Arbitration v. Transparency

The American Conservative’s argument against forced arbitration in consumer contracts is a good read. Millions of consumers are signing away their right to sue in a court of law without ever having read the forced arbitration provision or even realizing that they are agreeing to a legally binding contract at all.

The forced arbitration issue has been highlighted as problematic by diverse voices from Josh Hammer to the Economic Policy Institute to Americans for Tax Reform. Ending forced arbitration should appeal to libertarians, free marketeers, and “new right” folks alike.

The article discusses basic fairness and how the law needs to evolve with the times.

Ending the forced arbitration regime altogether should be a legal issue that unites the right—and perhaps many on the left as well. These arbitration agreements are coercive to the consumers who unwittingly sign them, have created unintended consequences for businesses, and generally force parties out of courts of law and into private arbitration, subject to varied and questionable rules and procedures. Whether one wants to protect ordinary Americans against coercive big business, ensure that market transactions are clean and not burdened by unnecessary, inefficient deadweight, or simply want to make sure that people have access to courts of law, arbitration agreements are an easy target.

Recently, Arizona Attorney General Kris Mayes filed a motion to intervene in an abuse and neglect lawsuit against Senita Ridge after judge’s order moved the case to arbitration. Mayes charged that the secrecy of arbitration removes transparency in an elder abuse case which violates the state’s Adult Protective Services Act. The act requires notification when a lawsuit alleging elder abuse or neglect is filed allowing the state to track and potentially join the case.

“Moving cases behind a veil of arbitration secrecy is not only illegal, it blocks me from performing one of my most important duties — protecting vulnerable adults,” Mayes said in a release. “Transparency is key to protecting vulnerable adults, which is why the legislature enacted this reporting requirement to begin with. In this case, that important process was hidden.”

Arbitration agreements are common in senior living facilities and viewed by the industry as an effective way to resolve legal disputes. But Mayes said those agreements cross a legal line when they keep secret allegations of elder abuse.