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About Arbitration

A Private Court System You Should Know About

The system you've never heard of that's in millions of contracts

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If you want to know about consumer arbitration, read on…

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WHAT IS ARBITRATION?

Arbitration is a way to resolve a dispute with a company without the formality and expense of having to go to court. It allows you to have your dispute decided by a neutral third party, rather than the company.

The “arbitrator” – the person who decides your dispute – acts like a judge and has the power to issue binding decisions about your claim.

Company contracts often name the organization that will oversee an arbitration. Most consumer arbitrations are administered by the American Arbitration Association, a non-profit.

WHO IS WHO?

The “Arbitrator” is like a judge – she or he listens to your story and evidence (and those of the company) and issues a decision about how your dispute should be resolved. The arbitrator is often a practicing lawyer or retired judge who has no connections to you or the company.

The “Claimant” is you – the person who is submitting a claim against the company.

The “Respondent” is the company that you’re filing a claim against – they are the ones who have to “respond” to your claim in front of the arbitrator.

The American Arbitration Association is a non-profit organization that administers arbitrations – they appoint case administrators and arbitrators and provide the procedural rules for the arbitration.

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DO I HAVE TO ARBITRATE?

Many companies require you to resolve disputes with them through individual arbitration. The companies listed on FairShake’s website typically include a clause in their contracts that prohibit you from filing a traditional lawsuit or joining a class action against them. (You’re still allowed to take them to small claims court.)

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DOES ARBITRATION COST ME MONEY?

This depends on the agreement between you and the company. The American Arbitration Association requires both you and the company to pay “filing fees” and cover other costs associated with the arbitration, but in many cases the company has agreed to pay all of those fees, or reimburse you for the portion that you have to pay. In addition to filing fees, you may have to pay the company’s legal fees if you file a fake or frivolous claim.

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WHAT HAPPENS IN AN ARBITRATION?

The arbitrator will listen to both you and the company and may ask you and the company to provide proof of what you each say. This may happen through emails (a “documents-only” proceeding), over the phone or, in some cases, in person. The arbitrator will then consider everything she or he has learned and will issue a decision – an order that resolves the dispute, just like in court. This order is binding and, in most cases, final.

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Can a Lawyer Help Me Bring an Arbitration Case?

Yes. While you are able to bring your consumer arbitration claim on your own (known as “pro se” in legalese), as with many legal processes it may benefit you to have the assistance of an attorney in the consumer arbitration process.

Many lawyers are inexperienced with consumer arbitration, and often won’t take claims for small dollar amounts. FairShake knows attorneys who are experienced with handling consumer arbitration cases.

If you’d like to share your issue for potential review by a lawyer, start here.

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