Increasingly, businesses are inserting arbitration clauses into contracts with their customers in order to obtain a prompt resolution of consumer disputes. Businesses also believe that requiring arbitration will discourage frivolous suits brought against businesses (especially "target" defendants) by removing the tantalizing attraction of juries prejudiced against businesses. Businesses who desire to enjoy the benefits provided by an arbitration clause should avoid the temptation of attempting to impose unfair arbitration provisions (which could taint the arbitration clause and permit the other party to avoid enforcement of the arbitration). The most expedient way to achieve appropriate fairness is to require arbitration in accordance with an arbitration organization's rules that incorporate a process that:

  1. Will ensure neutral, impartial, and high quality arbitrators;

  2. Will not diminish any substantive rights (such as denying punitive damages);

  3. Will ensure procedural fairness (e.g., no inconvenient venues, no undue limitation periods, allow the right to an attorney, permit reasonable access to information); and

  4. Will ensure that the costs of arbitration are reasonable in relation to the type and dollar amount of the dispute.

From its inception in 1985, the procedural rules of Arbitration Service of Portland (ASP) have incorporated all of the above elements of fundamental fairness. Therefore, an ASP administered arbitration will continue to pass judicial muster against "adhesive contract" challenges, the success of which depends upon a showing of unfairness.

ASP Complies with the "Consumer Due Process Protocol"

Consumer advocates have become increasingly concerned that arbitration might be used to deny the rights and remedies of consumers. On April 17, 1998, a Consumer Due Process Protocol was signed by organizations representing diverse interests throughout the country with the goal of establishing principles of fairness for resolving disputes with consumers. The following are those principles of the Consumer Due Process Protocol that relate to the arbitration process:

  1. Principle 3 - independent and impartial neutral; independent administration (including an equal voice in selecting neutrals and procedures for disclosures and disqualifications of neutrals);

  2. Principle 4 - quality and competence of neutrals;

  3. Principle 6 - reasonable cost;

  4. Principle 7 - reasonably convenient location;

  5. Principle 8 - reasonable time limits;

  6. Principle 9 - right to representation;

  7. Principle 12 - arbitration hearings (including opportunity be heard and confidentiality);

  8. Principle 13 - access to information (discovery rights);

  9. Principle 14 - arbitral remedies (empowering the arbitrator to grant whatever relief would be available in a court); and

  10. Principle 15 - arbitration awards.

ASP's procedural rules comply with all of the principles of the Consumer Due Process Protocol that relate to the arbitration process, and ASP's rules are consumer-friendly. An acknowledged goal of alternative dispute resolution is "let the forum fit the fuss." Consumers can and do represent themselves in ASP arbitrations, and often neither side is represented by an attorney. In contrast, commencement of litigation in court almost always requires hiring an attorney. Therefore, if a consumer transaction is not blessed with an arbitration clause, a consumer whose claim is less than $25,000 is (as a practical matter) denied justice because: if litigation is required, economic reality too often forces consumers to abandon their claims because they cannot afford to risk the expense of paying an attorney.

Sample Clause

Arbitration Required. Any dispute or claim that arises out of or that relates to this agreement, or to the interpretation or breach thereof, shall be resolved by arbitration in accordance with the then effective arbitration rules of (and by filing a claim with) Arbitration Service of Portland, Inc., and judgment upon the award rendered pursuant to such arbitration may be entered in any court having jurisdiction thereof.


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