Arbitration Legal Case

Only about one-third of cases filed with the AAA reach the evidentiary stage. Nearly two-thirds of disputes filed with the AAA are resolved before the first hearing, many of which do not result in compensation for arbitrators. Arbitration clauses are often included in the fine print that a person must click on when purchasing online. Arbitration clauses are also often included in the company`s orientation and personnel documents that an employee receives when starting a new job. Because these arbitration clauses are usually buried in a sea of boilerplates, many people who are subject to them do not realize that they exist or do not understand their effects. These terms are called binding or forced arbitration, because if the employee or consumer does not agree to arbitration, they will be denied employment or the opportunity to purchase the product or service. The employee or consumer does not really have the choice or ability to negotiate the terms of the arbitration clause. Mandatory conciliation in the consumer and employment sectors is very different from arbitration clauses in contracts between two companies or a company and a union; In these cases, the parties voluntarily negotiated on an equal footing and knowingly agreed to settle disputes between them. Concerns: How do I begin arbitration of my case? In their 2014 survey, Colvin and Gough interviewed the plaintiffs` lawyers about their recent cases of employment in mandatory litigation and arbitration.52 Summary applications for judgment were made to the courts in 77% of cases. Surprisingly, however, summary requests for judgments were also made in almost half of the arbitration proceedings (48%).

While this gap is not negligible, summary judgment in arbitration is more common than is often acknowledged. One way to look at the impact of summary judgment on outcomes is to compare litigation and arbitration cases where no request for summary judgment has been made. Since no application for summary judgment was made in these cases, any difference between the two bodies would not result from a different use of summary judgment. In reviewing this subsample of arbitration and litigation cases where there was no request for summary judgment, Colvin and Gough found that the win rate in mandatory arbitration was 32% lower than in litigation. This result shows that the pay gap cannot be explained as an effect of increased reliance on summary judgment claims in litigation. The trend towards the increasing use of arbitration in consumer and employment relations threatens to undermine decades of achievements in the field of labour and consumer rights. In recent decades, courts have expanded the scope of arbitration, reduced the ability of individuals to avoid arbitration, and limited the ability to obtain judicial review. They have adopted pro-arbitration doctrines of such scope that arbitration clauses are almost always maintained when challenged in court, even though individuals can prove that an arbitration clause was buried in the fine print or included in reference to an obscure and inaccessible source.

The courts also uphold the clauses even if a person can prove that an arbitration system is too costly for them. As a result, many important workers` rights that are subject to compulsory arbitration can no longer be brought before the courts. These rights include minimum wage and overtime pay rights, breaks, protection from discrimination and unfair dismissal, privacy, family leave, and a host of other rights of state and federal workers. A third development in the 1980s concerned the types of litigation that were submitted to the FAA. While it had previously been held that the FAA applied only to contractual disputes, the Supreme Court ruled in 1985 in Mitsubishi Motors v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985) that the FAA also required arbitration of legal disputes. Mitsubishi was involved in a commercial dispute in which a party alleged a violation of antitrust laws.

Two years later, in Shearson/American Express v. McMahon, 482 U.S. 220 (1987), the Supreme Court expanded its opinion to conclude that a dispute involving alleged violations of the Rico Extortion Act (officially known as the Racket-Influenced and Corrupt Organizations Act) and federal securities laws was also subject to an ordinary standard arbitration clause. Between 1985 and 2015, there were more than two dozen Supreme Court decisions in arbitration, virtually all of which expanded the FAA`s reach and limited states` ability to enforce laws to protect consumers and workers, as well as individuals` ability to resist costly and unfair arbitration systems. In light of these decisions, a party`s ability to challenge an arbitration clause on the basis of State law has been reduced to a vanishing point. While companies are free to create the rules they want for arbitration, many choose to incorporate the rules of an arbitration service provider established by reference. These arbitration service providers, such as the American Arbitration Association (AAA) or JAMS, administer the arbitration and provide lists of arbitrators from which the parties can choose, courtrooms where arbitration can be conducted, and standard rules or procedures to follow.