Sunday, October 12, 2008

We Must Eliminate Star Chamber Sessions

"Star Chamber" sessions - maybe not quite as extreme as pictured at left, however, the outcome is just as assured - have played a key role in this financial crisis as well as the Iraq war. This type of tribunal also wields its arbitrary power in our every day lives.

We, the people, as consumers and/or employees, are normally unaware that we have signed binding mandatory arbitration (BMA) clauses (a for-profit backroom process of settling disputes), that require us to give up our rights to sue the companies - and the right to a jury trial - we do business with, if these companies cheat or treat us unfairly. Essentially, consumers and employees are railroaded into arbitration. It's a "rigged game in which justice is dealt from a deck stacked against consumers."

Haliburton, and many large corporations force employees to sign this type of contract, and the credit card industry is notorious for trapping consumers into private arbitration.

Public Citizen, a national non-proift public interest organization found that big business is pushing pre-dispute BMA in an effort to substitute the "star chamber", whose sole purpose will the execution of the credit card company's functions, for the open trial justice we're guaranteed access to by the Constitution. This is a deliberate strategy, by big business interests, who are fully aware that the liability will always fall on the consumer.

So, barred from bringing claims to court, victims of abusive lending practices, abusive employers, abusive credit card companies etc., frequently find that their contracts require them to go through arbitration. Not only are these proceedings conducted in secrecy, with very limited evidence and scarce documentation, the victims also pay excessive costs only to receive results guaranteed to benefit the company who has engaged in abusive tactics.

It works much the same way in the legal industry. Negligent, unscrupulous and incompetent attorneys know they have legal consumers at their mercy. In many states, there is virtually no recourse for victimized legal consumers because as a 2006 American Bar Association survey found, out of 123,927 complaints, only 3.5% led to formal discipline and less than 1% resulted in disbarment. I happen to reside in one of the worst states for lawyer and judicial accountability and believe me when I tell you it takes a "Tom Capano" act to get disbarred in this state, and even then, you better have clear video and a dozen eyewitnesses to back you up.

“A series of United States Supreme Court decisions have changed the meaning of the [Federal Arbitration] Act so that it now extends to disputes between parties of greatly disparate economic power, such as consumer disputes and employment disputes. As a result, a large and rapidly growing number of corporations are requiring millions of consumers and employees to give up their right to have disputes resolved by a judge or a jury, and instead submit their claims to binding arbitration.” (1)-S. 1782, Arbitration Fairness Act, Sec. 2 (1), 110th Cong. (2007)
Sen. Russell Feingold [D-WI] introduced the Arbitration Fairness Act of 2007.
The bill declares no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Exempts arbitration provisions in collective bargaining agreements from this Act.


Michael Hart,  18:22  

I've run up against this myself and it's infuriating because it's impossible to detect with the naked eye. This process completely insulates itself from exposure to the public and our laws or lack of laws allow this to happen.

Corporations which have no conscience anyway can operate without any fear of our court system interfering...much like what is happening in our economy with the derivatives market.

There are absolutely no safeguards to protect the people built in to binding mandatory arbitration. There is only one reason it exists and that's to protect corporations. The for profit arbitrators make up the rules and always apply them in favor of the business.

Consumers have to PAY for hearings and PAY for copies of documents, transcripts, etc and usually it's not cheap.

Due process is non existent.

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