Using arbitration to settle disputes is faster for consumers and employees to win more money, more often than through a lawsuit. Litigation can be expensive and time-consuming, so getting rid of arbitration is the #1 goal of the plaintiffs’ bar. More lawsuits—especially class actions—mean larger paydays for the lawyers.
But even trial lawyers know arbitration is a much more efficient way to handle disputes. Morgan & Morgan, the largest personal injury law firm in the U.S., includes arbitration in agreements with employees, clients, and the general public—even though they claim arbitration “favors companies” and puts victims of wrongdoing “at the whims of a system that puts them further and further away from ever getting relief.”
Morgan & Morgan added arbitration to their employee agreements around 2015, according to a lawsuit they filed to enforce arbitration against a lawyer departing from the firm. And employees that did not want to sign the arbitration agreement were “free to leave.”
The firm has also been using arbitration in agreements with clients, as evidenced by a recent malpractice lawsuit brought by a former client against Morgan & Morgan, where the firm successfully compelled arbitration. The former client in this case agreed to arbitration in 2017 and again in 2018.
Sites owned by Morgan & Morgan, such as “The Whistleblower Attorneys” or “Business Trial Group,” have arbitration agreements in their Terms & Conditions. The firm’s “Battle of the Jingles,” where people could create an original song for a $100,000 prize, had an arbitration agreement in its contest rule.
Now arbitration is on the chopping block. On Wednesday, Oct. 27, the House of Representatives Judiciary Committee will mark up the so-called Forced Arbitration Injustice Repeal Act (FAIR Act), which will effectively prohibit people from using arbitration to settle disputes with a company or employer. The bill carves out an exception for labor unions to use arbitration to settle their differences with businesses. But consumers and employees would be forced into litigation.
Trial lawyers like Morgan & Morgan prefer litigation against companies because they can make a lot more money. But they use arbitration in their own agreements because they know it’s a faster and less expensive way to resolve disputes with them.
Congress shouldn’t let trial lawyers do away with such an effective system.
