Signing Away Your Right to Sue; In Significant Legal Shift, Doctors, Gyms, Cable Services Start to Require Arbitration

Wall Street Journal
Wednesday, October 1, 2003

It is a tough choice: Give up your legal rights -- or forget about joining a gym, getting a cellphone or even seeing your doctor.

In an effort to fend off lawsuits, a growing number of companies, including Comcast Corp. and Inc., are asking consumers to agree to "mandatory arbitration" and waive their right to sue the company if a dispute arises.

These binding arbitration clauses have been standard in credit-card and stock brokerage contracts for years, but they are now migrating into the fine print of everyday consumer services, including cable TV, cellphones, online retailers, gyms, auto financing firms, travel agencies and summer camps.

Even more jarring to some consumers: While health-maintenance organizations have long required arbitration, some private doctors -- in an effort to rein in medical-malpractice claims -- are making patients agree to arbitration before they receive medical care.

Many consumers don't realize they have agreed to arbitration until they have a problem, since the clauses are typically tucked into contracts or described in "bill stuffers" that accompany monthly statements.

Critics say these agreements force consumers into a second-rate justice system with no jury and few opportunities to appeal. The proceedings are usually private, which means companies are spared bad publicity, and there often is no public record. "The corporate world understands this as a way to subvert the jury system and get tort reform in a way they have not been able to do through state legislatures," says Joanne Doroshow, executive director of the Center for Justice & Democracy in New York.
For a copy of the complete article, contact CJ&D.

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