Arbitration Clauses: Do-It-Yourself Tort Reform

Nowadays, binding arbitration clauses appear seemingly everywhere — from credit card terms and conditions to maritime employment contracts. According to Professor of Law David S. Schwartz, “by adding an arbitration clause, a would-be defendant can do away with juries, with pesky discovery into its documents or employees’ testimony, and, now, with class actions.” Schwartz believes Supreme Court decisions over the last 25 years have morphed the Federal Arbitration Act into a “do-it-yourself tort reform statute” — and many corporations are happy to take tort reform into their own hands.

A tort is a civil wrong, not to be confused with a crime. Crimes are punishable in criminal court, whereas torts allow people to seek compensation in civil court for physical, mental or monetary injuries, whether caused intentionally or by negligence. Examples of maritime torts include:

• Assaults
• Slip and falls
• Injuries from defective equipment
• Injuries caused by a lack of proper safety equipment
• Failure to properly train crewmembers that results in injury
• Shipyard asbestos exposure leading to mesothelioma

Tort reform seeks to limit people’s ability to seek redress in court, such as capping the amount of compensation they can receive or placing limitations on how long they have to file a lawsuit. With arbitration clauses, employers can circumvent the courtroom altogether, effectively achieving the same goal as tort reform — limiting a person’s ability to obtain an award in court.

When an employer includes an arbitration clause in its employment contract, you lose your right to have your claim decided by a judge or jury or to participate in a class action effort. Additionally, if you are injured and your employer promises to continue paying your wages — but only if you sign an agreement to arbitrate your personal injury case — you should contact a maritime attorney immediately. Signing such an agreement means you give up important rights, which could adversely affect the amount of damages you can recover and may limit your medical care and treatment.

Unsure how an arbitration clause might affect your claim? An experienced Boston maritime attorney can help you understand your legal rights.

Latti & Anderson LLP – Boston maritime trial lawyers