July 2016 Archives

Arbitrators may relief that a court may not. What limits should there be on the arbitrator's remedial powers? Please provide your thoughts/comments below.

When is it appropriate for an arbitrator to offer guidance to the parties on proper procedural issues such as the issuance of subpoenas?

Please provide your thoughts/comments below.

Limitations on issues to be briefed - What are your thoughts?


Should an arbitrator put strict limitations on issues to be briefed?

Please provide your thoughts/comments below.

By Alexander Bachuwa, Esq.

Consumer: I was told that I would be receiving a full refund for these charges.

Customer Service Representative: I have no notes on your account indicating a refund was authorized. Please hold while I transfer you...

From Verizon to eBay, Comcast to Citi, consumers have experienced an increase in frustration and a decrease in customer service. Outraged from overbilling, phantom charges, accounts that are inexplicably closed, and offers that are not honored, consumers nevertheless find themselves with little to no recourse against corporate giants. Bewildered, some consumers turn to ‎bloggers for answers, Twitter to shame corporations into compliance, or forums for alternative remedies. These communities offer anecdotal insight on what can be done to rectify the situation. Without fail, one of the first responses whether it be from lawyer or layman is, "Take them to court!" ‎

Sadly, in today's pro big business climate, such a reaction may be the only option to effectuate a solution. Unfortunately for many prospective plaintiffs, one of the most powerful options to combat corporate mischief, the class-action lawsuit, has been eliminated by one-sided contracts that limit a consumer's remedy to either small claims court or the unfamiliar mechanism known as arbitration.

Small Claims

On its face, small claims is a viable avenue for consumers who do not wish to pay legal fees to resolve a minor dispute. In reality, the hassle of this undertaking dissuades many consumers from having their day in court. In the event that a savvy pro se plaintiff (one who is not represented by legal counsel) maneuvers through the process, the award paid by the corporation to the consumer is negligible as ‎there is a limit on ‎the damages that a party can claim. ‎As a result, the wrongdoing corporation comes away unscathed.


A creature of contract, arbitration was adopted by corporations to ‎level the playing field between consumers and corporations. Powerful companies argued that the only winners from class-action suits were attorneys who received tremendous fees for litigating such big cases. In consumer arbitration, the consumer would, once again, be the focal point of the proceeding. Indeed, in order to assure the skeptical policymakers that arbitration was consumer-focused, many companies offer generous awards for consumers who prevail.

In theory, arbitration is an excellent solution for wronged consumers. The cost of arbitration is in line with a small court claim, lawyers do not stand to gain disproportionate fees in comparison to a single consumer, and, unlike litigation, the process is efficient and final.

In practice, arbitration has its drawbacks. First, by contractually being mandated to use arbitration, consumers relinquish their right to go to court. Next, consumers are unaware of how arbitration works. The former is de minimis, and the latter can be said of many attorneys who do not practice in this arena. Adding to the confusion are corporations that contaminate the process by inserting in absurd obstacles. Some require consumers to file a notice to the company of their intent to file for arbitration, wait a random amount of days, and if the issue is still unresolved, then the consumers are permitted to move forward with the process. Some consumer contracts even state that consumers are not entitled to representation by counsel should they go the arbitration route, a provision that is unconscionable. To the shock of none, overwhelmed consumers forsake this effective process while the corporations remain unaccountable.

The Way Forward

Agent: Can you please describe the nature of the issue that you are having?

Customer Service Representative: I just finished explaining this to the last agent who transferred me to you!
It is not a surprise that a consumer who is overcharged $50 would rather pay the bill then deal with customer service for hours. It stands to reason that thousands if not tens of thousands of consumers who have similar problems would do the same. This plays right into the calculating hands of big companies that derive a substantial windfall as a result. With no right to join in a class-action suit, insignificant awards in small claims, and an arbitration process that has been convoluted by questionable contract terms, it appears that the consumer's claims have been squashed the very moment that (s)he entered into the agreement with the corporation.

In fact just the opposite is true. Companies have woefully underestimated the power arbitration has given the consumer as a means for dispute resolution. Claims like the one mentioned above can produce a meaningful result as the arbitrator can award money damages, including legal fees. While one award may not be enough to trigger drastic change, the aggregate most certainly will if a company's bottom line is impacted.

As more consumers prevail through arbitration, it will not be shocking when companies cry foul again and lobby to have disputes exclusively decided by its own customer service team, a notion that is not far-fetched given the monopolization of consumer services. In the mean time, consumers should consider seeking satisfaction by prosecuting their legal rights through arbitration.

Alexander Bachuwa, Esq. of Bachuwa Law has extensive international experience working abroad, focusing on alternative dispute resolution and sports management. He has an MBA in Global Finance from Thunderbird School of Global Management, a JD from Arizona State University, and a BA in economics from University of Michigan. Alexander is licensed to practice in New York, Arizona, is a Foreign Registered Attorney in Mongolia, and a FIBA licensed agent. He has also been admitted to all New York and Arizona federal courts. Alexander is conversational in Arabic, Spanish, and Mandarin. Contact Alexander at nomadresolutions.com or globallsportsmgmt.com

About this Archive

This page is an archive of entries from July 2016 listed from newest to oldest.

June 2016 is the previous archive.

August 2016 is the next archive.

Find recent content on the main index or look in the archives to find all content.



Powered by Movable Type 5.11