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Arbitration: What are the Drawbacks?


Buried in many types of contracts, is a hidden provision which could severely jeopardize your ability to recover damages, should you be injured in an accident. It’s called an arbitration provision, and you may have signed one without ever knowing it.

Contracts With Arbitration Clauses

There are some situations when you sign contracts, which limit your ability to sue. If you engage in extreme sports, go on cruises, ice skate, golf, or do any other similar activity, you likely signed a form that made you promise not to sue.

But in addition to promising not to sue, you may have also signed an arbitration provision, which says that should you be injured, you cannot go to court, in front of a jury the way that you normally would. Rather, you agreed in the contract that you would take your claim to arbitration.

What is Arbitration?

Arbitration happens outside of court, and without a jury. Arbitration is like a mini, relaxed, informal trial, which on the surface, seems like a great idea. But it’s not.

Your case will be heard and decided by an arbitrator, who may be a professional, but will usually not be an elected or appointed judge, who has taken an oath under the law, the way an actual, sitting judge does. The arbitrator may not even have legal experience—he or she may be some other kind of professional.

But not only is that arbitrator not a judge, and not sworn to the same oaths and promises that an actual judge is, but the arbitrator also isn’t a jury. That means that your case won’t be heard by a jury of your peers.

Getting the Evidence You Need

Arbitration has other disadvantages, for an injured consumer.

Because arbitration is supposed to go faster, and be less costly, it can limit your ability to get the information from the other side that you need to win your case. Discovery may be very limited—your attorney may not be able to get the documents or take the depositions that he or she needs to prove liability or damages.

Like any legal procedure, arbitration is supposed to be fair to both sides. But arbitrators, and arbitration companies, are private, for-profit businesses. If you are suing a large company, or an insurance company, and that company has a lot of cases with the arbitration company, whereas you may have only one case with that arbitration company in your entire lifetime, the arbitration company has a vested financial interest in pleasing the Defendant that gives them continuing business—not you, with your one time case.

Arbitration is Final

The arbitrator’s decision is also final. If you don’t like it, or you think there was an error, you have almost no ability to go to a “real court” and complain, or to have a “real judge” hear your complaint about your arbitration.

Questions about mediation or arbitration? Call the Knoxville personal injury attorneys at Fox Farley Willis & Burnette, PLLC, for help today.




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