Whether buying a car, getting a credit card, or signing up for cellphone service, consumers increasingly are asked to sign an agreement that requires them to go to arbitration rather than sue in the event of a dispute. Franchisees and vendors for large corporations, too, encounter similar agreements.
Proponents say mandatory arbitration is quicker and cheaper than going to court.
But critics contend the process isn't always fair.
Trial lawyers -- who often don't participate in arbitrations -- are behind legislation they say will create a level playing field for consumers, small businesses and franchisees in disputes with corporations.
''We're trying to bring fairness back to the process,'' says Frank Petosa, president of the Florida Justice Association, a Tallahassee group representing trial lawyers.
But business groups counter that the bill is designed to take away incentives for going to arbitration.
''This is going to push arbitration cases to the courthouse, and the only beneficiaries are going to be attorneys,'' said William Large, president of the Florida Justice Reform Institute, a Tallahassee lobbying group comprised of business interests. Given the budget shortfalls impacting state courts, he said, barriers to arbitration shouldn't be erected.
In an arbitration, the dispute is heard by an arbitrator or a panel of arbitrators who render a binding decision that can't be appealed.
The Florida Justice Association argues that in arbitration consumers often can't have legal representation and have no ability to learn facts that would help prove their case, while most corporations have their own attorneys. Plus, it claims arbitrations rarely are cheaper than civil court for consumers.
PROVISIONS
Among some of the provisions of the bill, sponsored by Sen. Ted Deutch, a Boca Raton Democrat whose district includes a portion of Broward County, are:
• Any arbitration notice must state the parties are entitled to representation.
• Corporations would have to disclose arbitration expenses, including filing fees, and the cost for arbitrators and hearing rooms.
• Any arbitration organization that administers 10 or more consumer arbitrations a year would have to disclose: the number of times a corporation has been party to an arbitration by the firm; whether the consumer was represented by a lawyer; how the case was resolved; the amount claimed and the amount awarded, and the name of the arbitrator and his fee.
• Arbitration awards can be tossed if the ``award is not supported by substantial evidence.''
''The idea is to ensure the system isn't so heavily weighted against the consumer,'' said Deutch, a lawyer. A similar bill by Jacksonville Republican Charles McBurney, a lawyer, was filed in the House on Thursday.
The legislation doesn't sit well with some businesses and arbitration firms.
''If the bill is enacted, it would mark Florida as a state hostile towards arbitration,'' wrote Roger Haydock, managing director of the National Arbitration Forum, a Minneapolis firm that administers arbitration, in an e-mail. Some provisions of the bill would make arbitration more expensive, time-consuming, and treat the process as a ''junior varsity trial court,'' he said.
Fort Lauderdale's AutoNation, the country's largest dealership group, said in an e-mail: ``This appears to be an effort by self-interested lawyers to advance their own interests.''
While proponents say arbitrators are often retired judges, the Florida Justice Association's Petosa countered that arbitrators aren't always impartial -- sometimes they are lawyers who have previously defended companies.
Petosa cited a study last year by Public Citizen, the group founded by consumer advocate Ralph Nader, that found a major arbitration firm ruled against California consumers in 94 percent of the cases involving credit card companies. ''You're really not being put before a fair tribunal,'' Petosa said.
The National Arbitration Forum responded that consumers prevail in arbitration at a rate equal to or greater than if they went to court.
NOT FAR ENOUGH
Leo Gomez, a Coral Gables consumer lawyer, said the bill doesn't go far enough.
''The basic problem is that under a system that allows one party to impose an arbitrator on the other party, it creates an incentive for the arbitrator to be favorable to the party that gives it repeat business.'' Therefore, he said, both sides should have to agree to arbitrate.
Federal legislation was introduced last summer to make predispute mandatory arbitration agreements unenforceable. The bill hasn't gotten beyond subcommittee hearings, however.
