What do real estate sales contracts, uninsured motorist policies, and credit card applications all have in common? Binding arbitration clauses. If a controversy arises, the aggrieved party must go through binding arbitration; they cannot go to court to obtain satisfaction after a wrong. It is no wonder corporations, insurance companies, banks, and employers are eliminating the right to a jury trial and thus access to justice for all people by demanding binding arbitration clauses. While arbitration may be economical in issues pertaining to small amounts of money, arbitration is also rife for corruption.
For instance, if you purchase Kaiser medical insurance, you give up your Constitutional Right to a jury trial if a controversy arises over your medical treatment. If an issue arises, you must go through mandatory arbitration. In such mandatory arbitration, a judge is selected to hear the case and render a decision. Guess who the judges are that Kaiser gives you to decide the case? Kaiser keeps a list of judges from which you must select. Certainly no judge who has rendered a decision against Kaiser in the past will be on the list. Certainly no judge who wants to have any Kaiser arbitrations assigned to him/her in the future will be on the list. Kaiser selects and pays the judge; how do you think you will get a fair trial?
What if you find yourself in a binding arbitration and the arbitrator makes a decision that is obviously contrary to law and the facts? Do you have any recourse to review the arbitration award in the courts? The answer is NO. See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1: “an arbitrator’s decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.”
Thus, arbitration provides judges that are often bought and paid for by one side and after a decision that is illegal or not based on true facts, there is no recourse to attempt to achieve justice. Why would you agree to such an onerous term?