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Few aspects of Alternative Dispute Resolution have sparked more debate and controversy than the issue of mandatory or imposed arbitration, particularly in the consumer context. The growing use of arbitration clauses in consumer agreements have been attacked on a number of bases including claims that they: are often hidden, not voluntary and part of a contract of adhesion; deny rights to a jury trial; contain unconscionable provisions involving costs or conditions of arbitration; and are heavily tilted against the consumer. Regrettably, the discussion of the appropriateness of imposed consumer arbitration has become increasingly polarized. Opponents decry any imposed pre-dispute consumer arbitration clause, while supporters insist it is a reasonable condition of doing business. While challengers to mandatory arbitration clauses have looked to the courts for relief, the U.S. Supreme Court has been consistently supportive of arbitration, including in the consumer context, for the past several decades. Not necessarily inconsistent with the Supreme Court’s position, some courts have cited the existence of unconscionable, one-sided and onerous conditions of the arbitration process — as distinguished from the existence of a mandated arbitration clause — to invalidate the agreement. Nor have efforts to enact legislation to curb the use of mandatory arbitration, particularly on the state level, yet brought about significant restrictions for a number of reasons but particularly because of a generally recognized pre-emption by the Federal Arbitration Act or other federal law. It is far from clear whether continued efforts to have the courts or legislatures define a bright line as to when consumer arbitration provisions are acceptable will succeed anytime soon. A more promising avenue to reach greater certainty and stability is to seek consensus from business and consumer groups. This can be achieved by greater dialogue and self-imposed limitations by vendors. A number of provisions could certainly be inserted in the arbitration clause which would be acceptable to both sides and which would make the agreement to arbitrate of mutual benefit. Others could be negotiated. While not each of the following possibilities would be appropriate or acceptable in all clauses, they are worthy of consideration: � Afford the consumer the right to reject the arbitration provision at the outset by a clearly defined opt-out procedure � Limit the arbitration provision to anticipated disputes from the transaction or sale at hand and not to unanticipated or extraordinary claims. � Specify that the agreement to arbitrate does not preclude proceeding on a class rather than individual basis within the arbitration forum. � Build a provision into the arbitration agreement that the result of the arbitration will be binding on the vendor but not on the consumer. � Carve out a right for the consumer to proceed in small claims court rather than arbitration. � Cap costs to be incurred by the consumer. � Most importantly, ensure that the proposed arbitration process is fair in both reality and in perception by the consumer, with basic consumer rights, such as arbitrator selection, convenient forum and access to reasonable documents from the vendor. The importance of avoiding conditions which might be construed as unconscionable cannot be overemphasized. In fact, several major ADR providers have taken a leadership role by adopting due process protocols which decline administering consumer mandated arbitration agreements unless the process affords certain protections to the consumer. Some of these protocols, however, have themselves been too zealous in criticizing pre-dispute arbitration clauses. One such effort was a protocol adopted by the ABA, AMA and AAA in 1998 which presumptively precluded any agreement to arbitrate a medical dispute involving a patient prior to the time the dispute had actually occurred. This protocol, by barring all pre-dispute clauses, throws the baby out with the bath water. Many of the expressed objections to consumer-mandated arbitration are legitimate and based upon well-founded concerns stemming from documented examples of unfair, one-sided provisions in contracts of adhesion. On the other hand, a reasonable case can be made for arbitration in many consumer matters. Mandatory arbitration is not quite the monster some have made it out to be. It can provide an accessible, speedy and efficient process to resolve appropriate and recurring consumer disputes. This against the reality that many modest-sized disputes do not ever get to the courthouse except through the small claims process at one end of the spectrum or a class action matter at the other end. Open dialogue between consumer groups and business groups can perhaps achieve the correct balance. But first, the rhetoric must be modulated and extreme positions tempered. Harry N. Mazadoorian is the Distinguished Professor of Dispute Resolution Law from Practice at Quinnipiac University School of Law and an arbitrator and mediator. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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