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Forced Arbitration -The Third Rail of Consumer Complaints

This year, the National Railroad Passenger Corporation (known to most as AMTRAK) provided service to nearly 32 million American passengers across more than forty-six states. Generating 3.4 billion dollars in revenue,) employs more than twenty thousand people and provides the foundation for commuting across most large metropolitan areas.

This year also marked the beginning of a new policy at AMTRAK in which the public-private corporation (which relies heavily on federal subsidies to continue operations) enacted a sweeping anti-consumer policy mandating forced arbitration every time a passenger alleges negligence or wrongdoing on its part. This forced-arbitration clause is now tucked into the fine print of every rail ticket (did you know you were supposed to read the fine print on your train tickets) and effectively bars consumers from bringing their complaints before a judge or jury. This prohibition covers all manner of claims from personal injury and wrongful death to routine complaints about ticketing. It also eliminates the possibility of a class action in which passengers could band together to bring address smaller complaints that would be financially unfeasible as individual claims.

In arbitration, disputes are handled outside the traditional court system through a process in which decisions are made by private judges. Parties are given limited ability to investigate their claims, seek relevant documents, or take depositions. The purported benefits of arbitration are that it saves both parties time and money by avoiding the expense normally associated with litigation. However, these mostly illusory benefits are far outweighed by two massive and systemic disadvantages for individual consumers.

First, before a passenger can bring a claim in arbitration, he or she must commit to paying for at least half of the cost of the private judge….an expense that can easily run into thousands of dollars. This means that proceeding will be impractical or impossible for smaller claims or those in which the passenger simply cannot afford to advance this large expense. On the contrary, the traditional justice system is predicated upon the belief that anyone, rich or poor, should have access to the courts to redress wrongdoing.

Second, while traditional judges are randomly assigned in arbitration, the parties have to agree on the identity of the person that will decide their case. Again, this sounds like it would be a benefit, but the appeal of choosing your judge is illusory because while most claimants will probably only file a single complaint in their lifetime…the railroad will have an endless stream of claims against it. Arbitrators who side with passengers too often (or for too much) will obviously not be agreed-to by AMTRAK in the future. As a result, the private judges have an economic interest in siding with the railroad most of the time.

In light of these disadvantages, it is little wonder that forced-arbitration clauses result in fewer claims and lower awards for potential claimants. The end result is that this massive corporation, which exists only as a result of taxpayer dollars, is less accountable to the very people it serves and the very taxpayers who fund its existence.

The law firm of Lesser, Lesser, Landy & Smith, PLLC has been serving victims of negligence and corporate wrong-doing for more than 95 years. We operate in state and federal courts as well as in arbitration proceeds throughout Florida. If you have been injured due to the actions, or inactions, of another, it is important that you consult a qualified law firm that has the knowledge and experience to preserve your rights.

This blog is written by Attorney Joshua Ferraro.

Palm Beach County: 561-655-2028
Martin County: 772-283-6839
Toll-Free: 1-877-LAW-LLLS

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