How do corporations improperly avoid class actions in consumer litigation?
In the early 1900’s congress passed a law called the “Federal Arbitration Act.” This law which was intended to apply only to merchants engaged in interstate commerce at the time it was passed, is now in the 1990’s being used as a weapon against consumers. Arbitration was intended to be a process whereby equally sophisticated businessmen could negotiate an agreement with each other to submit any dispute they might have to an independent third party for resolution instead of a court. The theory was that as to businessmen, the law should permit an alternative method for them to quickly resolve their differences outside of court. The fact is that most businesses engaged in such transactions have lawyers on retainer or on staff to negotiate such agreements, they fully understand the ramifications of arbitration, and the terms of the arbitration are agreed to by parties of equal bargaining strength. Corporations are now using the same law to abuse the American consumer.
In the early 1900’s congress passed a law called the “Federal Arbitration Act.” This law which was intended to apply only to merchants engaged in interstate commerce at the time it was passed, is now in the 1990’s being used as a weapon against consumers. Arbitration was intended to be a process whereby equally sophisticated businessmen could negotiate an agreement with each other to submit any dispute they might have to an independent third party for resolution instead of a court. The theory was that as to businessmen, the law should permit an alternative method for them to quickly resolve their differences outside of court. The fact is that most businesses engaged in such transactions have lawyers on retainer or on staff to negotiate such agreements, they fully understand the ramifications of arbitration, and the terms of the arbitration are agreed to by parties of equal bargaining strength. Corporations are now using the same law to abuse the American consumer. Contracts with arbitr
