Report That Companies Include Provisions in Arbitration Clause that They Know the Arbitrator Won’t Enforce–But That Might Suppress Claims Even More

by Jeff Sovern

Level Playing Field is reporting that companies include in their arbitration clauses provisions that AAA, their arbitration service, has informed them have to be waived, meaning AAA won't enforce them. The clauses in question may deter consumers, who don't know that they won't be enforced, from bringing the arbitration at all. For example, according to the report, Choice Home Warranty includes in its arbitration clause a provision limiting claims to $1,500 even though AAA had told Choice Home Warranty that the clause had to be waived. That might supercharge the claim-suppressing quality of arbitration.  I wonder if this is a UDAP violation, and also whether it is ethical for a lawyer to advise a client to include in its contract a provision the lawyer knows will not be enforced. 

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