Testimony Gets Emotional During Arbitration Bill Hearing At Capitol

By Shaun Boyd

DENVER (CBS4) - Testimony at the state capitol in an effort to level the playing field when it comes to contract disputes got emotional.

Lawmakers are hearing two bills dealing with arbitration clauses - boilerplate language in contracts almost all of us have signed at some point - that give companies the advantage if there's a dispute.

Contracts with cell phone carriers, banks, daycares, nursing homes, and most employers include the clauses. They not only require binding arbitration, the company can pick the arbitrator and where the arbitration takes place.

Alma Jones found out the hard way that her health insurance company had an arbitration clause, "You feel powerless." She was walking a dog when she was yanked face first to the concrete, resulting in $45,000 in medical bills. She says her insurance company refused to pay, and when she appealed, said her only option was arbitration that, she says, was rigged in their favor.  "We can't fight them because they have their own lawyers; they have their own rules."

Representative Mike Weissman is carrying a bill that would require arbitrators disqualify themselves in a case if they, their family or any associate has even a potential conflict of interest, "They are forcing individuals - consumers and employees - into this alternative pathway, keeping out of court with dispute, and then they are picking the person who will stand in the shoes of the judge."

Representative Cole Wist says arbitrators are already held to the same ethical standard as judges and the bill, he says, will only force more cases into costly court cases that can take years to resolve, "It seems to me in most cases arbitrators will be disqualified and its going to drive more and more cases into litigation."

Alma Jones ended up suing - despite the arbitration clause - and won, "Big companies need to be more clear and more fair to everybody." Her attorney, Sean Dormer, says in many cases, where a couple hundred or a couple thousand dollars are on the line, people give up, "There are a lot of people who just get swept under the rug and don't get any kind of justice."

The other bill lawmakers are hearing would require arbitrators publicly post cases including who won and how much. Many arbitration clauses also include language that prevents people from talking about the dispute publicly.

Even if the bills pass, and republicans are largely opposing them, they will almost certainly be challenged in court as violations of the Federal Arbitration Act.

Shaun Boyd is CBS4's political specialist. She's a veteran reporter with more than 25 years of experience. Follow her on Twitter @cbs4shaun.