MINNEAPOLIS, June 6, 2008
Media Stories Move Forward Political Agendas Designed to Challenge the Arbitration System
For over 80 years arbitration administrators and the independent and distinguished arbitrators who decide arbitration cases have been committed to the administration of a fair and neutral process of out-of-court dispute resolution. Any fair and balanced assessment of their body of work shows they have been remarkably successful.
Rather than attacking critics of arbitration who benefit most from lengthy court battles, the National Arbitration Forum welcomes the opportunity to explain the real story of arbitration: dedicated and expert neutrals deciding cases outside of the lawsuit system, producing the same outcomes as court, and saving time and money for all parties.
There are those who would like to see all disputes remain in the lawsuit system. In fact, the financial model of many law firms relies upon the time consumed in the legal process and, even worse, on the potential for irrationality in the lawsuit system. This story is not new.
In 2000 the Washington Post published a feature story, Win Some, Lose Rarely? Arbitration Forum's Rulings Called One-Sided, containing exactly the same attacks on arbitration, backed by the same interest groups. The attacks were not true then and are not true now. In fact, immediately following the Washington Post story, the court in Marsh recognized the character and quality of the arbitrators who decide cases filed with the FORUM. The federal judge stated: "[The FORUM] boasts an impressive assembly of qualified arbitrators. In addition to being required to apply applicable law in an arbitration hearing, each member of the arbitration panel must take an oath to follow the [FORUM] Code of Procedure, the Code of Conduct, and the prevailing ethical and professional standards." Marsh v. First USA Bank, 103 F.Supp.2d 909, 925 (N.D. Tex. 2000).
The National Arbitration Forum's mission is to provide affordable access to justice to all parties, and courts reviewing the FORUM arbitration process have consistently been impressed. For example, a federal judge in California recently concluded that the FORUM "is without question an inexpensive, efficient and convenient forum for resolving commercial disputes." Provencher v. Dell, Inc., 409 F.Supp.2d 1196, 1198 (C.D. Cal. 2006).
Even the United States Supreme Court has praised the FORUM's arbitration program: "[N]ational arbitration organizations have developed similar models for fair cost and fee allocation...They include National Arbitration Forum provisions that limit small-claims consumer costs." Green Tree Fin. v. Randolph, 531 U.S. 79, 95, n.2 (2000).
Today's BusinessWeek article, Banks vs. Consumers (Guess Who Wins?), contains numerous inaccuracies and paints an unfair and distorted picture of the role that arbitration plays in our civil justice system. Perhaps most disappointing is the fact that BusinessWeek elected not to include a single one of the numerous consumers who offered to provide testimonials on the fairness and simplicity of FORUM arbitration.
The article is largely based on the assessment of former West Virginia Supreme Court Justice Richard Neely that the FORUM lacks "impartiality." BusinessWeek’s heavy reliance on Neely demonstrates that special interests are the driving forces behind the article. Consider this quote from Neely’s 1998 book.
"As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone's else money away, but so is my job security, because the in-state plaintiffs, their families, and their friends will reelect me....It should be obvious that the instate local plaintiff, his witnesses and his friends, can all vote for the judge, while the out-of-state defendants can't even be relied upon to send a campaign donation." Richard Neely, The Product Liability Mess: How Business Can Be Rescued From the Politics of State Courts 4, 62 (1998).
Also included are quotes from a deposition given by former FORUM arbitrator Elizabeth Bartholet questioning the fairness of the FORUM’s process. The article did not mention Bartholet’s admissions in the same deposition that she felt no pressure from the FORUM to decide cases in a certain way, and that she was "sure [subsequent arbitrators] would be given instructions to decide cases fairly and impartially."
Further, BusinessWeek reported statistics deliberately manipulated in order to sensationalize the story and to advance a specific political agenda of those who benefit most from keeping these types of cases in the courts. Research clearly indicates that arbitration outcomes are the same as court outcomes for similar types of cases. In fact, in some areas individuals such as consumers fare better in arbitration than they do in court litigation. See Arbitration - A Good Deal for Consumers, Peter B. Rutledge, U.S. Chamber Institute for Legal Reform (April, 2008) ("Whatever the measure, most research suggests that individuals as a whole achieve superior results in arbitration than litigation").
Finally, BusinessWeek failed to describe how these cases are handled in a lawsuit system that is often too overburdened to protect consumers from intimidation, confusion and expense. That story is accurately documented and detailed in an award winning series of articles published by the Boston Globe in 2006 titled Debtors' Hell. Comparing these two stories demonstrates that arbitration is the cure rather than the culprit.
Forcing all consumer disputes into court would divert precious judicial resources away from important criminal, civil, and family cases at the same moment in time that court budgets are being squeezed by state legislatures. It is clear that arbitration’s efficiencies benefit not just the disputing parties, but taxpayers as well.
Like all Americans, we are deeply concerned by the rising number of homeowners and consumers who are unable to meet their financial challenges. Arbitration is not the problem, arbitration is the solution. Arbitration provides a quick, fair and efficient method to reach a settlement that benefits all parties.
For more facts on arbitration read The Benefits of Arbitration Report.
About the National Arbitration Forum
The National Arbitration Forum (FORUM) is a world leader in dispute resolution. The FORUM provides fair, affordable, and accessible civil justice to all through recruitment, selection and management of a highly experienced and distinguished panel of over 1,600 former judges and seasoned lawyers. Expert FORUM arbitrators and mediators apply reasonable rules and substantive law to resolve disputes. The FORUM is the faster, lower cost and superior alternative to litigation, that ensures parties receive the same outcomes they would in court. www.adrforum.com.
Media Contact
Christina Doucet
media@adrforum.com
952-516-6486
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