Grab a copy of a contract you have recently gotten from a business or corporation,
and give it a quick look. Do you notice anything wrong? Probably hard
to say, since most corporate contracts are written with legalese so dense,
it is intentionally geared to deter the average person from reading the
whole thing. Out of this mess of words, a huge problem has arisen for
consumers, employees, business owners, and just about everyone in between.
Corporations have been using the term we “may elect to resolve any
claim by individual arbitration” in their contracts, typically stuffed
away somewhere near the back. From American Express and travel websites
to AT&T and even
Taco Bell, corporations from coast to coast are utilizing these nine words in just
about every contract they create. While it may seem innocuous, this actually
means that it is impossible for people to create a class action against
Why is this a problem, you understandably ask? Imagine trying to paddle
against a tsunami in nothing but a canoe. That is exactly what it is like
for individuals who need to file a lawsuit against a corporation that
is backed by vast, seemingly endless resources. Without the ability to
create a class action, the scales are inherently unbalanced.
To put it into perspective, take an example of someone suspecting that
they have been overcharged by their cellular provider by $500. They can
try to sue for that money, but if they lose, they have to pay for the
corporation’s court costs and attorney fees – prices that
are sure to range
well into the thousands. Rather than risk sinking themselves into bankruptcy
over a “comparatively” small amount of money, they opt not
to take the matter to court. The belief is that this opens the window
for huge corporations to regularly swindle countless people out of a few
hundred dollars or less without
any fear of legal backlash.
Is There a Fix on the Way?
The New York Times, in a study they conducted (which may be viewed in full
here), 134 of 162 cases in 2014 brought against corporations backed the validity
of these controversial arbitration clauses. That percentage is staggering.
82% of the time, courts are ruling in favor of huge corporate bodies and
not the average American. With such a statistic in place, it does not
appear like a change is going to come from the courts – not soon anyway.
On the other side of the story, many corporations insist that individual
arbitration created by these clauses is both fair and easier for everyone
involved, including their clients. There is also a commonly held belief
in the corporate world that class actions are simply too powerful. Once
formed, no company can protect themselves from the damages sure to ensue
from a successful class action.
What do you think? Do corporations need these clauses to protect themselves?
Or are people being exploited due to their lack of funds and free time?
If you have more questions about class actions – or if you think
you might need to file one in after suffering a preventable
personal injury caused by a
dangerous product – you can
contact our Columbus injury lawyers at Rourke and Blumenthal today. We are always ready and willing to help
those in need by putting our 75+ years of combined experience to good