More importantly, your experience does not contradict PubCit’s statement. Their report emphasizes that a few full-time arbitrators handle most of these cases. That is consistent with your experience that most arbitrators merely supplement their income with occasional arbitrations — but the average consumer is far more likely to land in front of the few full-time “mills” than the many “Sunday drivers.”

As someone who volunteers for a consumer organization I see a lot of consumer complaints where arbitration clauses in house purchase and home warranty contracts harm consumers.

Few consumers really understand that agreeing to arbitration means giving up your right to file a lawsuit. This alone removes important leverage, and the company isn’t motivated to make the situation right if they know that stalling, or often biased arbitration will be sufficient to make the problem go away. These companies know who the arbitrators are and they do repeat business with them. The consumer doesn’t. If that’s not a huge potential for bias I don’t know what is.

Arbitration keeps complaints private in 49 states, meaning consumers can’t do adequate “homework” because so many complaints are kept under wraps. It comes as a surprise to many, also, that consumer complaints at BBB’s and state agencies may or may not be public info either. Court records simply do not reflect the number of problems with some companies because arbitration keeps the complaint out of court. We have seen builders with NUMEROUS serious and valid complaints show up highly rated in surveys like JD Power, or the BBB , etc. We feel that arbitration hides so many problems that the bad builders can and often do appear squeaky clean to any average consumer.

Even in CA where decisions are supposed to be public, a “win” can be for such a pathetic award that it’s really a loss, when it’s reported that a consumer won. We typically see that homeowners for example, who actually win against a builder or warranty company, may get only a FRACTION of their actual repair costs. An arbitrator for a warranty or builder dispute may “order” the builder to “fix” a problem, but they don’t order them to do it correctly. Thus, a builder can send a guy out with a tube of caulk to fix a whole roof that’s not to code and really needs to be redone. In the eyes of the builder, warranty co, and the law–thanks to the arbitration clause–this is a “win,” for the homeowner.

Until a person has been throught it or has seen someone go through it, it can be hard to grasp just how unfair this system is. While the legal system certainly has flaws, at least there is some oversight, it’s public, and most can have a jury. In arbitration, the arbitrators make the rules even if they’re contrary to law, it’s all private, and it’s essentially the fox guarding the henhouse.