Wednesday, May 27, 2015
In the May 25th Opinion page of The Boston Globe, Law Professor Jeff Sovern wrote convincingly that arbitration, the kind that appears in the very small print of credit card agreements should be banned as unfair and anti-consumer. Thinking back to law school the term “contract of adhesion” comes to mind, where the commercially powerful victimizes the weak with terms on which the latter has no practical ability to negotiate.
But the piece also brings us back far more recent events, in which one of us attempted, over a period of nearly 10 years, to advance a proposed Family Law Arbitration Act, on behalf of the American Academy of Matrimonial Lawyers, through the pre-legislative stage. In trying to build support among the bar by endorsement of the Massachusetts and Boston Bar Associations, without which legislators will not consider sponsorship, Bill Levine spent parts of 3 separate years successfully obtaining approvals of the associations’ family law sections, only to founder when other sections had interests that viewed family law arbitration as if it emanated from the small print of similarly one-sided transactions. In some frustration, and by an otherwise tactical decision, we backed away from the effort, approval of the broader bar associations being unlikely, to await the Uniform Laws Commission’s (formerly NCCUSL) Model Family Law Arbitration Act that is expected in 2016 or so, when we expect to take another run.
Matrimonial arbitration is not credit card arbitration. Every agreement from which it must arise is one in which that parties have, or have the right, to counsel. In each case, both parties have an absolute right to say “no”. Every agreement to arbitrate future disputes, as part of the divorce agreement is approved by a judge and subject to later objection and review on the basis of contract defenses such as incapacity, duress, coercion or undue influence. Each agreement to arbitrate a present dispute is subject to court approval. Subject matter limitations in the name of parens patraie, such as best interests review and trial de novo of custody matters are policy long established in common law. As a matter of current case law here, all arbitration awards are likely subject to fairness review.
Would some overbearing litigants seek advantage by cutting off opponents’ direct access to court? Most likely, yes. Are there ways to vet and avoid the consummation of such schemes that deny free will? Absolutely. Should this concern throw out legislative promotion of a cost-effective process that merely adds one more optional remedy for parties’ who struggle with a highly public, overloaded and fiscally-hobbled public court system, serving themselves and relieving resource scarcity for the public at the same time? Emphatically, no.
Don’t let banks prey on weak consumers. But, at the same time, see the problem for what it is: overbearing commercial interests reducing their own liability for predatory lending practices; and not an indictment of arbitration per se.
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