New Study Reveals a Serious Issue with Forced Arbitration

Recently, the American Association for Justice (AAJ) released a new report uncovering the truth about forced arbitration. Forced arbitration is a corrupt system created by corporations in which injured workers and consumers have no plausible way of obtaining justice.

What is Forced Arbitration?

Generally speaking, arbitration is an alternative way to resolve disputes between the two parties and can be either voluntary or mandatory. Under forced arbitration, however, employees or consumers waive their ability to sue, participate in a class-action lawsuit, or to appeal. These clauses are often hidden in the fine print of many contracts.

Through forced arbitration, workers must agree to give up fundamental constitutional rights. Many times, this is done without the proper understanding of the situation. Additionally, companies often bypass the process entirely without proper documentation.

How Issues Were Unearthed

The information regarding these issues was uncovered using data provided by the nation’s two largest arbitration providers themselves. It examines five years of data on consumer and employment forced arbitrations

The new study from the AAJ found that there are only 6,000 consumer arbitration claims filed every year, compared to the estimated 800 million arbitration clauses that are in effect. On average, only 382 consumers a year win a monetary award from forced arbitration.

Similarly, 60 million workers are subject to forced arbitration, but only 0.02% of these workers tried to pursue a claim. Over the five years studied, only 282 employees were awarded monetary damages in forced arbitration, which is less than one-ten-thousandth of one percent of covered workers.

Over the five years studied, consumers brought 6,012 claims valued at least $3.7 billion in damages. They won monetary awards in just 131 cases. In contrast, banks brought 137 cases, yet somehow won monetary awards in 314.

What This Data Means for Consumers and Workers

Clearly, the odds are stacked against both consumers and workers when they are in vulnerable legal situations. Americans are more likely to be struck by lightning than they are to win in forced arbitration.

It is clear that this issue contributes to a system that favors corporations over justice for many American workers and consumers.

Seek Legal Counsel to Discuss Your Rights

If you or a loved one is seeking legal representation for a personal injury case, do not be afraid of big corporations. Reach out to the attorneys at the Whitley Law Firm to discuss your case with a free case consultation. Call us today to get started.