By Steven G. MehtaSteve Mehta


According to a poll conducted by the Lake Research Partners of likely voters, that was published on April 29, 2009, Americans widely oppose mandatory binding arbitration clauses.   The survey reached 800 adults nationwide, 18 years or older, who are likely to vote in the 2010 elections. The overall margin of error is +/-3.5%.

The poll found that:

·         Six in 10 likely voters support the elimination of arbitration clauses unless the parties agree to arbitration after a dispute arises.

·         59 percent of likely voters oppose the use of mandatory binding arbitration clauses in employment and consumer contracts;

The poll results bolster support for the bipartisan Arbitration Fairness Act (H.R. 1020) that was introduced by Rep. Hank Johnson (D-Ga.) in the House of Representatives.  The measure seeks to ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen and not before.  The measure would virtually eliminate all pre-dispute arbitration clauses.  This measure comes on the heels of another similar proposal targeted towards the nursing home industry:  The Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237).  S. 512/H.R. 1237 introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would seek to eliminate arbitration clauses in all nursing home contracts.

Proponents say mandatory arbitration is quicker and cheaper than going to court.  In fact, more and more cases are going to arbitration and are eliminating the need to go through lengthy trials.  In support of such claims, One study reviewed 301 cases of consumer arbitration cases, all performed by the American Arbitration Association (AAA), and found consumers won some relief in 53.3% of the cases they filed and recovered an average of $19,255; business claimants won some relief in 83.6% of their cases and recovered an average of $20,648.

But critics contend the process isn’t always fair.  Critics of arbitration claim that the clauses are written by corporations to protect corporations and that it makes it harder to obtain a fair recovery for a wrong. Critics contend that although consumers may get results, they are usually much smaller than what would have been obtained by a jury.

These measures, if passed, could have a significant impact on the way justice is served.  First, many cases that are currently going to arbitration are not burdening the already overburdened court system.  As an example, California courts routinely favor sending cases to arbitration.  Currently, California’s judicial branch fields nine million filings annually, spread among more than 2,000 judicial officers, according to the state Administrative Office of the Court.  Given the budget woes that have besiged California, those judicial officers will be taxed even more.  If many cases that are now going to arbitration end back up in the courts, there could be further delays in the processing of those cases. 

On the other hand, such measures may end up giving the consumers more choices as to the method they would desire to resolve their dispute.  

In either case, these measures will be important ones to watch.