Alex Brauer Discusses Inclusion of Mandatory Arbitration Clauses in Business Contracts

Bailey Brauer attorney tells Houston Chronicle that cost, finality has some rethinking mandatory arbitration DALLAS – Designed to keep business disputes out of the courtroom and long a staple in a wide range of contracts, mandatory arbitration clauses are drawing increased scrutiny from consumers, businesses and lawmakers. Bailey Brauer co-founder Alex Brauer told the Houston Chronicle that while many still find them effective, some businesses are starting to rethink their use due to the costs and finality of arbitration. Mr. Brauer recounted, in the March 22, 2018, article “Mandatory Arbitration, Common Foe of Car Buyers, Bank Customers and Porn Stars, Under Attack,” the case that caused one client to sour on mandatory arbitration. After a hearing, the arbitrator found that the other party could not prevail on its claims, but issued a nominal award of $1 in damages. As the respondent, Mr. Brauer’s client was required under the arbitration provision to pay the “prevailing” party’s legal costs of approximately $200,000. "We try to appeal but the courts say, ‘No, you signed up for this,’" said Mr. Brauer. "You don’t know what you’ll get." To read the entire Houston Chronicle article, click here.