Cyrus Dugger

Why You Should Be Afraid of Mandatory Arbitration Agreements

An issue which has not yet been touched upon on in detail on Tort Deform is the horrible effect that mandatory arbitration provisions often have on unsuspecting consumers.

Mandatory arbitration agreements are perhaps one of the most dangerous developments within the American civil justice system. In short, a mandatory arbitration agreement is a contract which bars an aggrieved consumer from seeking redress in the nation's courts.

Unbeknownst to most Americans, corporations are making these mandatory arbitration agreements a part of an increasing amount of contracts. From credit card agreements, to pest control contracts, to home construction contracts mandatory arbitration agreements are becoming more and more common (if not the norm).

Well, luckily this issue will never effect you because you haven’t agreed to any mandatory arbitration agreements as a part of any contracts.


Most people who are bound by these agreements don’t even realize it because they were actualized by the inclusion of a small slip of paper in their contract materials (which is often crunched into all the other manuals and things you receive when you buy a relevant product or service).

You don’t even have to sign anything, your mandatory binding arbitration agreement just states that if you continue to use this product or service you will be bound by it.

Silence thus becomes acceptance.

Below is an introduction to the very personal consequences these mandatory arbitration provisions as told by Ms. Jordan Fogal of Houston Texas.

You Are Responsible For Making So Many Homeless We will take action on voting day By Jordan Fogal Houston, Texas

What is going on is criminal and all other platforms pale when you are responsible for making so many of us homeless.

I have written the president 2 letters, 348 emails and sent 76 faxes..before we lost our homes with many of our neighbors and no one even bothered to answer.

We have filed over 12,000 claims to the Attorney Generals office, just in TEXAS and the Attorney General nor the District Attorney have chosen to take action. We ... and all our neighbors and all the people in Texas who read the national articles about what is happening to make us homeless will take action on voting day.

Tort reform has destroyed our families doubled our foreclosure rate and look at the bankruptcies....

We can tell you what is wrong with the economy!

You have destroyed our credit ratings and made us homeless. And we, the middle class are being destroyed.

Arbitration from the prefix ar- to arrive and traitor-to betray another’s trust.

My husband and I are still in the arbitration process.

We have been having depositions, preparing documents, time lines...many going back to April of 2002, and getting all ready for discovery.

It is a monumental task. As the builder and AAA, the American Arbitration Association know - it is also cost prohibitive ... no matter what kind of spin they try to put on arbitration being
cheaper than court, my husband and I write the checks and we know better.

This is why most new homeowners with defective houses, repair their own homes ... even though they have warranty papers - those slick booklets that are enclosed in the decorative folders they hand in
exchange for your checks.

If their defects are extensive they are forced into foreclosure , and many into bankruptcy. Houston's foreclosures have more than doubled in one year and the numbers are not accurate.

Arbitration: Is the privatization of the "justice" system that is FOR the protection of bad builders.

It assists shoddy builders, with bulging pockets, preying on the public. It is easy to see why all the ads, for new homes and the multitude of thrown up housing is so rampant. There is no protection
for the purchaser. You are paying for eye candy, these houses will never make the historical register.

So far we have paid over $10,000 dollars in arbitration costs for the privilege of being made homeless in Houston, and this is just the beginning. New home buyers are suppose to buy and shut up. And you had better shut up or under the new laws you are considered a "dispute" and will be dealt with accordingly by the builders, their lawyers and if necessary the arbitration process.

You are not going to be a repeat offender in AAA. You will be broke after one visit. The builders will be back .

Now, ask yourself ... if you were an arbitrator would you rule against your continuous meal ticket or against one poor homeowner who will probably never be able to afford another home in their lifetime?

Do you think if perhaps the arbitrator ruled in favor of a new homeowner that they would be chosen by the builder as an arbitrator ever again?

Do you know that law firms like the one defending my builder have an AAA arbitrator in the firm.

Do you think if you go to AAA and get our builder's AAA arbitrator.... he will rule against his biggest client and in YOUR favor? These are just thoughts to ponder.

Tort Reform

My husband and are seeing how tort reform really works, up close and personal. I refer to tort reform as the deformed privatization of the justice system.

keep reading article

If you or your organization is interested in learning more about or working on these types of civil justice issues, please feel free to contact me at

Cyrus Dugger
Senior Fellow in Civil Justice
Drum Major Institute for Public Policy

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Posted at 5:46 PM, Oct 04, 2006 in Insurance Industry | Mandatory Arbitration
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