More Arbitration Information – And It’s Not Good For Consumers

The arbitration information below is being presented to our current and future foundation repair customers because we feel Mandatory Arbitration in foundation repair agreements is NOT in the consumer’s best interest. We feel they have a right to be informed of the facts about Mandatory Arbitration. We also believe consumers should have the right to choose and the right to sue in a court of law if they wish.

Texas Trial Lawyers

Arbitration Examples
Binding Mandatory Arbitration Leaves Consumers Without Remedy

If you think Mandatory (Forced) Arbitration is a “good thing,” then read the following link about these HORROR stories involving:

  • Credit Cards
  • Homeowners (foundation repair and other home repair disputes)
  • Healthcare
  • Employment

Click on the following link to read about these Mandatory (Forced) Arbitration examples on the Texas Trial Lawyers website

Nonprofit group Pans Arbitration / says System Stacked Against Consumers

A newspaper article that appeared in the Houston Chronicle in 2002 was titled “NonProfit group Pans Arbitration / Says system stacked against Consumers.” The article states that the advocates for arbitration claim it is a “cheaper and faster alternative to lawsuits.” Usually these advocates are companies that are selling their product or service to the consumers.

However, the article lists several cases in which the consumer faced much higher fees just to get arbitrators to hear their cases. The net result is that the consumer will often drop their complaint because of the high cost. The article cited an example in Cook County, Illinois, where filing a job discrimination claim in circuit court would cost $221. The same claim would cost the consumer / plaintiff $10,925 to be heard before the National Arbitration Forum.

In another example cited in the article, a homeowner who had recently purchased a $300,000 dream house in May 2001 claimed it was defective because of mold and toxic chemicals. Since she had purchased the new home from a home builder and signed a purchase contract with an arbitration clause, she was required to pay $24,000 just to have her case heard by the American Arbitration Association. The American Arbitration Association handles many of the consumer complaints alleging shoddy workmanship by homebuilders.

You can read the complete article in the archives of the Houston Chronicle by clicking the link below.

Nonprofit group Pans Arbitration says System Stacked Against Consumers (sorry, the Houston Chronicle moved this article and we can no longer find it in their archives)

Forced Arbitration Rogues Gallery

Expose Corporations That Are Rigging the Justice System Against Consumers

Public Citizen –

Washington Post

Customers often are Losing Rights to Sue in the fine print / Companies increasingly Require Arbitration of Consumer Disputes

In a newspaper article that originally appeared in the Washington Post, and later in the Houston Chronicle, the author uses a number of interviews and examples to point out that consumers “may be at a disadvantage.” She specifically mentioned a consumer complaint against Gateway computer. The purchase agreement required that the buyer submit any claim under $50,000 to arbitration. The price to submit his claim to arbitration was $4,000. The cost of the computer was $2,500. Obviously, the high cost to have a consumer complaint heard by an arbitration company will deter many consumers from pursuing their claims through arbitration. In addition, the arbitration price mentioned above was for the right to file the case. There are additional costs such as daily costs for human arbitrators, which can range from $600 to $1600 per day.

To contrast these costs, a consumer who wishes to file his or her case in a court of law will have to pay $80 – $100 in most parts of the country. And some lawyers are very explicit about the odds of the consumer winning an arbitration case. Oklahoma lawyer Tomme Fent said that “she usually wins these disputes in court, (but) she has never won one in arbitration.”

To speed up deliberations (or make it more difficult for consumers) arbitrators usually limit the rights of both parties to obtain documents or take depositions before the hearing. This is called the discovery process. This can put the consumers at a significant disadvantage because they will have limited ability to search for company records that establish a pattern of corporate misbehavior.

In addition, in most cases there is no appeal of an arbitration decision. And arbitration hearings are secret, unlike proceedings in a court of law.

You can read the complete article in the archives of the New York Times by clicking the link below.

Customers often are Losing Rights to Sue in the fine print / Companies increasingly Require Arbitration of Consumer Disputes

National Arbitration Forum

the following information was summarized from the
Wikipedia page of the National Arbitration Forum

The National Arbitration Forum (NAF) was founded in 1986 and provides arbitration and mediation services to businesses. It is one of the largest companies in the dispute resolution / arbitration industry and also one of the most controversial. As of this writing, they employ over 1600 paid arbitrators and mediators.

According to their web site, “The National Arbitration Forum is the faster, lower cost and superior alternative to litigation, that ensures parties receive the same outcomes they would in court.” However, numerous attorneys and consumer advocacy groups claim that the NAF is the “the most biased against consumers of the major arbitration organizations.” According to the Wikipedia web site, “Recent studies of the National Arbitration Forum arbitrations demonstrate that in arbitrations between consumers and businesses, 99 percent of the National Arbitration Forum’s decisions are in favor of the business.”

These Mandatory Binding Arbitration clauses are built into business contracts. Most Americans do not realize the extent to which these clauses have infiltrated their lives. Again, according to the Wikipedia web site, “Virtually every American who has a credit card or cell phone, or who builds a house, gets a job, or buys a computer has agreed unknowingly to settle any dispute through binding mandatory arbitration (BMA).”

The Wikipedia web site also mentions the lawsuit the city of San Francisco filed against the NAF, accusing the NAF of being unfair in disputes they arbitrated between credit cards companies and consumers for a number of years. The lawsuit said that of a total of 18,075 arbitrated cases heard by the NAF, the NAF ruled in favor of only 30 consumers. The remaining 18,045 cases were ruled in favor of the credit card companies.

Obviously these grossly lopsided numbers gain attention from consumer groups and lawmakers and there has been arbitration legislation proposed at the federal level. This legislation is be supported by the following groups:

  • Public Citizen
  • Center for Responsible Lending
  • Consumer Federation of America
  • Homeowners of Texas
  • Homeowners Against Deficient Dwellings
  • Home Owners for Better Building
  • National Association of Consumer Advocates
  • National Consumer Law Center
  • National Consumer Coalition for Nursing Home Reform
  • National Employment Lawyers Association
  • American Association for Justice

You can read this Wikipedia page by clicking the link below.

Wikipedia page of the National Arbitration Forum

U. S. Department of Housing and Urban Development

HUD’s policy on approving 10 Year Warranties permits binding arbitration as an acceptable available remedy for complaint resolution. However, the Department of Housing and Urban Development precludes (PROHIBITS) binding arbitration as the sole remedy. All Acceptable warranty plans must not limit the homebuyer to arbitration nor prohibit them from using the court system.

Other Arbitration Information pages on the Dawson web site

Death by Arbitration

Other Arbitration Information

Arbitration Myths

Mandatory Arbitration Updated

Dawson Foundation Repair does NOT have any arbitration clause in its agreements with customers. We feel that arbitration clauses are UNFAIR and designed to protect corporations and businesses from shoddy work and shoddy services. Mandatory Arbitration clauses, for-profit arbitration companies, and the arbitration process are designed to rob consumers of their legal rights and defeat the consumer – which happens more than 90% of the time.

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