For Immediate Release:
Lawmakers move closer to restoring consumers’ rights to hold corporate wrongdoers accountable in court
Washington D.C. – The National Association of Consumer Advocates (NACA) applauds the U.S. House Judiciary Committee for approving H.R. 1423, the Forced Arbitration Injustice Repeal (FAIR) Act (on a 22-14 vote). The vote was bipartisan. Judiciary Democrats and one Republican, Rep. Matt Gaetz, voted to approve the bill. The FAIR Act would restore the rights of millions of consumers, workers, and small businesses to be heard in court when they are harmed by corporate misconduct.
Forced arbitration clauses buried in the fine print of take-it-or-leave-it contracts are used to shut consumers, workers, and small businesses out of the court system when they are harmed. Corporations instead hire private arbitration firms to oversee all claims behind closed doors, where evidence of wrongdoing can be suppressed and judicial procedure is ignored. Appeals are usually not available even when an arbitrator makes a blatant error.
In particularly egregious instances, forced arbitration clauses are even used to block individuals from banding together to seek justice against powerful corporate entities responsible for widespread, systemic harms. “As a result, financially harmed consumers and workers are left without any remedies at all. Meanwhile, the illicit business practices can cause even more damage to people, the marketplace, and the economy,” said NACA in a letter sent to the House Judiciary Committee.
The FAIR Act would not ban arbitration, but would allow consumers and workers to once again choose where and how to seek justice.
“Corporations have been using forced arbitration to rig the system and hide their illicit behavior for far too long,” said Christine Hines, NACA’s legislative director. “By approving the FAIR Act, the House Judiciary Committee has taken a very important step towards restoring our ability to access justice.”
The House should vote and pass the FAIR Act as soon as possible.