Do you remember the disclaimers on radio advertisements? There’s an ominous voice that follows the deal quickly explaining all of the things that are not actually included with the “deal.”
Then something goes wrong. The product fails; the service is subpar; someone has taken your money and failed to deliver on the promise.
Now you will want to focus on what options you may have to seek redress. You find what at first glance appears to be a mandatory arbitration clause that requires you to pay the expenses and maybe even the company’s attorneys’ fees for the arbitration. You fear that those costs would easily exceed your claim. This seems unfair and infuriating. Take a deep breath. All hope is not lost.
First, you’ll want to check whether the arbitration clause covers the complaint that you have against the company. If it does not apply to your situation, then you’re back to considering your legal options without the burden of a forced arbitration. This is wonderful news. You may have the opportunity to pursue your claim against the company in an open court with a jury of your peers. This should be a huge relief since forced arbitration creates unnecessary hurdles for you, including the loss of the ability to have a public trial and other procedures that can help you advance your claim.
Second, the company may have overreached by trying to force you to pay the expenses for an arbitration. That’s why you’ll want to carefully review the language in the clause. For example, you should check the rules that have been specified. Most arbitration clauses specify that the rules of the American Arbitration Association (the “AAA”) will apply. The AAA has requirements to protect consumers: the cost of the arbitration must be reasonable, the dispute must be resolved in a reasonable time and the hearing must be held in a reasonable location; and notice that the consumer may resolve the dispute in small claims court (claims that are less than $3,000).
There may be other legal problems with the arbitration clause; the company may have specified the wrong rules to apply (commercial instead of consumer); and while unlikely given the current policy towards broadly enforcing arbitration clauses, the agreement may be against the public policy of your specific state or subject to an exemption from arbitration. For example, contracts of employment of workers of workers engaged in foreign or interstate commerce.
Third, you should reach out to an attorney to discuss your legal options. You may be able to negotiate a resolution before needing to resort to any legal forum. The attorney will review the clause, make sure it complies with state and federal law and advise you regarding your options.
Whatever you do; don’t just give up. The company’s failure was never part of the deal.
If you’re facing a possible arbitration, then you should consult an attorney. The Lydia Floyd Law Firm represents clients in litigation and arbitration proceedings. You can feel free to call or email The Lydia Floyd Law Firm today.