Hiller: Beware binding arbitration

If you've taken an introductory course in government and politics, you should be familiar with the fact that the Seventh Amendment to the U.S. Constitution guarantees the right to bring civil cases to court. Unfortunately, thanks to an abusive business practice that has become nearly universal, Americans are slowly losing their access to the civil court system.

Most, if not all, contracts nowadays have "binding arbitration clauses." These clauses are included on cell phone contracts, employment contracts, rental contracts, car warranties, banking contracts, credit card contracts and more. These clauses serve as notice that if you ever have a dispute with your contractor, you are waiving your right to take them to court and instead must take your case to a private arbitrator - and worse yet, they get to choose the arbitrator.

Corporations who utilize binding arbitration have the potential to bring thousands of cases to private arbitration firms. These arbitration firms don't need to be told who to side with. Although it is difficult to study just how biased arbitration firms may be against the consumer due to the secretive nature of binding arbitration, one study conducted by the Consumer Group Public Citizen uncovers some startling results:

"Consider the overwhelming success that First USA Bank, once a major credit card issuer, enjoyed due to the work of NAF arbitrators between early 1998 (when the bank began to force its credit card customers to use arbitration) and early 2000. First USA Bank was forced to turn over statistics on its arbitration cases to a plaintiff who sued the firm in an Alabama court, allowing the information to become public. The bottom line from these data was clear. In the nearly 20,000 cases where NAF reached a decision, First USA prevailed in an astonishing 99.6 percent of cases."

The arena of binding arbitration fails to provide many of the standard rules that our court system provides. As already mentioned, arbitrators' rulings are secret and are usually only released through lawsuits. Arbitrators are not even required to issue written opinions if they do not wish to do so. Finally, and perhaps most importantly, there is no judicial review - the decisions of arbitrators are not bound by any previous rulings, even their own.

If you are sitting there and saying, "What's the worst that can happen? So I get screwed over by the bank, what else is new?" consider the story of Jamie Leigh Jones. Jones was working in Iraq as a private contractor for Halliburton and claims that she was drugged, gang-raped and falsely imprisoned in a shipping cell by her fellow employees. Furthermore, she claims she was told that if she sought medical attention, she'd be fired. Jones has filed civil suit against Halliburton. However, legal experts unanimously agree that Jones' case will be thrown out. Why? Because there was a binding arbitration clause in her employment contract with Halliburton. Jones will have to bring her case to the kangaroo court that is binding arbitration, meaning that Halliburton, and those who are accused of perpetrating such horrible crimes, may never be held financially accountable.

Binding arbitration clauses can leave you in the dust in other ways. Imagine every contract you've ever signed. Now imagine a dispute you might have with the contractor - perhaps a renter who refuses to refund a security deposit or a car dealership who refuses to honor its warranty. Binding arbitration takes your right to air your grievances and ensures that your case will not be decided in a judicious, fair manner.

At the moment, there unfortunately isn't anything consumers can do, short of trying to haggle their way out of binding arbitration and putting themselves at the mercy of their contractor. Binding arbitration is so universal that you will be hard-pressed to find contracts which don't contain them anymore.

This is my last column for The Diamondback, and I don't want this issue to die here on this page. If you're as outraged as I am about binding arbitration and want to protect your access to the courts, please visit www.nobindingarbitrationclauses.wordpress.com and sign the petition asking Congress to support existing legislation that would outlaw binding arbitration.

Tim Hiller is a senior microbiology major. He can be reached at thriller@umd.edu.