x
Breaking News
More () »

3News Investigates: Is arbitration a bad deal for consumers?

If you sign an arbitration agreement, you are giving away your right to sue in court.

MENTOR, Ohio — We've heard it before: the devil is in the details.

If you're a homeowner, you know all about the fine print found in many contracts.

There's one detail so controversial that it's gotten the attention of Congress, and it can cost you money when something goes wrong.

It's known as arbitration and when we sign the dotted line, we're signing away our rights to our day in court.

When you build a new home, you might expect a few bumps along the way. You don't expect those bumps to turn into mountains, three years later.

But that's what Michael Connelly of Mentor is facing.

“My sump pump is continuously going off. I've gone through seven sump pumps,” said Connelly. “There's water coming through the saw cuts of my basement floor."

Connelly is fighting with ProBuilt and it's become a 'he said, they said' situation.

The ProBuilt owner tells 3News in part, "The ground water levels can change with the seasons and over time, that is the issue we believe Mr. Connelly is experiencing. Our contract clearly states that we are not responsible for seasonal changes in the ground water, but we are committed to working with Mr. Connelly to offer resolution."

Credit: WKYC

So, why doesn't Connelly sue them in court?

“The only option for the home-buyer is AAA Arbitration,” said Connelly.

“In arbitration, at least half the time, I'm telling my potential client I can't help you in an economic way because it's gonna cost you as much as you're gonna try and get back,” said consumer lawyer, Dan Myers, Esq.

Myers said arbitration can be a bad deal for consumers.

“You have to pay upfront $4,000 to $5,000 dollars just to file the case. That's not lawyer fees or the cost of arbitrator, that's just the cost of filing the case,” said Myers.

To put that in perspective, if you were to file a lawsuit in Cuyahoga County, it would be a $250 dollar filing fee.

Myers said there is a way to avoid arbitration in the first place.

“If there's an arbitration clause in the contract, cross it out, put a big X through it, and initial next to it saying not agreed to, before you sign the contract,” said Myers.

You can try and negotiate it out of the deal.

“And if the contractor agrees to it, great. If they come back later and say you have to agree to this arbitration clause otherwise I'm not doing the work, think about finding another contractor,” said Myers.

Mandatory arbitration has become such a big issue that the House of Representatives recently passed a bill to end it.

However, it's unlikely that legislation will get through the Senate.

Before You Leave, Check This Out