History in the making

11 December 2015

The law is not static. It changes and evolves as society changes. So a Museum dedicated to the law is not, and cannot be static, locked in time, and frozen.

Even now history of law is being made. And the American Museum of Tort Law exists to document, curate and mark these developments.

The recent NY Times series on the widespread insertion of mandatory arbitration clauses into all sorts of contracts was a remarkable look at the way that forced arbitration deprives people of their day in court, and tilts the playing field in favor of corporate defendants. That alone was a historic moment in legal journalism, and highlighted a significant change in the field of law.

But the story does not end there.

On December 10, 2015 a coalition of 31 consumer, civil rights, and citizen groups sent a petition to seven major corporations, urging them to abandon the “forced arbitration” clauses in basic contracts. These groups included Public Citizen, the National Association of Consumer Advocates, Consumers Union, and many others. The corporations who have received these petitions are American Express, General Electric, JPMorgan Chase, Sears, Citigroup, Toyota and Discover Financial Services.

The letter states, in part

These contract terms strip American consumers and workers of the right to hold corporations accountable in a court of law. Instead, their claims are funneled into private arbitration that favors the corporation. For example, corporations write the arbitration rules, including choosing the arbitration firm and location for the proceeding. The forced arbitration system encourages arbitrator bias in favor of the more powerful party. Meanwhile, arbitrators’ decisions are rarely appealable, even in a situation where an arbitrator makes a clear error.

Particularly harmful are forced arbitration clauses that prevent individuals from joining their claims together to seek accountability for wrongful corporate actions that cause widespread or systemic harm. For these consumer harms, such as small-dollar illegal charges on customers’ monthly bills, class action bans prevent those affected by the misconduct from banding together to seek redress. The inordinate costs of pursuing these claims individually means the wrongdoing goes unchecked and the aggrieved are left without remedies. Meanwhile, the illicit business practice risks wider damage to the marketplace and the economy.

The letter concludes by urging these corporations to “consider the advantages of being on the right side of history,” by stopping the use of forced arbitration. Will this letter be effective? Will it suffice to halt this practice, which takes dead aim at access to the courts?

Time will tell. Two things are certain: the law will continue to change, grow and adapt; and the American Museum of Tort Law will be there, to educate, inform and inspire American citizens about the benefits of tort law, and trial by jury.