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Coming to a contract near you: the predispute jury waiver.

Article Excerpt
For years, the mandatory arbitration clause has been the darling of big business. Companies have lauded the clauses--slipped into myriad consumer contracts, from credit card and employment agreements to home mortgage loans--as a way to protect profits from "runaway" jury verdicts and the negative publicity associated with defending a defective product or discriminatory practice in a public forum.

But increasing judicial hostility toward forced arbitration--especially in the employment context--and the high costs of using a private forum to resolve legal disputes have led a growing number of corporate executives to rethink their dispute-resolution options. The latest corporate strategy, legal experts say, is to replace arbitration clauses in consumer and employee contracts with predispute jury waivers, which send disputes to the courtroom but keep the jury out.

"It's an emerging and pernicious trend," said Paul Bland, a staff attorney with Trial Lawyers for Public Justice (TLPJ) in Washington, D.C. "Quite a few companies are using jury waivers to require consumers to give up important constitutional rights as a condition of doing business with them."

Stuart Rossman, litigation director at the National Consumer Law Center in Boston, agreed, saying jury waiver clauses are gaining favor among businesses. Waivers "are not the prevailing mode. They certainly don't appear as frequently as predispute mandatory arbitration agreements," Rossman said. "But it's something that we're seeing more and more of."

"I think there is a sense that arbitration agreements are not saving the people who are using them that much money," said Stephen Fink, a Dallas lawyer who represents employers and advises his clients to consider including waivers in their employment contracts. He said arbitration can sometimes cost defendants more than a jury trial.

With arbitrators typically charging several hundred...

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