The Truth about Mandatory Arbitration

In our last post on Things You Need to Know About Arbitration, we covered that Arbitration is a type of alternative dispute resolution that takes place outside of court. After reviewing the presentation from both sides, the arbitrator will make a final, often binding, decision. Unlike in trials, this decision does not have to be based on the law. A trial is one of your amendment rights and is a judicial examination and determination of issues between parties to action, whether they be issues of law or fact. The case concludes when the jury (or judge if there is no jury) reaches a verdict.
It is important to note that there are two types of arbitration, voluntary and mandatory. In voluntary arbitration, both sides in the dispute voluntarily agree to submit their disagreement to arbitration after it arises and after they have an opportunity to investigate their best options for resolving their claim.  In our last blog we touched on Mandatory arbitration. This type of arbitration is the one where you sign your right to a trial by jury away.

Abc News issued a Consumer Alert with tips for consumers on what to do if you
encounter a Mandatory arbitration clause:

  • Read contracts thoroughly to see if they contain a mandatory arbitration clause.
  • Opt out of mandatory arbitration if you can. There may be a time limit to opt out, so don’t delay.
  • If you cannot opt out and cannot find an alternate company to do business with, write on the contract: “I object to this mandatory arbitration clause, but am signing this contract because I am told I have no choice.” Initial the statement.
  • If you receive a notice from, say, a credit card company or insurance company notifying you of changes to your contract, resist the urge to toss it. Read it and start the process again.
  • If a company files an arbitration case against you, never ignore it. Respond promptly in writing and send your response certified mail.

Other Media Coverage of Mandatory Arbitration
Do you remember the case of the elderly woman who spilled a cup of hot McDonalds coffee in her lap and how it became national headlines after a jury awarded her $2.7 million in punitive damages?  The national media took the information and spun it many different ways – many times painting the elderly woman who was injured as greedy, clumsy and out for McDonald’s money.  In other words, the media failed to tell the whole story and why McDonald’s was punished by the verdict.   Why did McDonald’s have to pay so much? Well, they opted for a trial by jury.  In the HBO documentary, Hot Coffee, the arbitration process was dissected and reviewed, along with the McDonald’s Hot Coffee case.
The documentary accurately reports that the plaintiff suffered third-degree burns, skin grafts and spent eight days in the hospital.  The show points out how the media neglected to tell you that the coffee was so hot that the Styrofoam cup begins to melt at the 187° temperature. People interviewed where shocked when they saw photographs of the woman’s burns.  They could not believe that a cup of coffee could be that hot or do so much damage. They changed their opinions and understood why the verdict was what it was.
What do I do if I’ve inadvertently signed an arbitration agreement?
The personal injury attorneys at Edwards & Ragatz, P.A. routinely challenges these arbitration agreements based upon there one sidedness and lack of understanding our clients have of what they are signing.   We see clients on a daily basis who are shocked and surprised when we inform that how they signed away their rights to a jury trial when they first were admitted to a nursing home or when they signed an authorization when they first went to their physician.  We have to show them the document which is usually several sentences in fine print.  The majority of time, we are told that they were not told or educated what they were signing but were told that all of documents must be signed or they could not be treated.

Tom Edwards, one of the partners here at Edwards & Ragatz, has recently argued these exact points and more to the highest court of Florida, the Florida Supreme Court.  (Read more at  In Franks v. Bowers, Ms. Franks brought a medical malpractice and wrongful death lawsuit against Dr. Bowers after the death of her husband.  Dr. Bowers argued Mr. Franks had signed an arbitration agreement when he first sought medical care. The trial court ordered arbitration and the First District Court of Appeal upheld that ruling   On behalf of Ms. Franks, we appealed the ruling to the Florida Supreme Court and oral arguments were done in October 2012 .  If you would like to learn more about the arguments, you can read all of the briefs and court documents filed with the court in the Franks case.  You can view the oral arguments here.

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