Arbitrate

You’ve likely heard the terms “arbitrate” or “arbitration” before.  Arbitration is when parties with a dispute (perhaps over a contract, labor issue, etc.,) agree to allow a neutral 3rd-party (or parties, perhaps a panel of arbitrators) to decide how the dispute should be resolved.  This decision is binding on the parties and usually cannot be appealed.  It’s not uncommon that a lot of contracts you sign (cell phone, car rental, pest control services, etc.,) have an arbitration clause in them.

Arbitration can be helpful because it is often a more cost-effective means of resolving a dispute, for reasons including that the rules of evidence are relaxed and the time required to present each side’s case in an arbitration is usually significantly less than that required for a presentation to a jury.

However, it can be limiting to the parties.  It means you are waiving your right to a trial in front of a judge or a jury.  It also means your tools for gathering evidence, including documents and depositions (a process called discovery) may be severely limited.  The reality of most arbitration clauses is that they can provide a significant benefit to a corporation, while limiting the consumer.  For example, T-Mobile has filed a motion to compel arbitration in a federal case pending in Maryland.  Plaintiffs in the case allege that T-Mobile is using the arbitration clause to prevent a class-action lawsuit.

Generally, courts give a lot of deference to arbitration clauses and if a party files a Motion to Compel Arbitration, the court may very well grant it.  Always review contracts closely and understand what rights you’re giving up when you sign.