Many commercial and consumer contracts these days include a provision waiving the right to a jury trial and many even waive the right to bring a lawsuit and require that any disagreement be decided by arbitration.
When I bought my condo five years ago one of the provisions in the contract was that I could never ask for a jury if I got into a dispute with the developer. It wasn’t that the developer was a mean guy; in fact he is very nice and I have not had any reason to have a disagreement with him. It’s just that he hired a business-oriented law firm to draw up his papers, and the lawyers do what lawyers always do: they think up every conceivable way to give maximum protection to their clients. Juries can be unpredictable, and judges’ decisions are considered more reliable for business.
Arbitration is a process by which people (or companies) resolve disputes by referral to a neutral person, often a retired judge or a lawyer or someone with particular expertise in the field, who takes the evidence presented by both sides and decides what the resolution will be. This procedure is much quicker and much less expensive than going through a trial in the courts.
The trouble is that the arbitrator must be agreed upon by both sides. This is bad news for consumers, because any arbitrator who decides in favor of a consumer and against a company will be unlikely to be hired to decide any cases involving that company in the future. The consumer will generally not be in a position to find out about an arbitrator’s previous rulings, so the company has the advantage, and arbitrators generally tend to favor companies.
An even worse evil of these mandatory arbitration clauses, though, is that consumers are barred from being a part of a class action. This means that the consumer with a legitimate gripe against a big company will have no way to get any relief unless the value of the claim is enough to warrant hiring a lawyer and pressing the claim through an arbitration process. In other words, if a person gets cheated out of ten dollars (or $50 or $100 for that matter), it would make no sense to press this complaint, because the cost of pursuing it would be greater than the amount of the claim. It is only through class actions that companies can be held responsible for wrongs which amount to only a small amount for the individual claimant, but may amount to millions of dollars of illegal profit if there are many people who are affected.
Courts have generally upheld the validity of mandatory arbitration clauses, but some have found them unenforceable, and there is a move to try to enact legislation to make them invalid.
This is getting a little bit on the techy side of the law, but I thought you might like to know about this. It’s something to look out for, although you usually don’t have much choice when asked to sign a document with a bank or a big company.