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CQ Researcher Quotes Professor Richard Frankel on Arbitration Law

Richard Frankel

March 11, 2016

Arbitration clauses that consumers and employees unwittingly accept when buying products or services or getting hired leave them without a meaningful choice for how to resolve disputes with merchants or employers, Professor Richard Frankel said in the March 11 issue of CQ Researcher.

The clauses, “online click agreements which no one reads” in which consumers and employees agree to settle disputes through arbitration instead of litigating them in the courts, are “structured in a way that it’s going to be more advantageous to a defendant than a plaintiff,” explained Frankel, director of the Appellate Litigation Clinic and an authority on arbitration agreements.

The article cites numerous Supreme Court rulings that have required enforcement of arbitration clauses in consumer and employment contracts, even when doing so contradicts state laws.

Frankel said that arbitration agreements have been “over-enforced,” in the sense that the courts have ignored generally accepted legal rules that ambiguities in contracts are resolved against the party that drafted them and that waivers of rights typically hold up only when there is a clear intent to forfeit the privilege.

Agreements barring consumers from filing class-action lawsuits mean that legitimate claims are never brought, Frankel said.

“Thousands of claims end up being squelched when you have a class-action waiver,” Frankel said, predicting that Congressional action or back pedaling by the Supreme Court will eventually become necessary.

“The controversy’s not going to go away,” Frankel said. “At some point, something's got to change.”