Minnesota Attorney General Lori Swanson criticized the mandatory arbitration industry Thursday in testimony before a U.S. Senate panel.
The hearing was held by Sen. Al Franken, D-Minn., a critic of mandatory arbitration and author of legislation limiting its use in workplace disputes involving defense industry workers. Also present was Sen. Amy Klobuchar, D-Minn.
Swanson, who has testified in Congress before against mandatory arbitration, cited her 2009 suit against the Minnesota-based National Arbitration Forum (NAF), the nation’s largest consumer arbitration company.
The suit alleged pervasive bias against consumers by a private dispute resolution company that is “in essence an arm of the collection industry.”
A settlement led the NAF to step aside from its credit card debt arbitration business.
Sen. John Cornyn, a Republican on the panel, called arbitration a cost-effective alternative to the public court system for resolving private disputes.
Victor Schwartz, representing the U.S. Chamber of Commerce, said that "no one is forced to sign arbitration agreements."
According to Swanson, millions of people give up their legal rights because of "fine print" language in consumer contracts.
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