I am writing this complaint because it is important to realize that binding arbitration is a dangerous clause to agree to in any contract.
When I signed a binding arbitration agreement in a business partnership contact, I didn't realize what I was getting myself into. Like most people, I had only vaguely heard of arbitration. When I did some research, arbitration seemed like a fair and honorable process. In fact, JAMS (Judicial Arbitration & Mediation Services) came highly recommended.
When a business dispute broke out between me and several individuals, the case had to go to arbitration as was stipulated in our contract. I believed in the "mediator ethics" section of JAMS, and felt that the case would be resolved fairly. I was very, very, very wrong.
First of all, the arbitrator selected failed to disclose the fact that he was not only good friends with the opposing counsel, but that they had both worked together on many cases in the past. Additionally, the opposing counsel had worked as the arbitrator's legal clerk when the opposing counsel was younger.
As is stated in the contract you must sign when working with JAMS, all arbitrators are guaranteed to be neutral. To honor the contact signed, the arbitrator was obligated to excuse himself from my case as this was a clear conflict of interest. The fact that the arbitrator continued to preside over my case can be considered nothing other than fraud.
Despite the fact a real court in San Francisco had ruled in my favor declaring the actions of the other party and opposing counsel illegal, the arbitrator decided to help out his friend the opposing counsel. Not only did the arbitrator overrule a decision made by a real court, but he specifically laughed when the opinion of the real judge cited the Supreme Court of California ruling on a similar case in my favor. All the arbitrator said was "the Supreme Court was meant to be overturned all the time." So, after spending over $50,000 for the arbitrator's time and $400,000 in legal fees, the arbitrator simply ruled in the opposing party's favor and completely reversed all damages I was paid in a real court of law.
To make matters worse, I discovered that there is no recourse for those who feel that they have been wronged by JAMS. When I wrote a letter complaining about the conflict of interest to the general counsel of JAMS Jay Welsh, he simply sent me an email telling me that I could try and sue the company if I felt wronged, and that he had more important things to do than worry about ethical conflicts with arbitrators.
I warn you now, never ever go to arbitration. You will get screwed. You will have no recourse. The arbitrator is free to do whatever he wants. As far as the law is concerned, the arbitrator is judge, jury, executioner. Once you step into a JAMS "courtroom," you are entering a kangaroo court, where the arbitrator completely above reproach.
San francisco, California