Will An Arbitration Clause Prevent You From Filing A Personal Injury Lawsuit?

Law Blog

Could your personal injury lawsuit get derailed by an arbitration clause? It's possible. As more and more companies use arbitration clauses as part of everything from employment contracts to nursing home residency agreements, many people find themselves subject to mandatory arbitration rather than being able to rely on traditional personal injury lawsuits to resolve their disputes. Learn more about how an arbitration case can affect your personal injury claim.

Arbitration: Your Contract's Little Secret

Arbitration clauses are often hiding in plain sight inside of contracts - whether they're service contracts with your HVAC repairman or purchase contracts for your washing machine. They also often appear in employment contracts, which can require you to go through arbitration instead of traditional litigation if you're injured on the job or denied worker's compensation.

What Is Arbitration?

Arbitration is designed to move disputes out of the courthouse and into the conference room, where a neutral third party (the arbitrator) helps the disputing parties come to an agreement. Ideally, it's designed to be cheaper than traditional litigation, and usually tries to come to solution that both parties can live with, rather than having a "winner" and a "loser" in each action.

Generally speaking, it sounds like a winning proposition for everyone involved since you never know which side of a lawsuit you might be on. Unfortunately, that's not always the case.

What Are The Drawbacks?

There are several complaints about arbitration clauses in contracts, including:

1.) The hidden and forced clauses. In many cases, the arbitration clauses are both buried in the paperwork and forced, and the consumer is seldom clearly made aware of them. Even if the consumer is told of the arbitration clause, its importance is seldom clarified and consumers usually don't realize that they are signing away their right to sue.

2.) The lack of neutrality. People sometimes find out that the supposedly neutral arbitrator is actually biased to the contract's authors. Often, the contract's authors will give themselves the right to select the arbitrator - and they will routinely use a specific company that tends to give them favorable results.

3.) The mandatory agreements. Another complaint is that some arbitration clauses are mandatory, not voluntary, meaning that whatever the outcome - no matter how unfair it seems to you or if you suspect a bias on the part of the arbitrator toward the other party - the decision is final and legally binding. You lose the right to take the issue to court.

4.) The Non-disclosure clauses. Further, in many cases, you are obliged to keep the decision confidential and can't publicize the results of your case (keeping any bad press away from the company).

What Can You Do To Protect Yourself?

Unfortunately, you often have few options when it comes to arbitration clauses. Often, your choices of where to take your business if you don't want to sign an arbitration clause are limited, as more companies are using them.

However, you don't have to let yourself be bullied - hire an attorney to represent you during the arbitration process. Often, the attorney will be able to help you best present your case so that you can get a fair result from the arbitrator. The company that designed the agreement will already have lawyers working for them to present their side, and will be familiar with the process, while you aren't. Contact a local attorney, such as Swartz & Swartz P.C., if you need more information.

Finally, the presence of an attorney for your side can often help keep a less than neutral arbitrator on a more even path. If the arbitrator shows a clear bias, your attorney may be able to take the decision to court on that basis alone for an appeal of the verdict.

Every case is unique and some arbitration clauses are more binding than others. Talk to an attorney today about any arbitration clause that you may have signed to see if it will affect your ability to file a personal injury claim or not.


29 April 2015

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