National Arbitration Forum

Paul Bland

National Arbitration Forum’s Wall of Secrecy Begins to Crumble

While very few of them actually know it, courts would say that tens if not hundreds of millions of Americans have “agreed” that if they ever have a dispute against various powerful corporations, that their dispute will be decided by an organization named The National Arbitration Forum (or “NAF”). Who is the NAF? What is its background? Is it really a neutral organization, or is it likely to favor one side or the other in disputes?

Let me put my own “biases” on the table at the outset. Based upon extensive investigation and interviews with literally hundreds of people, my law firm, Trial Lawyers for Public Justice, has argued vociferously in several different court cases around the nation that the NAF is not a truly neutral organization. Instead, we have argued, NAF has conducted itself in ways that suggest that it in disputes between consumers and large corporations (and particularly banks and other lenders), that the NAF as an institution is pre-disposed to favor the corporations and lenders.

A great deal of background about this organization is set forth in a legal brief that we filed in a case in North Carolina called McQuillan v. Check N Go. A copy of this brief is posted on the website of my law firm, www.tlpj.org, along with hundreds of pages of evidence, that anyone can download for free. You can find affidavits from consumers who swear that they had terrible experiences with the NAF, an expert affidavit from a law professor who studied the way NAF conducted arbitrations in a certain category of non-consumer cases and concluded that NAF has a systematic tendency to favor the more powerful party in those disputes, a series of advertisements and solicitations that NAF has used to try to get banks and other large corporations to write it into their standard form agreements where the NAF has made statements that we argue show a pre-disposition to favor the corporations, and other similar evidence. I should make clear that the trial court in the McQuillan case did not agree with our challenge to the NAF as biased, holding in essence that a consumer can’t challenge an arbitration company as biased in advance, but must instead wait until after the arbitration is complete to raise that question, and also holding that some of our evidence was hearsay and not admissible. That ruling is on appeal, and our brief in the appeal is also available on TLPJ’s website.

It has been very difficult to gather much information about the NAF, though. It is a closely held corporation that vigorously resists answering questions about itself in court. In a series of cases where individuals have sought to challenge the NAF’s status as a neutral (consumers and employees in these cases have had mixed results, winning some challenges and losing others), NAF has refused to respond to subpoenas and has gone to court seeking court orders quashing the consumers’ discovery requests. In a number of cases where consumers have been able to get past these obfuscations, courts (mostly state courts in Minnesota, where the NAF is based, and where a consumer must generally go to fight for information about the secretive organization) have only allowed the consumers to learn key facts under stringent gag orders that make it impossible for other persons to find out what those consumers had learned.

This is a very interesting read and the rest of the article can be found at The Civil Defense Blog
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