The Alternative Dispute Resolution committee will meet on Saturday, Dec.8, from 9:30 to 11:00am to discuss Is Arbitration the Right Decision for Your Client? That boilerplate arbitration clause can be a giftóor a problem. Learn more about enforcing it, getting out of it and the alternatives.
by: Mark S. Scarberry
Professor of Law, Pepperdine University School of Law
ABI Resident Scholar; Alexandria, Va.
Various bills pending in Congress would limit enforcement of arbitration agreements. For example, Senate Bill 1782 would amend the Federal Arbitration Act to prohibit enforcement of pre-dispute arbitration agreements dealing with employment, consumer, or franchise disputes, with disputes under civil rights statutes, or with disputes under statutes designed to protect parties with lesser bargaining power from those with greater bargaining power. This brief article, however, deals only with anti-arbitration provisions included in bills that deal with the current mortgage crisis.
Several kinds of bills have been introduced in Congress in response to the mortgage crisis. One kind would permit residential mortgages to be modified, to one extent or another, in chapter 13 bankruptcy cases. Another kind would attempt to reform mortgage origination practices. Both of which include provisions that would limit enforcement of arbitration provisions.