I recently posted that obtaining a jury is getting more and more difficult in civil cases. Well, Monday, the process began where it might become more difficult to even get a Judge. On Monday, August 15, 2016, an order was entered in a workers compensation case in Shelby County Alabama for the case to proceed to arbitration. You can read the Order here. So, do we need to just abolish our civil judicial system? We could simply have private arbitrators in every case. What would be wrong with that? It would save a lot of tax dollars.
Well, I’ll tell you what’s wrong with that?
1. It violates the U.S. Constitution – 7th Amendment provides a right to trial by jury in all civil matters over $20. Strict Constitutionalists always want to follow the Constitution until they don’t. If we are guaranteed a right to trial by jury, how can we have arbitration?
2. Arbitration prevents public awareness and precedent. When cases are arbitrated, they are not of public record, and therefore, they are done in a cloak of secrecy. In addition, any arbitration rulings do not create precedence for future cases.
3. Arbitrator Bias – While I will not impugn all arbitrators, we do live in a capitalistic system. The American Arbitration Association, JAMS, and other arbitration companies are in business to make money. Arbitrators get paid and would like to have more arbitrations. Individuals typically have zero to one arbitration in their lifetimes. Companies may have many. Who has the potential to provide more business to the AAA or JAMS? companies or individuals? If an arbitrator is awarding large verdicts in individual cases, do you think companies will use them?
4. Citizens v. Corporate interests – The Court provide individuals a right to fight the largest corporations in the world for wrongdoing. Why do insurance companies, banks and financial institutions want arbitration? It limits their accountability, and they are afraid of what 12 ordinary citizens might do if the light is shined on them. We have procedures in place to check outrageous verdicts (see the remand rate of the Supreme Court of Alabama over the last 10 years). But, arbitration keeps their actions private.
5. Expense – while arbitration companies argue arbitrations are less expensive and quicker, such is not always the case. Filing a lawsuit in Jefferson County with a jury costs approximately $500. The most recent arbitration I have been involved in cost $2,000 to file. The Judge is free in Jefferson County. The arbitrator charges hourly. Depositions are taken in both forums, so they cost the same.
I’m sure there are many more reasons arbitration is really not good. In one case we had at Lewis, Feldman and Lehane, LLC, I filed a case with no jury demand. The knee jerk reaction from the defense attorney was a Motion to Compel arbitration. The Judge was offended. He asked the defense attorney, “Why do you want to spend all that money on arbitration when I can arbitrate it for free?” We ended up staying in court and settling the case.
What do you think of arbitration?