New York Times Investigation Reveals the Bias in Arbitration

A New York Times investigation revealed that through the increasing use of arbitration clauses by companies across the country, millions of people have been forced to sign away their right to sue a company in court.

In the study, the Times analyzed the records of more than 25,000 arbitrators between 2010 and 2014 and interviewed hundreds of arbitrators, lawyers, plaintiffs and judges in 35 states.

The results reveal what has been considered the privatization of the legal system in a way that benefits the company and hurts employees, consumers, patients and other common plaintiff groups.

A Biased Approach to the Legal Process

Through the simple addition of arbitration clauses to contracts, companies have taken away a persons right to sue in court. Instead, claims are left to the discretion of an arbitrator, who most often, according to the Times report, is likely to rule in favor of the company, whom they consider as a client they do not want to lose.

Taking the place of both judge and jury, arbitrators determine how much evidence is presented and how much can be withheld. Because arbitration proceedings are confidential and there is no law requiring the cases be reported, little is known about the process, making it difficult to know how fairly they are conducted.

The Times investigation found that 41 arbitrators handled at least 10 cases for one company from 2010 to 2014. With no rules against conflict of interest, companies will choose friendly arbitrators who, records show, often have an economic incentive to rule in favor of the company.

When asked to intervene, courts have often stated that their hands are tied and the decision cannot be overturned.

Although many companies provide a 30 to 45 day opt-out period, many people do not, mostly because they do not realize they have signed a contract that includes an arbitration clause or because they do not know the potential consequences of such a clause.

The Harms to the Plaintiff

The New York Times reported a number of instances of forced arbitration in which claims for elder abuse, wrongful death, nursing home negligence, discrimination, fraud, theft and hate crimes were unfairly harsh to plaintiffs. Often, the plaintiff walks away with large legal bills and no justice for their suffering.

The problem is especially harmful to the elderly in nursing homes, where more than 100 cases of elder abuse, wrongful death and nursing home negligence were forced into arbitration between 2010 and 2014. Often these wrongdoings are kept hidden from prospective residents and family members.

The personal injury attorneys Milwaukee at Pitman, Kalkhoff, Sicula & Dentice, S.C., have strongly supported a petition calling for the ban on forced arbitration agreements in nursing home admissions contracts. We believe that these contracts fail to protect the rights of the elderly by preventing them from being able to seek the legal assistance they deserve.

We encourage everyone to carefully read all contracts and to understand how arbitration clauses can potentially hurt you if you need to sue a company for negligence or wrongdoing.