How are arbiters selected?

[Stephen Tashiro]

Most credit card companies can demand that any dispute with them be settled by arbitration instead of jury trial. That same condition is probably in the fine print of many agreements that customers make with other companies. I think it also applies to class action litigation. How are the arbiters selected?

[Nike Nihiser]

it should also be in the written agreement (contract)

[Nicholas Lawrence]

Often, but not always, those agreements adopt the rules of the American Arbitration Association.

Another thing you see frequently in larger cases is the three person panel. You pick one. I pick one. The two people we pick then have to agree on the third. You are probably not going to see that with most consumer contracts though, because the amounts at stake are usually too low to justify that kind of expense.

[Bruce Wrenn]

Usually, if you read the fine print, they get to pick the arbitrator. And seldom do the arbitrators rule against CC companies. Gee, I wonder why?

[Thomas McCurnin]

The contract will usually provide a FORM of arbitration. For example the American Arbitration Association, which is a national group of mainly lawyers, but some judges. The contract will generally specify the LOCATION of the Arbitration which is usually the credit company's home state. Banks for example have their so-called headquarters in South Dakota. The contract may provide the RULES of the arbitration. For example the AAA have their own rules about how to pick the arbitrator, who pays, and the breadth of the arbitration (will depositions be allowed, for example), and often have special rules governing consumer and employee-employer relationships. Those special rules generally involve the credit company advancing all the costs, and might have the arbitration occur in the debtor or employee's home state. Three arbitrator panels are unusual, except for larger cases where the contract provides for those. Throughout the US, many company's opt out of the AAA and use private judge organizations, such as JAMS and ENDISPUTE, which are mainly retired judges.

Arbitration can be cheaper and faster than full blown litigation for smaller matters such as simple contract disputes, construction defect cases, and employee-employer relations. Often the arbitrator will limit discovery to a single deposition of each and set a trial (arbitration date) fairly quickly, which while in the nature of a trial, is held at the arbitration office in a conference room. I like them, especially if the arbitrator is a retired judge, who has been around the block of few time.

Bottom Line: Check you contract.