Losing your day in court.(Memo To Members)(mandating arbitration)(Editorial)

Don't you hate getting all those updated "customer agreements"--the incomprehensible notices from credit-card companies, utilities, and cable-television providers that you usually don't read, but stuff in a drawer somewhere? They're not just wasted trees. A lot of the notices I'm getting inform me that I no longer have the right to take the company to court even if I have a major problem. Instead, the company is imposing mandatory arbitration.

This may appear to be a good idea. If you and the company can't resolve a dispute, a third party (an individual or a panel) will be called in to decide who's right. Businesses claim it's quicker and cheaper than a lawsuit, and both sides have to abide by the arbitrator's decision.

With more and more companies mandating arbitration, you'll find it nearly impossible to get a credit card without such a clause in the fine print of its credit agreement. You may also find the clause in your HMO contract or in the paperwork you sign when you first make a purchase or contract for a service. If any of your current agreements lacks the requirement, it may be added later. Result: more notices in the mail. You might even find an employer requiring that you agree to arbitration of any future employment disputes before you're hired--or to keep the job you already have.

There is an alternative. If, after a dispute occurs, both parties choose to bring in an outside mediator, and if either party is free to reject the recommended solution and proceed to court, certain situations can be settled quickly and fairly by mediation. But it's unfair to impose mandatory, binding arbitration before a dispute occurs, especially as few consumers realize what they're agreeing to or truly understand the restrictions of the system.

While most of us would be happy never to have to go to court, being unable to choose that option means that no judge or jury can hear your case. If you lose an arbitration, you have no right to appeal--even if the arbitrator incorrectly interpreted the law--unless there was proven misconduct or corruption on the arbitrator's part.

What's more, using an arbitrator means you give ...