Suing a company is risky and expensive business and often times it’s set up as the single, brave consumer against the massive machine of corporate greed and corruption. Many consumers have to spend large sums of money and time on a lawsuit that they will most likely lose. Luckily, people can work together in what is known as a class action—lawsuits where an individual sues on behalf of a group. This is usually more effective, because you have the evidence and resources of more people working toward a common goal. However, in recent years plaintiffs trying to form class actions have come up against a legal blockade—an arbitration clause. Arbitration clauses, startlingly common nowadays, can stop an entire lawsuit in its tracks. So, what exactly is an arbitration clause? It’s simple really. In the world of law and business, an arbitration clause is a contradictory policy that prevents consumers from teaming up in a class action to sue, and forces them to work as individuals instead. For example, if a big company cheats its customers, they are barred from working together to sue the company, instead they must sue one at a time. As anybody who’s ever taken a look at lawyer fees knows, this can become very expensive for the consumer, and so the clause works more in the favor of the business than in the favor of the customer. Arbitration clauses aren’t new. In fact, the precedent has existed for over seventy years. They hide in the hundred-page Terms and Conditions that no one ever reads (and yes, big companies do count on your laziness). Nowadays, it’s nearly impossible to buy from a company that doesn’t have an arbitration clause—every time you agree to those ubiquitous Terms and Conditions, the chance is high that you’re also agreeing to an arbitration clause.In fact, arbitration clauses don’t just affect the consumer looking to sue—they also have a negative effect on law enforcement. Class action suits are often useful for detecting patterns of corporate abuse and corruption, and with the proliferation of arbitration clauses, class action suits are becoming fewer and farther between. The New York Times reports that more and more cases are being forced into arbitration, with about 140 cases in 2014 pushed directly into arbitration, compared with a little under 50 in 2005. Bit by bit, arbitration is taking its toll.In practical terms, this just means that one might end up having to fall victim to an unfair charge rather than go up against a huge corporate organization on your own. Many of the companies that students here already use daily have arbitration clauses—Netflix, Starbucks, Expedia, and more. If one were to be unfairly charged or mistreated by the company, arbitration clauses have already ensured that the right to sue in a class action would be taken away.However, not everybody thinks that arbitration clauses are a bad thing. Some point out that class action suits are decided without input from the consumer—for example, the customer is notified that they a company they’re involved in, is suing another for an issue affecting the customer, and they can choose to contribute information to the class action suit or withdraw. In effect, the only thing that arbitration laws actually ban is this sort of class action, where consumers are unwittingly involved in lawsuits. Forbes reporter Daniel Fisher points out another problem with arbitration law critiques: “These aren’t lawsuits by little guys […] against big corporations. Most are lawsuits by wealthy attorneys trying to get wealthier, by using the mechanism of the class action.” According to Fisher’s research and analysis, the main point of arbitration clauses is to stop conniving wealthy businessmen and attorneys from abusing the class action system and roping consumers into unwanted lawsuits. If that is truly the case, arbitration clauses may not be so bad after all, however consumers should remain vigilant in order to protect themselves from future abuses. This article was written by Savannah Billman. Please send an email to [email protected] to get in touch. Photo Credit: Wikimedia Commons.