Checking the Power of Corporations and the Dangers of Mandatory Arbitration

Power and control can be a dangerous thing. History demonstrates that the more power an individual or an entity has, the greater the risk that power will be abused. This is why it is so important to avoid granting too much authority to a single entity in nearly any aspect of our society.

Most people first learn about the concept of checks and balances in elementary civics classes. After all, our entire governmental system is built around checks and balances, with the various branches of government (Judicial, Legislative, Executive) meant to prevent one single branch from committing abuses of power.

Checks on power, however, can also be applied to other areas of society.

Journalists, for example, help hold the government accountable as a whole and work to inform the populace so that we can use our democratic system to avoid having our rights trampled upon.

The US Securities and Exchange Commission is intended to help keep Wall Street in check and avoid abuses of the stock market.

And trial lawyers serve as a vital check on corporations.

Perhaps that last example is not as obvious, but it is absolutely no less important than the others. The roles and functions of a trial lawyer in the business world in fact help to hold corporations accountable for their actions.

The fact is that money is power, and large corporations have a LOT of money. Such wealth and power oftentimes provides corporations with the ability to exert their will and force their wishes on individuals and smaller businesses. It is in situations such as these that trial lawyers are so important.

Outside of court, the playing field is most certainly not equal between major corporations and small businesses or individuals. But in court, when a case goes to trial, the playing field becomes equal. The law is the law, and it does not name favorites based on wealth. To do so is nothing less than corruption.

Trial lawyers give regular people access to court so that they can plead their case against a corporation and work to hold corporations accountable to the law.

Unfortunately, many corporations have attempted to circumvent this check on their power by way of mandatory arbitration. Corporations will force consumers and other businesses to sign contracts that include clauses stating that, should any legal dispute occur, the case must go to arbitration rather than litigation.

Arbitration is a form of alternative dispute resolution (ADR) meant to keep a legal dispute out of court. It does not adhere to the rules of civil procedure and evidence, and rulings—which are normally binding—are made by supposedly impartial arbitrators after they have heard the case.

In essence, anyone agreeing to mandatory arbitration is agreeing to give up their fundamental right to utilize the US legal system and hold corporations accountable for their actions.

Corporations love arbitration because it always puts them at an advantage over “the little guy.” By keeping the case out of court, they can legally keep the dispute private, which protects their reputation and further prevents you from using public pressure to hold the corporation accountable. In mandatory arbitration, the corporation also sets the rules of procedure as well as deciding how an “impartial” arbitrator will be chosen. This essentially rigs the dispute in favor of the corporation.

You should always think carefully before signing any sort of mandatory arbitration agreement with a large company. Your ability to utilize a trial lawyer and the court system as a check on the power and authority of major corporations is at risk, and that is not something you should ever give up easily.

Share this on...Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Email this to someone

Written by Carla D. Aikens

Carla D. Aikens

After years of working for large law firms on major corporate cases, Carla D. Aikens chose to go out on her own and found her own firm because she is passionate about helping people of whom others have taken advantage.