Mobile Personal Injury Lawyer - Arbitration

How Do You Feel About Tort Reform? It Depends On How you Feel

Pete Mackey — Sat, 19 Sep 2009 21:28:39 GMT

Feelings about tort reform can vary with the landscape. Anyone who makes their policy decisions primarily in accordance with their financial bottom line, and happens to be on the white collar side of the equation, loves tort reform - as long as it does not affect their pocketbook. Damage Caps? Check. Insanely short statutes of limitation? Roger that. Arbitration? Of course.

Howard Bronson, the former publisher of the Mobile Press-Register since 1991, has seen the light. The man who carried all the water for the tort reform movent that he could, who made sure that his newspaper railed against what he saw as "jackpot justice" and "runaway verdicts," who never saw a punitive damage award that was justified, has done a one eighty. After being shown the door, he has filed suit against the owner, claiming that it reneged on a job security agreement made when he started with the paper. Way to go, Howard! Are you trying to make good law for life time employment contracts? Did you ask for punitive damages? Do you think that maybe it's time to recognize that "what's good for GM is what's good for America" may not be the catch phrase you thought it was? Ask Robert Bork - he had to make the same decision.

Originally posted at InjuryBoard by Pete Mackey

Arbitration Clauses and Consumers

Gaines Drago — Wed, 02 Sep 2009 11:07:12 GMT

Arbitration clauses are a huge aspect of many of our largest purchasers as consumers. Whether it is a mobile home, a car, or an entertainment center, many companies now have customers sign a contract that will require them to arbitrate any controversies that may arise from the purchase of a product. The Supreme Court has indicated a strong presumption of favor towards arbitration, so the following are just a few key pointers to realize about arbitration when deciding whether to make the final purchase. While, arbitration, is in no way all bad just please make sure you read thoroughly all the way through a contract you sign. The following just offers a few key points that consumers may not be aware of:

· Arbitration agreements are sometimes contained in ancillary agreements, or in small print in other agreements, and consumers and employees sometimes do not know in advance that they have agreed to mandatory binding pre-dispute arbitration by purchasing a product or taking a job
· If the arbitration is mandatory and binding, the parties waive their rights to access the courts and have a judge or jury decide the case
· In some arbitration agreements, the parties are required to pay for the arbitrators, which adds an additional layer of legal cost that can be prohibitive, especially in small consumer disputes
· In some arbitration agreements and systems, the recovery of attorneys' fees is unavailable, making it difficult or impossible for consumers or employees to get legal representation; however most arbitration codes and agreements provide for the same relief that could be granted in court
· If the arbitrator or the arbitration forum depends on the corporation for repeat business, there may be an inherent incentive to rule against the consumer or employee
· There are very limited avenues for appeal, which means that an erroneous decision cannot be easily overturned
· Although usually thought to be speedier, when there are multiple arbitrators on the panel, juggling their schedules for hearing dates in long cases can lead to delays
· In some legal systems, arbitral awards have fewer enforcement remedies than judgments; although in the United States, arbitration awards are enforced in the same manner as court judgments and have the same effect
· Arbitrators are generally unable to enforce interlocutory measures against a party, making it easier for a party to take steps to avoid enforcement of an award, such as the relocation of assets offshore
· Rule of applicable law is not necessarily binding on the arbitrators, although they cannot disregard the law.
· Discovery may be more limited in arbitration
· The potential to generate billings by attorneys may be less than pursuing the dispute through trial
· Unlike court judgments, arbitration awards themselves are not directly enforceable. A party seeking to enforce an arbitration award must resort to judicial remedies, called an action to "confirm" an award
· Although grounds for attacking an arbitration award in court are limited, efforts to confirm the award can be fiercely fought, thus necessitating huge legal expenses that negate the perceived economic incentive to arbitrate the dispute in the first place.

Originally posted at InjuryBoard by Gaines Drago

Is Justice is Second Fiddle to Arbitration?

Billy Cunningham — Sat, 15 Aug 2009 12:56:51 GMT

Maybe arbitration involving consumers is beginning to run its course. A recent post by Wayne Parsons describes Bank of America’s decision to stop forcing arbitration on consumers. Wayne cited David Robertson’s belief that Bank of America's decision was a result of the recent decisions by the National Arbitration Forum and the American Arbitration Association to stop hanlidng consumer arbitrations as well as by increased congressional scrutiny. These changes in attitude are most likely a direct result of the Minnesota’s Attorney General’s law suit and subsequent settlement with the National Arbitration Forum to not be involved in consumer arbitration. Under the settlement, the National Arbitration Forum is prohibited from accepting, participating or administering any new arbitrations involving consumer debt, including credit cards, consumer loans, telecommunications, utilities, health care and consumer leases.

There is another issue in the arbitration arena that should concern everyone. In most arbitrations involving interstate commerce (which includes almost anything these days) the Federal Arbitration Act (FAA) controls. The Act lists four grounds to vacate an award issued by the arbitrator(s). For years courts also recognized non-statutory grounds for vacating an arbitration award, such as where the award exhibits a “manifest disregard of the law.”

Last Spring In Hall Street Associates, L.L.C. v. Mattel, Inc., the United States Supreme Court held that the statutory grounds are the exclusive means for vacating an arbitration award under the FAA. Does that mean we can have rules of law for the court system but arbitrators who do not violate the statutory grounds like showing bias, corruption, and fraud can just ignore the law? We should all be concerned if that is the case. Lower courts are beginning to interpret and apply the Hall Street decision and are coming to different conclusions as to whether manifest disregard of the law remains a proper basis to overturn an arbitration award.

I have a hard time after 35 years of practicing law believing that our courts cannot overturn an arbitration award that manifestly disregards the law. This is especially true in a consumer setting where most consumers never realize that had even signed arbitration agreements or know what arbitration means. It is time organize to get Congress to amend the FAA and include manifest disregard of the law and say to the American public everybody has to follow the law! Justice should not play second fiddle to arbitration.

Originally posted at InjuryBoard by Billy Cunningham

No Arbitration in Nurisng Homes Cases In Illinois

Billy Cunningham — Fri, 05 Jun 2009 13:05:06 GMT

In the case of SSC Odin Operating Co. v. Carter, Sue Carter the U. S. Supreme Court on June 1, 2009 by refusing to review an Illinois appellate court ruling, has tacitly agreed that a state law nullifying nursing home arbitration agreements supersedes the Federal Arbitration Act which favors arbitration agreements. This may be another chink in the arbitration armor used by nursing homes to force residents and their families to give up their rights to a jury trial.

The state legislature of Illinois had the wisdom to recognize that arbitration clauses in nursing home contracts are unconscionable and passed the Illinois Nursing Home Care Act (NCHA) which has provisions prohibiting the facility from enforcing an arbitration agreement. Apparently, despite the law, Odin Healthcare Center in Odin, Illinois required Joyce Gott to sign an arbitration agreement agreeing that in event she or her family wanted to pursue a claim against the nursing home there would no trial but instead the dispute would be decided by arbitration.. Her family recognizing that the legislature prohibited such agreements filed a wrongful death claim in state court. The nursing home operator asked the trial court to enforce the arbitration agreement and argued that the Federal Arbitration Act should overrule any state law governing arbitration agreements, especially in light of the fact that the NHCA applies to nursing home contracts in a broad and more generalized way, rather than specifically singling out arbitration agreements. A state appellate court ruled that the NCHA applied and struck down the arbitration clause. The Illinois Supreme Court refused to review the decision in October of last year. With its refusal to hear the case, the U.S. Supreme Court has let the lower court's ruling stand, thereby setting a precedent under which other states' laws might trump the Federal Arbitration Act.

The failure of the Supreme Court to consider this case should give those of us who believe the right to a jury trial is right granted to us under the constitution, have family members in a nursing home and/or who represent nursing home residents cause to rejoice. This is the way it should be. As I have written numerous times in blogs on InjuryBoard, arbitration is just not designed for consumer situations and most especially should not apply to the elderly in nursing homes. We have opportunities to use this ruling to show other sates how it can be done and to urge Congress to get the Fairness in Nursing Home Arbitration Act passed.

Originally posted at InjuryBoard by Billy Cunningham

Fairness in Nursing Home Arbitration Act Does Not Become Law

Billy Cunningham — Sat, 30 May 2009 09:05:53 GMT

In January I wrote a blog on S. Bill 2838, Fairness in Nursing Home Arbitration Act. This bill never became law. The last action taken by the Senate on the bill was in September when it was reported favorably out of committee and then on October 1, 2008, it was placed on the Senate Legislative Calendar under General Orders. Calendar No. 1109. This bill has now been proposed in previous Sessions of Congress last two years. At the end of each session all proposed bills and resolutions that haven't passed are cleared from the books. The bill was never debated by the Senate. This means the bill will have to be reintroduced under a new number in the next session.

The bill was sponsored by Sen. Mel Martinez [R-FL] and co-sponsored by Sen. Patrick Leahy [D-VT], Sen. Russell Feingold [D-WI], Sen. Richard Durbin [D-IL] and Sen. Herbert Kohl [D-WI]. I would urge all you to contact your Senators and Congressmen before the next session and urge them to get this bill reintroduced and passed.

Nursing home abuse continues and arbitration is not the way to handle these cases. When loved ones are put in nursing home today the facility often presents a series of documents to be signed in order for the family member to be admitted. Often stuck in the middle of all those is an arbitration agreement. I have never seen one drafted that is designed to favor or even equally treat the resident. Those agreements are signed by residents with dementia who do not have the capacity to enter into any other kind of contract. Or they may be signed by a family member who does not have a power of attorney or court appointment authorizing them to enter into contracts on their behalf. The nursing home does not care who signs them- it is just part of a process. That process is not in the best interest of the resident. I have seen forged signatures on nursing home arbitration agreements and had one facility admit it forged the signature.

One way to protect against this happening is for everyone to have a power of attorney that prohibits the attorney in fact from entering into any contract that has an arbitration clause or agreement in it. Here is an example of the clause that should be in every power of attorney:

“NO POWER TO AGREE TO BINDING ARBITRATION. Although I have given my attorney-in-fact this general and durable power of attorney, I specifically withhold from my attorney-in-fact the power to agree or consent to binding arbitration, or to agree to any other process that would preclude the right to have a jury decide any issue in controversy concerning my person or my property; this does not, however, preclude non-binding alternative dispute resolution processes such as mediation. “

There are things we can all do to protect our loved ones in nursing home. Let’s start a letter writing campaign now to get the Fairness in Nursing Home Arbitration Act reintroduced and passed.

Originally posted at InjuryBoard by Billy Cunningham

ABA to Consider Resolution Curtailing the Arbitraiton Fairness Act

Billy Cunningham — Mon, 04 May 2009 09:00:00 GMT

Paul Bland, a staff attorney with Public Justice in Washington, D.C. and a leading advocate for consumers is asking attorneys who are members of the American Bar Association to contact colleagues about a proposed ABA resolution asking Congress to limit the proposed Arbitration Fairness Act.

The Arbitration Fairness Act, H.R. 1020 would end mandatory arbitration in consumer contracts we are compelled to sign when we purchase almost any service or product today -- from a cell phone to a new house. It would also cover long-term care contracts. The bill is sponsored by Sponsored by Rep. Hank Johnson (D-GA). It will be introduced in the Senate by Sen. Russ Feingold (D-WI). There is another bill that I have blogged on in the past: the Fairness in Nursing Home Arbitration Act, which. applies to nursing homes, assisted living, and other residential care facilities. Sponsored by Sen. Mel Martinez (R-FL) and Sen. Herb Kohl (D-WI); and Rep. Linda Sanchez (D-CA).

Mr. Bland advises that he just learned that the "Leadership Council" of the ABA Section on Dispute Resolution, has without notice to members adopted a resolution regarding the AFA. While no one outside the Section to his knowledge has seen a written version yet, he advises the resolution effectively says the AFA goes too far and instead endorses an alternative approach that would allow mandatory arbitration if and only if (1) consumers et al are given a pre-dispute chance to opt out and (2) Congress passes legislation regulating the fairness of the mandatory arbitration. The Section intends to put this resolution before the full ABA, in August, and seek approval from the ABA at that time. Such a resolution, if adopted, would then be part of the Chamber of Commerce, insurance companies, big business et al lobbying efforts.

Everyone knows the "opt out" right has proven to be a joke. Many credit card companies put "opt out" rights in their consumer contracts (as a ploy to block unconscionability challenges, by permitting them to argue that the clauses are not adhesive), and because so few consumers (a) read the fine print; (b) understand what this language and idea is about; and (c) are motivated to take affirmative steps to opt out, only the smallest percentage of consumers notice the “opt out” and act upon this right.

To the lawyers reading this, it is difficult to understand how the the American Bar Association could allow itself to be support a proposal that some corporations have been advocating for years as a way to undermine meaningful civil rights and consumer protection action. It's disheartening, to believe the ABA could be a party to such an explicitly anti-consumer resolution. Certainly, this is not in the public interest. This resolution will be considered at the ABA meeting in August. There is not a lot of time to organize a push against it, but forums like the InjuryBoard blogs and law firm blogs are great places to start.

As Mr. Bland stated in his email : “IF ANY OF YOU HAVE ANY INFLUENCE WITH THE ABA AND YOU'D RATHER NOT SEE THE ABA SIDING AGAINST EMPLOYEES, CONSUMERS, MEDICAL VICTIMS AND SO FORTH, PLEASE RAISE SOME NOISE.”

Originally posted at InjuryBoard by Billy Cunningham

Arbitrators do not have to follow the law

Pete Burns — Tue, 17 Mar 2009 13:13:05 GMT

Arbitration is an illogical procedure for dispute resolution in our society. Arbitration clauses are buried in consumer contracts of all sorts and until you have a legal problem most people either don’t notice the clauses or assume they are a reasonable alternative to our “costly” legal system. In truth arbitration is frequently more expensive than our court system and the result dramatically less predictable.

The United States has an advanced judicial system and to abandon it in favor of arbitration makes no sense. First, our judges are either appointed by the President of the United States with the advice and consent of congress or, in Alabama, elected by the people. Neither is a guarantee of integrity but both provide dramatically more vetting and assurance than the ad hoc procedure for selecting arbitrators. AAA, the most widespread arbitration organization, gives the parties the right to deselect from a panel provided by AAA. Unlike Judges who are paid with tax dollars, arbitrators are paid $150 to $300 per hour by the litigants. In my experience arbitration is dramatically more expensive than our judicial system.

In addition to economy, predictability is sacrificed to arbitration. Judges take an oath to follow the law and if one party thinks the judge failed to do so she can raise the issue on appeal. Appeal is very restricted in arbitration and getting worse. On March 5, 2009 the U.S. Court of Appeals for the 5^th Circuit ruled in Citigroup Global Markets Inc. v. Bacon http://www.ca5.uscourts.gov/opinions/pub/07/07-20670-CV0.wpd.pdf that even if the arbitrator shows a “manifest disregard for the law that is no basis for appeal.

Why in the world do we want to sidestep a sophisticated set of laws enacted by elected officials and interpreted by qualified judges in favor of allowing some random arbitrator to do as he sees fit?

Originally posted at InjuryBoard by Pete Burns

Beware of Arbitration

Pete Burns — Tue, 10 Feb 2009 17:31:44 GMT

Arbitration is expensive and favors business over consumers. Furthermore, it is an arrogant concept based upon the notion that industry insiders are better able to deliver justice than judges and juries.

Arbitration is expensive because participants pay a private individual, or individuals, thousands of dollars a day to do the job of a judge who is paid with tax payer funds. Unlike the judge, the arbitrator has not been carefully vetted and appointed or elected through a democratic process. Instead, arbitrators are primarily industry insiders who have no accountability for their decisions – which are almost unreviewable. Rather than having a jury of your peers in arbitration the fact finder is from the same line of business as the defendant. The idea behind arbitration is that parties are free to agree to anything they like. In the abstract that is true but in the real world arbitration clauses are buried deep in contracts and seldom "agreed upon" by the consumer.

In the thirty plus years I have been practicing I have never heard a client say “Boy I am glad we had that arbitration clause.”

Originally posted at InjuryBoard by Pete Burns

The Arbitration Fairness Act Of 2009 - Get Behind It

Pete Mackey — Tue, 10 Feb 2009 16:32:00 GMT

This week, Congressman Hank Johnson from Atlanta, Georgia will introduce the Arbitration Fairness Act of 2009. This is an act which would prohibit mandatory arbitration clauses in consumer, employment and franchisee contracts. Businesses have long touted arbitration as a cheaper and more expeditous alternative to a trial by jury. Even if that were true, which it’s not, why not have your case heard by a judge, whose salary you are already paying with your tax dollars anyway? The decision maker’s cost is only the cost of a filing fee. And as for claims moving faster in arbitration and being cheaper to prosecute – do not bet on it. In our experience, defendants attempt to draw out arbitrations just like they do any other jury or non-jury matter.

Also, arbitrators are generally not neutral decision makers. The prevailing view by lawyers who handle arbitration – lawyers on both sides of the fence – is that arbitration association decisions typically favor industry. I can point you to the personal web page of a lawyer in a large, prominent Alabama firm who touts his success in arbitrations “even in an industry that is known for ‘splitting the baby’.”

Mandatory arbitration is especially unconscionable in employment contracts. Workers have so few rights to start with, requiring mandatory arbitration for those rights that they do have is just plain wrong. The unequal bargaining power held by employers, especially in this economic climate, makes it clear that such agreements are not made voluntarily (at least by the employee) or at arms length.

One of the worse aspects of arbitration is the negative effect that it has on the development of law. In our legal system, particular points of law are developed over time by one appellate court considering what another trial or appellant court has done. Arbitration is all done by behind closed doors. Arbitrators do not have to issue an opinion stating how they came to the conclusion they did and the grounds for an appeal of an arbitrator’s award are extremely narrow, at best.

Please write and call your congressman today. Let them know how this is impacting your job or your life. Let them know what the right to a trial by jury means to you. To me, it is one of the basic underpinnings of a free society.

Originally posted at InjuryBoard by Pete Mackey

My New House Is A Lemon - Will You Take My Case?

Pete Mackey — Thu, 08 Jan 2009 17:37:41 GMT

You have been in your brand new house for four months. It was kind of scary draining your savings account for the down payment and your new monthly payment is $350 more than the rent you were paying for your apartment. But now that you are in, life is good ... or so you thought.

The first thing that you notice is the faint odor you can only smell once and a while. Your spouse thinks that it is just the kids leaving wet clothes on the floor after playing in the creek out back. Then you notice some dark spots on the sheetrock on the dining room walls. You call your contractor and, after four calls and two weeks, he sends out the sheetrock subcontractor. That fellow tells you it is a roofing problem. You call your contractor again, and again, and again and ... it's three months further down the road and five different subs have told you that they didn't cause the problem. Now, you are really bent out of shape. You did not hire the subs, you hired the contractor. Your house reeks and the new contractor you have hired recommends a mold remediation company.

My contractor won't fix the problem - will you take my case?

These are some of the factors that a lawyer would look at in determining whether or not to take your case on a contingent basis:

- Does the contractor seem to operate a thriving business? If so, the odds are better that they are insured.

- Is there an arbitration clause in the contract? If there is, that may be (but may not be) a non starter, at least at our firm. Our experience is that arbitration results for consumers range from fair to horribly unfair. Arbitrators are often known to "split the baby" with their awards to insure that they will be hired in future arbitrations.

- What will it cost to fix the problem and what impact will those repairs have on your family? Minor repairs are probably better suited for small claims court. Mold remediation can be a real problem. Your case has a whole lot more value if your family will have to relocate to get the repairs done. Are the problems causing the damage building code violations? If so, they are easier for a jury to understand.

- How have you dealt with the problem? Did you do everything that you could to get the contractor to act responsibly? Did you put off dealing with the issues because you had more important things to do? Did you fail to make some minor repairs that led to greater damage?

- Some of the cases that we have handled over the years involve one major problem in an otherwise well built home, but that is not the norm. It is far more common to see a series of problems - some large and some small. This is a sign of poor supervision by the contractor of his or her subs. This is also the type of case that makes a jury angry.

The factors listed are not an exhaustive list. Hopefully, however, they give you a little more insight in what your prospective lawyer will have to consider.

Originally posted at InjuryBoard by Pete Mackey