Working With Great General Attorneys

Don't Be Misled By These Two Mandatory Arbitration Myths

by Maurice Moore

Companies like arbitration because it's cheaper than defending a lawsuit. As a way of strongarming customers and employees into using it to resolve legal issues and abiding by the outcome, some companies circulate misinformation about the process. Here's the truth behind two myths about mandatory arbitration to help you decide how to handle your personal injury lawsuit. 

There's No Way Out of Mandatory Arbitration Agreement

When you sign a contract that includes a mandatory arbitration clause, you may be led to think you won't be able to use any other recourse to settle your dispute with the company. While this is true in some cases, like with everything in life, there are exceptions to the rule.

For instance, in some states, mandatory arbitration can only be used in cases where damages are under a certain amount (e.g. $100,000). In situations where damages are estimated to exceed the limit, the plaintiff(s) will have the option to ignore the mandatory arbitration clause in the contract and use other methods to resolve the dispute.

Other exceptions that invalidate mandatory arbitration clauses include cases that involve sexual harassment or sexual assault, lawsuits litigated in small claims courts, and disputes where the plaintiff is a servicemember or a dependent of one.

There may be other exceptions depending on where you live and the details of your case. You should consult with an attorney to determine if you qualify for any of them and then work out how to proceed with your case if you do.

You're Stuck with the Outcome

The defendant in the dispute wants you to accept the decision of the arbiter in your case, especially if the person decides in their favor, so you may be told that you can't challenge the outcome of the mediation. However, this is only true if a person voluntarily agreed to the process or binding arbitration is used.

In some states, if the plaintiff is forced to use mandatory arbitration or non-binding arbitration is used, then the person can appeal the decision in regular court. Additionally, federal law lets plaintiffs appeal decisions in cases—binding or non-binding—where they can prove the arbitrator was corrupt, biased, or engaged in misconduct.

For instance, if you go through the arbitrator's decision history and see that they always sided with the defendant, you may have a case for bias and can appeal the decision on those grounds.

Contact a personal injury attorney for more information.