ARBITRATION IS EXPENSIVE. You have to pay to arbitrate something. Usually, you have to pay one half of the full costs of the arbitration, which can run into the tens of thousands of dollars. To file in a court of law, you pay less than $500.00.
ARBITRATION CAN BE UNFAIR. Arbitration is a business. If realtors bring an arbitrator a lot of business, the arbitrator may tend to side with the realtors. Sometimes credit card companies set up their own arbitration systems, which can be loaded against a person who owes money on a credit card.
ONE PERSON MAKES THE DECISION, WHICH IS FINAL. You cannot appeal a decision made under a binding arbitration agreement. This means that if you get an arbitrary arbitrator, you are stuck with the decision. Judges are sensitive to the possibility of being overturned on appeal, and therefore try to be fair. An arbitrator can make any decision he/she wants secure in the knowledge that no one can change his/her decision.
IN CALIFORNIA, YOU CANNOT BE FORCED TO ARBITRATE. If your credit card company or your cell phone company has made you agree to binding arbitration as a condition of using their services, you can still sue them in court. If you sue them in small claims court, you should use the following statement of California Law:
Under California Law, arbitration agreements are considered to be unenforceable if they are unconscionable and/or contracts of adhesion. The California courts have declared that “take it or leave it” agreements, required of consumers as part of accepting services, are unconscionable and contracts of adhesion. Gatton v. T-Mobil USA, Inc. (2007), 152 Cal.App.4th 571; Discover Bank v. Superior Court (2005) 36 Cal. 4th 148; Martinez v Master Protection Corp. (2004) 118 Cal.App.4th 107; California Code of Civil Procedure sections 1281, 1281.2 (b), 1670.5. The arbitration agreement attached to the claim is a “take it or leave it” agreement required as part of accepting services.
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