In Congress, More Efforts to Gut Arbitration, Raise Legal Costs
Wednesday, May 6, 2009A refresher: Two types of arbitration are subject of policy discussions these days in Congress and on this blog.
- Binding arbitration: As proposed in the Employee Free Choice Act, binding arbitration would impose the equivalent of a two-contract — work rules, salaries, benefits — on businesses and unions if negotiations over first contract negotiations continue past 120 days. These terms would be mandated by a government-appointed, outside arbitrator.
- Pre-dispute arbitration: The common practice, including in many consumer contracts, that provide for non-judicial venues for resolving contract disputes. Business groups generally support this sort of arbitration, because it leads to quicker and less expensive outcomes by keeping the disputes out of the courtroom, away from attorneys whose seek to ring up billings, awards and settlements.
The American Association for Justice — the trial lawyers lobby — HATES pre-dispute arbitration, and has made killing it one of their lobbying priorities. Accordingly, Sen. Russell Feingold (D-WI) last week introduced S. 931, the Arbitration Fairness Act, a bill that bans predispute arbitration in business contracts with consumers. (Opening statement, text.) The legislation is the Senate companion to H.R. 1020 introduced by Rep. Hank Johnson (D-GA). (More rom the Green Bay Press-Gazette)
Just in time for the Senate bill, the American Association for Justice released a new opinion survey claiming that the public dislikes binding arbitration. The AAJ-led Fair Arbitration Now Coalition also held a news conference announcing the survey conducted by the Democratic polling outfit, Lake Research Partners, but it’s a laughable example of a survey that found what it set out to find. From the news release:
“The findings show clearly that Americans strongly oppose forced arbitration, and they see the Arbitration Fairness Act as a remedy. Not only is there real intensity to this view, but it traverses traditional partisan divides,” said Lake Research Partners President Celinda Lake. “Forced arbitration clauses – which are buried in the fine print of employment and consumer contracts – are another example of corporations taking advantage of ordinary Americans. The public supports the Arbitration Fairness Act because equal justice under the law is a core American value.”
Our emphasis.
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