Corporations: Court For Us, Arbitration For You

According to a study from three law professors, corporations are hypocrites when talking about mandatory arbitration. Corporations require arbitration in almost all of their consumer contracts, but not when they sign contracts with other companies. The study shows that consumers are forced to live by a double-standard, one that limits their ability to resolve disputes in open court.

Kia Franklin, the misinformation dissolving diva over at Tort Deform says that the true reason is to short-circuit discovery:

Discovery is the process litigants use to build their cases.  During discovery, a plaintiff can force a defendant to produce documents and electronic records, produce witnesses for depositions, and answer a series of questions called interrogatories.  No one on either side of the tort “reform” movement will argue with me when I say that discovery can be extraordinarily expensive, and extraordinarily effective.  You therefore may not be surprised to learn that arbitration severely restricts the discovery process.

The study also confirmed that arbitration contracts commonly appear in financial and telecommunications contracts, preventing cellphone and credit card users from holding their banking or telecom conglomerates responsible for their mistakes.

Companies Unlikely to Use Arbitration With Each Other [The New York Times via Tort Deform]
(Photo: Zingaro)