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Arbitration Clauses: How Corporations Avoid Going to Court

Have you ever taken the time to actually read your Verizon or Time Warner Cable contracts? Or did you, like millions of other Americans, simply sign the agreement trying to get out of the store as quickly as possible? You might be surprised how one-sided it actually is.

Many large corporations are trying to avoid having to go to court when consumers of their product have a complaint. To accomplish this, they are placing arbitration clauses into their contracts. An arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process, and they generally look like this. The main difference between the arbitration process and the court system is it strips the consumer of their right to a jury trial.

Arbitration is an out-of-court proceeding in which a neutral third party arbitrator hears evidence and then issues a binding decision. Courts like arbitration because it relieves them of the burden of having to hear another case on an already overcrowded docket. Corporations like it provides them with a quick and easy way to resolve disputes in a venue that is generally corporate-friendly. More importantly, corporations like arbitration clauses because it prevents consumers from joining together and filing a class-action lawsuit.

In the medical malpractice world, we often have to deal with these clauses in cases involving nursing homes. When placing a loved one in a nursing home, the family’s primary concern is with the care and treatment of that person, not whether or not there is a binding arbitration clause in the paperwork. Please be cognizant of everything they try to slip into the contract, and contact us if you think you might have a claim.

For more information about how arbitration clauses are stripping consumers of their right to fight back against large corporations, check out this New York Times article.