Have you ever read the fine print of your credit-card agreement? How about the receipt for the TV you purchased? Your apartment lease? If you do, you may find that the fine print requires you to give up your right to sue if you have a complaint about the transaction and, instead, participate in arbitration.

Arbitration is similar to a private court, where, instead of presenting your complaints to a judge, you present them to an arbitrator. Arbitration has been around for years and has long been used by large companies to resolve business disputes. Arbitration is also not all bad--it allows parties to resolve their disputes privately, it allows sophisticated businesses to agree in advance on the ground rules for resolving disputes, and it is sometimes a faster means to resolution.

However, in the past decade or so, the number of businesses requiring that all disputes against them be arbitrated has exploded. Although arbitration works well in some contexts, it is usually a bad deal for consumers, for several reasons. First, it is expensive. Unlike in a court (where you do not need to pay the judge for the time he spends hearing your suit), in arbitration you not only pay for your lawyer but you also pay for the arbitrator, who is usually a lawyer and whose services cost hundreds of dollars per hour. Second, the deck can be stacked against the consumer. Arbitration clauses frequently require the arbitration to occur in a distant city or to be conducted by an arbitrator who is a member of a group seen as being "business friendly." Finally, since companies are the ones to set the ground rules for arbitration, the rules themselves are often unfair to consumers, requiring them to give notice of their dispute within an unreasonably short period of time or precluding their lawyers from taking any depositions to learn about the facts of the case.

Unfortunately, arbitration agreements are usually enforced by the courts. Be sure to read carefully the fine print of business agreements to determine if you will be bound by arbitration.

If you're concerned about your rights in arbitration, don't hesitate to contact our office for a free legal consultation. 

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