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How we resolve our disputes

Entries in 7th Amendment (1)

Sunday
Dec132009

All I want for Christmas is . . . Arbitration?

The House of Representatives has passed a measure that provides for binding arbitration for more than 2,000 General Motors and Chrysler dealers to fight company-ordered closings.  Illinois Senator Richard Durbin said he expects the Senate to pass the measure, too.  Durbin added that “This is a fair opportunity to resolve the disputes and to have a fair hearing, which is all these dealers have asked for.” Oh, really?  Automobile dealers just want a fair hearing?  Arbitration?  They don’t want to stay in business and continue to make money selling GM and Chrysler vehicles?  I don’t think so.  First of all, seven years ago, Congress enacted the Motor Vehicle Franchise Contract Arbitration Fairness Act, which exempted auto dealers from the Federal Arbitration Act.  Instead, the Act makes predispute arbitration clauses in motor vehicle franchise contracts unenforceable unless both parties consent after the dispute arises.  Let’s face it.  No one wants to give up their 7th Amendment right to sue in court, and have a jury resolve their case, unless they believe it would enhance their chances of winning.  Secondly, binding arbitration and litigation are the ultimate hammers in dispute resolution.  If the parties cannot negotiate a mutually acceptable settlement agreement, one of them is going to initiate a lawsuit or arbitration.  Forum shopping has long been part of the process of deciding which course to follow.  But let’s not fool ourselves.  No one merely wants a “fair hearing.”  They want to win.  Or, at least, they want leverage to help negotiate or mediate a better settlement.