unclear what impact they may have on the arbitration process the nation that has championed civil rights and consumer protection laws we must balance the need for quicker and inexpensive resolution with upholding a consumer's right to choose according to my colleagues on the other offer benefits and certainly it does and i understand that i've talked to many people about it and it can facilitate the correction of certain problems and inexpensive and timely manner i still have concerns about the use of mandatory binding arbitration agreements in any context in light of the lawsuit against the national arbitration forum certainly sensitive to the importance of the arbitration process and how it can be helpful in resolving issue to the probably opposing viewpoint at the table here i i guess i would start out by saying that arbitration i believe is a critical tool in our society because it makes justice prompt and accessible for millions of americans  without it too many citizens would be left out in the cold by overburdened courts and overpriced lawyers i feel strongly enough about this that i circulated letter yesterday to all my colleagues seeking to set the record straight on arbitration because i believe that record is so full of myths that it can be hard for us to see the issue clearly many times for example i hear claims that the voluntary use of previous arbitration agreement somehow undercuts consumers indelible rights to jury trials but i think i could be hardly further from the truth during trials are remote prospects in the vast majority of consumer lawsuits in the first place the norm for these cases in court is not jury trial but dismissal on pretrial motions or disposition on summary judgment many cases of course are settled perhaps most significantly in consumer class actions but class actions routinely leave consumers with pennies on the dollar for their claims it is the wealthy trial lawyers who bring these cases not the consumer plaintiffs who reap the profits from litigation still worse the right to trial jury is simply hollow for those whose claims are too small for a lawyer to make millions upon millions of americans who have claims that are clearly meritorious don't generate enough legal fees to attract a lawyer the citizens faced tall odds when they go it alone in court is a simple flexible any expense of procedures of arbitration that allows them to seek and obtain meaningful relief now the second is that the courts have interpreted the federal arbitration act to trump state laws leaving consumers little recourse in the few cases in which arbitration might be unfair but the supreme court has interpreted the act to permit anyone to challenge an arbitration agreement if the challenge is based on generally applicable state contract law and applying the standard courts around the country regularly apply legal principles such as state law to strike down arbitration agreements that do not provide customer consumers with fair notice or fair procedures and the third myth is that arbitration involves high administrative fees and unduly limits discovery that's ruth again to the contrary the american arbitration association for example limits consumers fees to only one hundred twenty five dollars for arbitration claim seeking less than ten thousand dollars the consumer due process protocol meanwhile calls for consumers to have access to discovery that is legally legally obtainable and relevant to their case recently there has been one incident that has led to renewed calls for restrictions on mandatory binding arbitration and that's the national arbitration forms withdrawal from consumer arbitration and action followed a lawsuit over the forms debt collection relationships but mr chairman this incident shows that problems are already being solved in the one sector that has been the poster child for enemies of arbitration and debt collection experience provides no basis for reaching out to prohibit mandatory binding arbitration across the board too often congress specializes in legislating unnecessary solutions to non existent problems such legislation typically serves only just bring in special interests such as the plaintiffs trial bar i hope the congress is not an unnecessary solution to the mythical problems with arbitration that legislation would come at a huge price sacrifice of one of the practical means that millions of chairman we welcome the witnesses but particularly our members of the committee who have been making very important and unique panel and welcome the second panel legal services programs where practice is litigation and legislative and minister of advocacy and professional and community education efforts prior to coming to michigan and nine hundred ninety seven she spent twelve years of community legal services in philadelphia consumers and we are proud the arbitration fairness act that has been filed in my practice arbitration clauses are ubiquitous they show up in credit cards they show up in bank accounts they show up in telephone and cell phone contracts they appear in personal home and car loans utility agreements and student financing they're particularly prevalent in predatory products where we're dealing with most vulnerable consumers items such as payday loans rent to own contract and sub prime mortgages and credit cards all contain the force arbitration clauses forced arbitration clauses prevent access problems could be down the road there's a lack of transparency in secrecy there's a lack of accountability the right to review is a bias towards the merchant as the repeat of the higher bias that we've heard about there's a susceptibility for conflict of interest and then there's the expense of the consumer has been has been noted there are been three major developments this past month in this area first as a result of brought by the minnesota attorney general's office the national arbitration forum has dropped doing consumer arbitration case there are no longer accepting new arbitration cases or processing the claims that were brought by the minnesota tourney general's office dealt with conflict of interest but there were also issues involving the level in the quality of the services provided and whether it was by then in response to a letter from the minnesota tourney general's office or otherwise the american arbitration association announced that it was suspending its election arbitration pending further consideration of appropriate safeguards and then the bank of america and j p morgan chase both announced that they would be dropping arbitration clauses in all of their credit card agreements bank of america went further to indicate that it was dropping it  apples but the system itself the opportunities for abuse and for profiteering are inherent in the relationship it is an intrinsic law where the arbitration company draws its income from satisfying the debt collector or risk losing that account private justice where the funds are being paid for by private parties is inherently going to end up being biased the fact that an a f is no longer in the business does not mean that there are not plenty of pretenders to the throne waiting in the wings t over this very lucrative business american arbitration association didn't drop debt collection arbitration but it did not drop the enforcement of arbitration clauses against plaintiffs when they brought their own cases furthermore we have no idea what safeguards would be put in place when they will be put in place and most important who will enforce them without a horseman they're just pieces of paper and finally bank of america j p morgan chase should be congratulated for dropping the credit card requirements but that still means that the ten largest credit card companies united states still have mandatory arbitration clauses and the banks can always reverse their policy as has been seen recently on a number of occasions interested as a civil rights lawyer in the access to fair credit and i would be very concerned if under the equal credit opportunity credit opportunity my clients were no no longer able to assert their rights  those that you for ten years i filed against the finance industry for claims of discrimination we were able to get systemic change in those industries as a result of those lawsuits i would not  appreciate your testimony third witness has a positive and a negative to make his great first name stephen mr stephen where he said professor at the university cancer school of law which brings back pains from a year and a half ago  when victims of sexual harassment and whistleblowers are denied that opportunity and are told that they must not only go to with no right of appeal but they must pay for that privilege the notion that arbitration and our public constitutional court system are equal one is the modern day version of separate but equal it would be malpractise for any practicing attorney to equate the two discovery or limited discovery a judge who is required to follow the law not follow the law the right to appeal the right not to appeal and a judge whose economic future is dependent on satisfying their arbitration is a dispute resolution system it is not a justice system it cannot be confused as a justice in the employment recognize that individual workers do not have the ability to really negotiate terms of labor ever since the thirteenth amendment we have recognized that the free market has failed to protect employers the notion that if you don't like arbitration give up your job give up your health insurance is a proper way to regulate the workplace has been discredited what's at stake here is the integrity of the laws that you have  you have passed the civil rights laws and we cannot enforce them they are being undermined you have passed whistleblower laws and we cannot enforce them if you blow the whistle and no one hears you are not a whistle whistleblower claims up to the present day if you want to look at what america would look like if subprime lending claims go to arbitration look at what happened here until last year or two years ago when freddie macin fannie mae said they would no longer b arbitration relationship says they have been preempted your own state of arizona has specifically excluded employment contracts from your employment that has been preempted the notion that courts all over the country are enforcing claims simply is not economical to bring a claim for one hundred dollars either in arbitration or in court so the only way your consumer protection laws and the only way justice will ever be reached which were leading to discrimination against african americans hispanics future injunctive relief change those policies you cannot get that really in arbitration it was only by being able to try cases in tennessee as a something posed upon them later and sometimes you know it occurs to me that it gives them at least an additional option to say whether i would rather subject myself to binding arbitration or the court system that i may have some of the same significantly from yours i thought the one about the terrorist was interesting i'm not sure we could get a binding arbitration agreement it might go against some of their own philosophical persuasions and i'm not sure if they did  they would hold themselves accountable to in the long run but can you give me some idea as to why it seems that mr remarks divergent from your own  that's where we learned that the national arbitration credit card cases were going ninety nine percent where the banks that's where we learned that employers are winning between twelve and twenty parties equal bargaining power in my practice executives fighting over severance i think voluntary arbitration can be a very effective method i do believe that mediation is a much better way and if i might correct mr ware the american arbitration association refuses to accept causes in the health care field and the american arbitration association issued a press release in one nine hundred ninety seven saying that employment arbitration should be voluntary  cancian ability which would cost you twenty thousand dollars and if you win it goes on appeal for two years it's going to cost a consumer fifty thousand dollars in two years to challenge an arbitration clause in court  to improving the fairness of the system and reducing the cost there's no reason in the world to be a noble endeavor undertaken by people who really were concerned with solving problems in the labor arbitration they were charge probably the best thing ever written on mandatory arbitration they say that structural biases against the claimants they say it interferes with their ability to enforce the law to do the job it asked them to do they point mandatory arbitration of civil rights the reason civil rights law was to provide access to a federal court judge who was obligated to apply the law arbitrator do not need to all of the documents are under the control of the employer ethical rules from getting that information informally i simply cannot sustain my burden of proof without adequate discovery in many arbitration forums of the case is equivalent to our constitutional system of justice i want to point out to you that in the declaration of independence thomas jefferson listed the grievances against the justified this revolution and we know that he said  today the issue here is whether or not they're going to be able to force the rights that this congress has given each and every one of them to allow them a right to seek a full and fair hearing where they have the right to be able to have an  hearings on this and when the arbitrator has to decide a case is being paid by the hour i suspect that that has very or she has very little incentive for doing it as expeditiously as would be the case with federal district court judges on the mandate from the chief judge of the district to clear the docket as quickly as possible so you have a system that is inherently not only more expensive when you actually assert your rights but it's in the interest of the arbitrator to drag it out and move it along as much as possible to get as much