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Binding Mandatory Arbitration
and Access to Courts

Today most Americans are bound by at least one mandatory, pre-dispute arbitration clause. Buried in the fine print of a billing insert, employee handbook, health insurance plan, or dealership or franchise agreement, these clauses waive one's right to access the courts, diverting cases to a costly private legal system that favors defendants.

Arbitration clauses are achieving their intended purpose of undermining consumer protection, civil rights, and other laws that level the playing field between big businesses and individuals. The individual is left with no choice but to waive these rights, because arbitration clauses are presented on a take-it-or-leave-it basis.

You may have already signed away your right to hold companies or your employer accountable in court!

Read Our Reports

Fine Print(7/29/08) The Arbitration Debate Trap: How Opponents of Corporate Accountability Distort the Debate on Arbitration

The U.S. Chamber of Commerce has painted a grossly inaccurate picture of the empirical evidence on binding mandatory arbitration, a comprehensive study issued today by Public Citizen reveals. In this type of arbitration, consumers lose their right to settle disputes in court and instead are routed to a private, secretive system that favors the company.

 

(9/27/07) The Arbitration Trap: How Credit Cards Companies Ensnare Consumers

This report details how arbitration firms and credit card companies enjoy a cozy, mutually beneficial relationship at the expense of consumers they force into binding mandatory arbitration. Using data from California, the findings provide a glimpse of how arbitration traps consumers throughout the country in unfair, secret proceedings where for-profit arbitrators make the rules. Public Citizen's research uncovered consumers who spent years fending off collection agencies, cleaning up identity theft messes and struggling to bounce back from credit rating hits.

  • Read the report [pdf]
  • Read the press release 
  • Read Public Citizen's rebuttal to industry's misleading statements about the report.
  • Learn ways to protect yourself
  • Read the statement of Joan Claybrook, Public Citizen President
  • Read the statement of Laura MacCleery, Director of Public Citizen's Congress Watch
  • Read the statement of Troy Cornock, victim of binding mandatory arbitration
  • Read the blog
  • Examples of BMA clauses from MBNA (April 2006) and JPMorgan Chase & Co. (2005)
  • NAF California data Jan. 2003 to Mar. 2007* [Excel file]

    *This spreadsheet consists of the information on 33,948 National Arbitration Forum cases conducted in California between Jan. 1, 2003 and Mar. 31, 2007. It was compiled from quarterly reports that the National Arbitration Forum posted in a difficult-to-find place on its Web site in Adobe Systems’ Portable Document Format (PDF). Public Citizen converted them to an Excel spreadsheet so California residents and others interested in binding mandatory arbitration may do their own analysis of NAF arbitrations in California and of the records of NAF arbitrators.
     
    The PDF reports can be found here. To reach the reports from the NAF home page, click on the Focus Areas link across the top of the page beneath the NAF logo, and then click on “Consumer” on the drop down menu. On the consumer page, go to the “Resources” menu on the right side of the page and click on "California CCP 1281.96 Report."

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