The N.Y. Times has a front page article today, Arbitration Everywhere,Stacking the Deck of Justice (click X to clear my comment) , with this introduction:
By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies like American Express devised a way to circumvent the courts and bar people from joining together in class-action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.
The article details the history of inclusion of this clause in "
contracts of adhesion" that have proliferated over recent years. The Supreme Court, with the one vote conservative majority has delivered the message, "screw the little guy, they have to follow the contract." Arbitration, if it were more fair (however described) than the court system could be an improvement, but the Times gives copious examples where it is not. The arbitrators are paid by the corporations being sued, which may just explain why a disproportionate number are decide in their favor.
This was my comment posted on-line, that I wanted to share with this activist group of readers.
It comes down to private justice, tort action based on contract law, and public-government enforcement. When a major corporation has engaged in illegal or extra-contractual billing, as the article explains, the cost of litigation precludes such an individual response. Throwing in a few extra bucks charge for millions of customers every month becomes too tempting. This means that ethical non-abusive billing actually decreases corporate profit, an could be a breach of the fiduciary duty of officers and directors.
The Federal RICO act could be expanded, so that some of the more egregious offenses described in the article could be pursued by the Justice department. Inaction by the administration in pursuing such cases will have political repercussions which while not providing damages to the cheated individuals will prevent such predatory action in the future.
We are in an election season, and these contracts of adhesion are subject to federal law described in the article. This is not a simple issue, as the full Times article shows. But it is what elections are for, to allow the public to demand change when the pendulum has shifted too far. Candidates should be required to weigh in on this issue, whether the current federal law should be revised and if so, specifically how.
If we are to continue to have a mixed economy with powerful private corporations that we must engage to procure the conveniences and necessities of life, the mechanisms of equity, of prevention of abuse of consumers, must be part of governmental activity.
Let's get a response to this on the political agenda.