GK Law Blog

Why You Shouldn't Skip Reading the Fine Print

Thu, 21 Jan 2021 15:27:22 GMT

Ask yourself, are you feeling lucky?

Before you skip the fine print in that contract you're about to sign, ask yourself, are you feeling lucky? Mandatory arbitration clauses are routinely buried in the fine print that could force you to give up your constitutional right to go to court if you end up in a dispute with the other party. Forced arbitration allows bad actors to stay out of court and avoid public scrutiny and accountability for their misdeeds.

Historically, the cases that were most commonly forced into arbitration involved low-dollar billing disputes and deceptive trade practices between consumers and cable companies or financial service providers. Today, however, nursing home operators are using forced arbitration clauses to avoid the claims of abused residents, and employers are using forced arbitration to foreclose employee lawsuits for unpaid wages, employment discrimination, and even sexual harassment. You can read more about it by visiting AAJ's websit e. You can also download AAJ's September 2019 research report on the subject by clicking here .

There's a lot of work to be done to level the playing field between consumers and corporations. At a minimum, I propose, we can all start by reading the fine print.

James H. McKenzie Professionalism Award

Wed, 17 Jun 2020 17:27:34 GMT

Recognized by the Arkansas Bar Association

In June, the Arkansas Bar Foundation and Arkansas Bar Association congratulate C. C. Cliff Gibson III of Monticello as the 2020 recipient of the James H. McKenzie Professionalism Award. This award recognizes sustained excellence through integrity, character and leadership to the profession and the community which garners the highest honor to the legal profession.

The team at Gibson & Kieth, Attorneys at Law have always done their best to serve their community with honor and integrity. Contact us today to learn how we can add the respect and kindness that your case needs to succeed.

Paul Keith Named Arkansas Bar Association's President-Elect Designee

Sat, 10 Nov 2018 21:45:12 GMT

Paul W. Keith is the new president-elect designee of the Arkansas Bar Association.

He was elected without opposition at the close of nominations on October 31, 2018.

Keith will serve a one-year term as president-elect beginning in June 2019 before assuming the office of president at the Association’s 2020 Annual Meeting.

Keith is an attorney with the Gibson & Keith law firm in Monticello and serves as Hamburg’s city attorney.

He has been actively engaged in the Arkansas Bar Association for many years. He currently serves as chair of the Jurisprudence and Law Reform Committee and recently served as chair of the Board of Governors. He has also served as chair of the 2015 Annual Meeting and as chair of the Continuing Legal Education Committee for two years. He has served on the Mock Trial and Long Range Planning Committees and the Strategic Governance Task Force. The Association has awarded him with two Golden Gavel Awards for his service. Paul was recently appointed to the Supreme Court Committee on Professional Conduct and is licensed to practice before the United States Supreme Court.

Keith’s leadership capacities extend to his church and community including serving as president of the Hamburg School Board. He and his wife Kandi sing in their church choir; he also teaches Sunday school and serves as lay leader for the church. He is the Chancellor for the Southeast District of the United Methodist Church.

Keith has served as president of the Southeast Arkansas Legal Institute and as Special Associate Justice of the Arkansas Supreme Court. Paul is a Fellow of the Arkansas Bar Foundation. He is a three-time alumnus of the University of Arkansas at Fayetteville: B.A. in 1978, J.D. in 1993, and LL.M. in 1994. Keith and his wife, Kandi, have been married 36 years and have three adult children and three grandchildren.

About the Arkansas Bar Association

The Arkansas Bar Association is a voluntary, statewide organization with 5,000 members. Among its purposes are the advancement of the administration of justice and the fostering among its members of high ideals of integrity, learning and public service.

Civil Justice Report Dispels "Tort Reform" Myths

Sat, 25 Aug 2018 20:59:56 GMT

On April 16, 2018, the Office of Research and Justice Statistics ("ORJS") published a report based on Arkansas court data that contradicts the talking points of most tort reform proponents. The ORJS report examined available data from civil cases in Arkansas district and circuit courts for 2017. It was recently filed as an exhibit to a reply brief in retired Pulaski County Circuit Judge Marion Humphrey's lawsuit challenging the constitutionality of Issue 1 , a proposed constitutional amendment referred to voters by the state legislature for the November 6, 2018 general election. Issue 1 is the legislature's gift to its greatest benefactors - namely, corporate nursing home owners and insurance company lobbyists . The proposed amendment would place arbitrary caps on non-economic damages, such as a person's pain and suffering and the lost value of life, and punitive damages meant to deter others from engaging in wrongful conduct. It would also give our state legislature (and, consequently, their lobbyist cohorts) superseding control over the Court's rule-making authority and limit attorney's contingency fees. All this is to be done in the name of protecting businesses from "frivolous lawsuits."

However, the ORJS report indicates that the perceived widespread problem of "frivolous lawsuits" does not actually exist. As any attorney who's actually stepped foot in a courtroom will tell you, "tort reform" is a solution in search of a problem. Litigation is too expensive and time-consuming for attorneys to spend their time pursuing trivial cases. Court rules already prohibit and provide sanctions for parties and attorneys who file frivolous lawsuits - a strong reason, one would suspect, that the problem doesn't exist. Still, the perception of our civil justice system being overrun with baseless lawsuits filed by greedy trial lawyers has persisted, in large part due to a concentrated marketing effort by corporate interests to spread lies and propaganda discrediting our civil justice system and the right to trial by jury.

The ORJS report confirmed that the majority of civil cases are contract cases, which accounted for 57% of disposed cases overall, including 85% of district court cases and 50% of circuit court cases. Debt collection cases alone accounted for 36% of all cases , and landlord/tenant unlawful detainer cases accounted for another 11%. Small claims cases accounted for 14% of district court cases (3% of cases overall). Tort cases (such as motor vehicle accidents, products liability, and medical malpractice) only accounted for 9% of cases overall. As an aside, I would note that only 15 of the dozens of district courts maintain the electronic case data necessary to produce the ORJS report. Since 85% of district court case filings are contract claims (i.e., debt collection lawsuits), and since almost no tort cases are filed in district court, the percentage of tort cases compared to all civil cases filed is likely much lower than 9%.

The report also found that less than 2% of all civil cases included awards of over $100,000, and that Arkansans had a lower likelihood of being represented by a lawyer in state court than other states' citizens nationally. In the absence of any data to support their claims, why are some of our state politicians complaining about frivolous lawsuits and runaway juries? To quote Hamlet , "[t]he lady doth protest too much, methinks."

I've quoted the conclusion of the ORJS report, which accurately sums up the real problem:

As noted in the NCSC reports, the portrait of civil cases in Arkansas shown by these data are quite different from those suggested in public debate. The vast majority of cases involve fairly low dollar amounts, and many litigants are not represented by attorneys. From the data available, it appears that jury trials in civil cases are rare, and that most cases are settled, have a bench trial, or are dismissed.

Issue 1 is not beneficial to the citizens of Arkansas. It's a Trojan horse that's designed to convince you to vote to effectively take away your own right to a jury trial and give special interest groups a leg up in litigation. If Issue 1 passes, it will allow many wrongdoers to avoid accountability and keep meritorious cases out of the courtroom. Thankfully, I have more faith in Arkansans' ability to recognize the truth and reject Issue 1 on November 6.

If you're interested in viewing the full ORJS report, click here .

Avoiding Arbitration Agreements

Sun, 29 Jul 2018 18:52:23 GMT

What do you know about arbitration?

If you don't know much about arbitration agreements, now is the time to learn. You've probably agreed to arbitration hundreds of times in your life. Arbitration is a method of alternative dispute resolution where the parties submit their dispute to an arbitrator (or a group of arbitrators), who then considers the facts and arguments and decides the dispute. Sounds a lot better than hiring a lawyer and filing a lawsuit, right?

Wrong. When you agree to arbitrate, you are waiving your day in court and your constitutional right to have a jury of your peers decide the facts. Unfortunately, federal law has allowed arbitration to proliferate in an abusive manner to the detriment of consumers and employees. When arbitration is used, it's rarely optional. It is almost always a mandatory provision written by the party with all the bargaining power and presented as a "take it or leave it" term of the contract. Consumers are forced to agree to arbitrate before a dispute even arises between them and the company. Arbitration clauses are usually buried in the fine print of a contract, where businesses know most consumers are unlikely to ever see them. Unfortunately, whether or not you did the see them, the law generally presumes that if you signed the agreement ( or clicked "I accept the terms and conditions" ), you read the agreement - all of it.

Even if you do object to arbitration, what other choice do you have? Would you give up your cell phone and your credit card? If you're unemployed, would you turn down a job offer because of the arbitration clause in your employment contract? What if you had to sign an arbitration agreement as a condition of keeping the job you already have? What if you had to choose between agreeing to arbitration with a nursing home or quitting your job to take care of your ailing parents? Regrettably, the "choice" for consumers and employees to agree to arbitrate is no more than illusion. Most folks acquiesce, believing there must be some safeguards in place to ensure they are treated fairly.

In truth, there's little about arbitration that's fair to consumers. Companies use expansive contract language to force consumers and employees to arbitrate issues which no reasonable person would ever expect to be covered by the arbitration clause. Here are some examples:

When Wells Fargo was exposed for fraudulently opening as many as 2 million bogus accounts in its customers' names, it used the forced arbitration clause in its customer's original agreements to keep them out of court.

A Fayetteville, Arkansas nursing home so egregiously neglected one of its residents that he died of severe dehydration. The resident's son was unable to file a wrongful death lawsuit against the nursing home because of an arbitration agreement included in his father's admissions paperwork .

Army National Guard Sergeant Charles Beard was on active duty in Iraqi when his family car was repossessed by the lender. The lender committed a clear violation of the Servicemembers Civil Relief Act, which required the lender to obtain a court order before repossessing the vehicle. Sergeant Beard never got his day in court because of the mandatory arbitration clause in the lender's agreement.

For more examples of abusive arbitration, read this article from Amanda Werner at CitizenVox .

Disadvantages of Mandatory Arbitration for Consumers and Employees

Mandatory pre-dispute arbitration puts us at a distinct disadvantage and eviscerates many of the protections offered by our courts and our juries. For example:

Outcomes in mandatory arbitration unquestionably favor employers over and employees. According to a December 2015 report from the Economic Policy Institute citing a 2011 study, employees only won at trial in 21.4% of arbitration proceedings, whereas employees prevailed in federal court trials at a rate of 36.4% and in state court trials at rate of 57% .

When arbitrators do rule in favor of employees, the awards are significantly lower than those awarded by courts and juries. For example, the study cited in the above-mentioned EPI report revealed that the average damages awarded to employees in arbitration equaled $109,858 ; in contrast, federal and state courts awarded $394,223 and $575,453 to employees respectively, on average.

Consumers fare even worse in arbitration than employees. Based on data compiled in Public Citizen's August 22, 2016 comments to the Consumer Financial Protection Bureau, when consumers made affirmative claims against providers in arbitration, consumers prevailed only 9.4% of the time. However, when providers made claims in arbitration against consumers, providers prevailed at a whopping clip of 93% .

Because arbitration is binding, the arbitrator's decisions can't be appealed and reviewed by the courts, even if the arbitrator clearly erred in applying the law.

Arbitration proceedings are almost always confidential. This allows businesses to conceal their particularly egregious conduct from public scrutiny even if it involves issues of prevailing public concern, such as the abuse and neglect of nursing home residents. If consumers or employees "go public," companies may seek liquidated damages from them for breach of the confidentiality agreement. This arrangement prevents victims from speaking out against both a company's harmful conduct and the injustice of arbitration proceedings.

Arbitration clauses include a near-universal class action waiver. If a business mistreated you and a group of other consumers or employees in the same manner, each person is required to arbitrate those claims individually. Many individual's claims are too small to make it economically feasible for them to hire an attorney or pursue the claim on their own. By depriving consumers and employees of the ability to band together, businesses may continue their unlawful practices without any risk of real accountability.

How Do You Protect Yourself Against Mandatory Arbitration?

While this information may make it seem futile to resist the arbitration epidemic in our society, there are some things you can do to protect your right to a trial by jury.

First, where possible, don't be afraid to negotiate with a business to remove the arbitration clause. Some companies, particularly those with smaller operations and fewer customers, may allow the party with whom you are negotiating to make some concessions to close a deal. If you have any additional bargaining power based on the size of your agreement or the company's need for your business, don't be afraid to demand changes to protect yourself in the event of a dispute.

Second, when executing standardized agreements dictated by the provider, take care to closely review the arbitration clause. As explained further below, some arbitration agreements are so one-sided that courts will not enforce them. To make the agreement appear more fair, some companies include a provision that allows you to opt out of the arbitration clause by sending them a letter, usually within a short time after you enter the contract. These companies include the opt-out provision because they know an overwhelming majority of consumers will never discover it. Similarly, some companies will make an exception to the arbitration clause to allow you to file suit against it in small claims court, up to a specific dollar amount. Review every contract you sign or online agreement you accept for an opt-out provision, and if it's included, be sure to immediately comply with the stated opt-out requirements. This includes your contracts for credit cards, cable and satellite services, internet and cell phone providers, home security systems, private student loans, consumer banking, sharing economy employment agreements, online retail accounts, and software services. Click here to see a list of companies that use forced arbitration clauses and those which give you the opportunity to opt out. However, you should always review the contract yourself to see if opting out is an option.

Third, if you find yourself in a dispute and subject to an arbitration agreement, you should contact an attorney to discuss your options. Courts have refused to enforce some arbitration clauses on the grounds that they are unconscionable. An arbitration agreement may be so unfair, given the inequalities between the parties as to age, intelligence, and bargaining power, that a court will refuse to enforce it. Additionally, courts may refuse to enforce arbitration because of one party's unfair use of oppression and surprise in the negotiation process. Whether a court will declare an arbitration clause unconscionable depends highly on the facts of each case. If you have questions concerning the scope and enforceability of a specific arbitration provision, you should consult with an attorney.