Arbitration Clauses
by Daniel Steven

          Q.. My latest publishing agreement includes an arbitration clause.  Should I accept it?

          A.  No.  It sounds counter-intuitive, but litigation usually is a better option for authors (and consumers in general) than arbitration.  Arbitration (not to be confused with mediation) is an “alternative” method of dispute resolution.  In general, two disputing parties present their individual sides of an argument or complaint to a supposedly neutral arbitrator or panel of arbitrators, who weigh the facts and arguments of both parties and decide the dispute.  Although arbitration may be either voluntary or mandatory, the typical arbitration clause in an publishing agreement is mandatory (voluntary arbitration, of course, always is an option in any dispute).

So what’s wrong with mandatory arbitration -- and avoiding court?

• Arbitration can be  expensive. Claimants often must pay substantial arbitration fees and unless your case is minor, you still will need an attorney.  


• Arbitration does not follow clear, well-established, consistent rules and procedures such as those required in the courts.  For example, “discovery” (procedures that enable one side in a dispute to request information from the other) may be limited. Traditional rules of evidence may not apply, and you or your attorney may have more difficulty getting information needed to support your claim than you would in court.  


• Arbitrators often ignore legal precedent into account in making their decisions, although they are supposed to do so.  This means outcomes are less dependable, and you may be taking a bigger risk in bringing a claim.


• Most decisions cannot be appealed.


• Most arbitrators are pro-business. The publisher typically picks the arbitration company in the arbitration clause.  Any arbitrator who decides in your favor against the publisher will be unlikely to be designated to decide any cases involving that company in the future.  Although I am unaware of statistics on publisher-author arbitration, studies of typical consumer disputes that are arbitrated by such outfits as the National Arbitration Forum show businesses win over 90% of the time, and that a small number of arbitrators handle 9 out of 10 cases.

In summary, mandatory arbitration clauses generally favor the publisher. Often an author’s only real clout is the threat of a lawsuit. Here’s an alternative to the publisher’s clause, which preserves your right to go to court:

Daniel Steven is Chairman of the MWA Contracts and Grievances Committee and a publishing and media attorney (www.publishlawyer.com).  This column provides general legal information; consult an attorney for application of the law to your specific circumstances. 

© 2010 Daniel Steven