Arbitration

Arbitration – “till death do you part” may apply in marriage, but does not apply in arbitration. On February 13, 2009 our Texas Supreme Court issued an opinion (In Re Labatt Food Service, L.P. – No. 07-0419)which held that an arbitration provision in an agreement between a person who died on the job and his employer was binding upon his heirs even though they did not sign the agreement. The court concluded that the arbitration clause was binding and the decision as to whether even the agreement itself was enforceable would have to be decided by the arbitrator. The original concept of arbitration was one of cost savings in terms of reducing the expense of lawyers, discovery and time to get an issue resolved. It has instead proven to be as, if not more expensive and take longer than litigation without any of the safeguards built into our civil justice system. I am a firm opponent to arbitration and have huge concerns regarding the uneven playing field before a single arbitrator or panel that is selected by the parties. One concern is the appearance of bias when one party regularly appears before the arbitrator and the other has only one case. Also the decision of the arbitrator is generally final without recourse or appeal, whereas in trial you present your case to a jury from your jurisdiction. That jury’s decision is based upon the law as administered by the Court and if warranted either side can appeal the decision. My advice is not to agree to arbitration. If arbitration language is included in an agreement strike it out before signing and if the other side insists on the arbitration language you have to decide if it is worth the loss of your rights under our justice system. Also ask yourself if they want arbitration so bad, they must have a reason to believe it will benefit them and not provide an equal playing field. The time to deal with an arbitration clause is before you sign the agreement because, as our Supreme Court has held, even death can’t get you out of them once it has been signed. As always I welcome your comments.