Excessive Arbitration fees. Do you have to arbitrate?

The fees associated with the National Arbitration Forum are excessive and would effectively prohibit the plaintiff from pursuing her statutory and common law claims. The United States Supreme Court in Green Tree Financial v. Larketta Randolph 531 U.S. (2000) held that excessive arbitration costs form a basis to challenge the enforceability of an arbitration clause. The Court did, however, hold that it is the plaintiff’s burden to demonstrate this fact. The Supreme Court did not undertake such an analysis in Green Tree because no such facts were presented to the Court.

The costs associated with arbitrating a case consistent with National Arbitration Forum guidelines would require the plaintiff to pay excessive fees which are unconscionable in light of the plaintiff’s financial condition. The plaintiff brings home approximately $372.00 per week working as an operator for Verizon. The plaintiff’s expenses are approximately $1,500.00 per month. The plaintiff is a single mother and resides with her mother and daughter in South River, New Jersey. The plaintiff has $1,600.00 in the bank between checking and savings accounts. The National Arbitration Forum fees and costs demonstrate the cost structure associated with filing a claim. There are four types of hearings: Document Hearings, Telephone Participatory Hearings, On-Line Participatory Hearings, and In-Person Participatory Hearings. There are also filing fees ranging from $150.00 to $14,252.00. The minimum hearing fee for an In-Person Participatory Hearing is $500.00 for the initial session plus $450.00 for each additional session. This is for hearings where the amount in dispute ranges from $15,000 to $25,000. Claims which range from $250,000 to $500,000 cost $3,000.00 for the initial session and $2,000 for each additional session.

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