You can’t just buy a settlement.
Arbitration is an in-person, face-to-face hearing, where lawyers and judges assess whether your case is valid or not.
Arbitrators typically decide whether your complaint is valid based on their own expert opinions.
You can dispute the validity of your case by asking the judge for a jury trial.
If the judge agrees, the judge then decides on a verdict, usually after several days of deliberations.
You have 30 days to file a counterclaim with the court, or the judge will order a jury to consider your case.
You could file a lawsuit to win, but most arbitration cases settle out of court.
The law has not clarified how to resolve a dispute with an arbitration agreement.
The Consumer Financial Protection Bureau (CFPB) released guidance last year to clarify the arbitration process.
The CFPB said in a statement that it is in the process of reviewing the new guidance.
“The new guidance clarifies the arbitration provisions that will be available to all consumers who receive consumer financial services, and clarifies how consumer disputes will be resolved through arbitration,” the agency said.
In a recent study by the National Association of Arbitrators (NAAI), nearly 80 percent of consumer complaints related to financial services arbitration reached the court.
That’s a lot of people who could be awarded the right to sue you in court.
A judge would be more likely to hear your case, and would probably be able to award damages if the case went to trial.
Arbitrating disputes isn’t new.
Arbitrations in the early 20th century helped set the stage for modern consumer law.
In 1917, the US Supreme Court ruled in a case called Brown v.
Board of Education that it’s illegal to compel schools to teach students what the school says they must learn.
The Brown decision set the precedent that teachers could enforce their rights without violating their students’ First Amendment rights.
Today, most US states have some form of arbitration in place.
Most US courts use a system called “entitlement” arbitration, where a class of people with similar rights are asked to arbitrate their cases.
If you’re a student, your school has the right under the law to demand your participation.
If it’s not your school, your case could be heard by a judge and decide whether you should receive financial aid.
The National Consumer Law Center said the CFPBC guidance is a step in the right direction.
“We’re excited about the new rule and hope that it will help us more easily reach agreements with our peers and students that are both fair and beneficial to both parties,” Laura Schreiber, senior director of consumer advocacy at the Center for Responsible Lending, told Recode.