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Report: Lighting Strike More Likely Than Forced Arbitration Win

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Monday, September 16, 2019   

SEATTLE — Tens of millions of workers and consumers have signed agreements to not sue companies and instead settle through arbitration. But a new report says they're more likely to be struck by lightning than to win a case through the so-called forced arbitration process.

The American Association for Justice analyzed data from the two largest arbitration providers between 2014 and 2018 and found that of the 60 million employees subject to forced arbitration, only 282 were awarded monetary damages. Larry Shannon, government affairs director with the Washington State Association for Justice, said the state's Supreme Court tried to bar these agreements, but the U.S. Supreme Court preempted states in 2018.

"The U.S. Supreme Court drew a road map to give immunity to these corporations by imposing these forced arbitration agreements on individual consumers and workers,” Shannon said.

The AAJ estimates there are 800 million forced arbitration clauses in effect for consumers. However only 6,000 cases are brought forward each year, with consumers winning just an average of 382 of them. Supporters of forced arbitration say it's easier and less expensive than a trial.

Julia Duncan, senior director of government affairs with the AAJ, said there are two troubling characteristics of the forced arbitration process: corporations choose the arbitration provider, and the proceedings are secretive. She said “confidentiality” means folks aren't able to speak out about what happened to them.

"Even more concerning, especially in the context of the #MeToo movement, is that other workers, other consumers aren't able to find out if other people have had similar experiences,” Duncan said. “And you see this in the cases of sexual harassment."

Shannon said there are cases when arbitration makes sense.

"We fully support arbitration and alternative dispute-resolution measures when they are entered into in a process to resolve a dispute - not before a dispute has ever arisen,” he said.

Last week, the U.S. House Judiciary Committee passed the Forced Arbitration Injustice Repeal Act, which would end this involuntary practice. A vote on the House floor could come as soon as this week.

Disclosure: Washington State Association for Justice contributes to our fund for reporting on Consumer Issues. If you would like to help support news in the public interest, click here.


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