SEN. FEINGOLD, REP. JOHNSON INTRODUCE MEASURE TO PRESERVE CONSUMER JUSTICE
Arbitration Fairness Act 2007

Download or listen to audio from the press conference introducing the legislation.

July 12, 2007

Washington, D.C. – U.S. Senator Russ Feingold (D-WI) and U.S. Representative Hank Johnson (D-GA) today both introduced comprehensive legislation in the Senate and House, respectively, to ensure Americans are not forced into mandatory arbitration agreements to resolve employment, consumer, franchise or civil rights disputes. The bicameral Arbitration Fairness Act of 2007 amends the Federal Arbitration Act to make pre-dispute agreements to arbitrate employment, consumer, franchise, or civil rights disputes unenforceable.

“Arbitration can be a fair and efficient way to handle disputes, but only when it is entered into knowingly and voluntarily by both parties,” Feingold said. “People from all walks of life – employees, investors, homeowners, those enrolled in HMOs, credit card holders, and other consumers – often find themselves strong-armed into mandatory arbitration agreements. We need to make sure that all Americans can still have their day in court.”

"For consumers, mandatory arbitration is an albatross. And despite what companies may say, it' is not more affordable than going to court, should not require consumers to travel to an appointed location for arbitration, should not contain hidden costs, should not threaten complainants with a 'loser pays' proposition to discourage them, should not shorten the notification period, or block class action status, as some clauses do," said Congressman Hank Johnson.

"Consumers Union thanks Senator Feingold and Congressman Johnson for leading the charge to protect consumers from mandatory binding arbitration. In doing so, we will be restoring justice and fairness to the system and putting consumers on a more even playing field in disputes with far more powerful corporate interests," said Sally Greenberg, Senior Product Safety Counsel for Consumers Union.

"With mandatory pre-dispute arbitration privatizing our civil justice system - a system we fought a revolution for - fairness in the marketplace is undermined and consumers are denied any remedy for fraud and deception," said Public Citizen President Joan Claybrook.

Arbitration is billed as an inexpensive alternative to civil lawsuits. The opposite, however, is often the case. Filing fees and other expenses in arbitration can result in much higher costs for the parties than civil actions. Attorneys’ fees, whether hourly or based on a contingency, are similar regardless of forum.

The Feingold-Johnson bill is supported by a host of consumer advocate organizations including Consumers Union, Public Citizen, American Association for Justice, Center for Responsible Lending, Consumer Federation of America, Homeowners Against Deficient Dwellings, Home Owners for Better Building, National Association of Consumer Advocates, National Consumer Law Center (on behalf of its low income clients), National Consumer Coalition for Nursing Home Reform, the National Employment Lawyers Association and Public Justice.