment and moved of the room was set with basis and the decision to denied award hand writing on the wall. Why do our laws and law makers allow this to continue with check. The behavior is that of Katrina making its way through our Justice System with defense or cover.
Abdullah – what kind of case was it? Were you suing the insurance company or were they suing you?
At Fair Arbitration Now, http://www.fairarbitrationnow.org/content/home-court-advantage-how-building-industry-uses-forced-arbitration-evade-accountability there is a new report out from Public Citizen, Home Court Advantage, about abuse of arbitration in housing. The report itself is a 60-some pg. PDF, but there are numerous articles you can read also. I have read the entire report now and found it excellent. Really exposes the sham that home warranties are, as well as arbitration itself.
Hello,
My name is Brian Forsythe and I am an independent filmmaker doing a documentary on mandatory arbitration clauses in consumer and employment contracts. I am currently traveling the country, speaking to experts and those with personal experience with the process. You can see my website at http://www.arbitrationfilm.com. Please visit the site and contact me if you have a story.
Thank you!!
Arbitration is not fair, nor cheap but big busineses can despose of you a lot faster. Please go to my web sight. Pictures do not lie. Neither did we. http://www.jordan-fogal.com
Please read my testimony to the congressional hearing it tells how it is done in the great state of Texas. I stood out side their development for 9 months and warned people and passed out information. Our night mare began in our new home in April of 2002. The first night in our new $360,000 home the dining room ceiling fell in …it was previews of comming atractions. We have been forced though the arbitration process twice. How many times can they abuse you for tellling the truth? When do arbitration and its horrific effects end?
In my last comment, you can find my Arbitration horror story on youtube titled My Money Pit, parts 1-3. I also have 3 “Bitch Sessions”, explaining what I went through and the legal system.
Arbitration has become big business for arbitrators due to the fees charged per sitting. The incentive is for any arbitrator to take as long as he or she pleases, so as to gain as much in fees as possible.The more senior the arbitrator the more likely you are to have delays and long proceedings.
Please visit http:www.arbi-trator.webs.com
Wow. What a horrible experience. I lost my company in a backloaded agreement that included an employment agreement where the compensation to acquire my company was to be paid via. the performance of the company. After I was fired (from my own company) we went to arbitration. Two days worth of a trial – and the Judge ruled in favor of the people that literally ripped the company out from under me. The trial was a circus that included them being caught in lies under “oath.” I can only conclude that these arbitrators want more business from the corporations. I walked away completely disallusioned. If this is the way the “legal system” works I want no part of it. Theives with money win. Avoid arbitration at all costs… and avoid JAMS. The little guy simply is NOT going to prevail in this game. Arbitration is final, and in my case it was the final nail in the coffin the crooks put me in that stole my company from me. If my case didn’t win (with literally ALL of the documentation favorable to me)… none will. Don’t count on getting a fair hearing at arbitration. Knowing what I know now I would have saved myself two years of legal wrangling waiting for my “day in court” and I would have walked away.
We recently went through a horrible arbitration experience which was forced on us by a company called Elance (http://www.elance.com). They employ a virtual arbitration company called net-Arb.com (http://www.net-arb.com). On the website of net-Arb.com, you can’t any information on their physical location, legal status or anything for that matters. Elance threatened to suspend our account if we refused to participate in the arbitration. During the arbitration, the other party (an Elance.com provider) was proven wrong on all their key points and they stopped responding to arbitrators but at the end arbitrators (we suspect there was just one) awarded Elance and their provider on their best case scenario terms while acknowledging that all their assertions were wrong. This was a very unusual decision and they couldn’t have reached this decision unless they had to decide in the favor of Elance as per policy. I have searched around internet and seems like they decide in the favor of Elance almost 100% of the times.
If the evil of forced arbitration was not bad enough in the traditional businesses, online scammy organizations such as Elance.com has also joined hands. Please include this story in horror stories list and let us know if more details are needed.
Thanks