The American Arbitration Association (“AAA”) is the largest organization in America that administers “private trials” for disputes that companies force consumers to final and binding lawsuits that are not handled in public. In the past couple of decades, many companies have started using clauses in the “fine-print” of consumer agreements so they cannot face a public jury trial. Such clauses have become routine in termite bonds.On February 3, 2015, the AAA cited rule violations by Knox Pest (a regional pest control company based in Columbus, Georgia) as the reason it will not allow arbitration of a fraud claim in Birmingham, Alabama and why the company must revise all of its consumer agreements which say AAA will hear complaints. AAA said leaving the provision in consumer contract will mislead consumers into believing AAA will handle disputes. That may deceive consumers. As a practical matter, this has two important consequences for Knox customers.
First, a public jury trial will be available to resolve claims of widespread fraud at Knox. Alternatively, some consumers may ask local judges to pick a fair arbitrator to hear their dispute.
Second, Knox will have to propose amendments to all consumer contracts so its customers know they cannot be forced to have disputes resolved in private hearings before the AAA.
According to Campbell Law PC principal Tom Campbell, “This admirable decision by the AAA should benefit consumers in the long-run. Public trials serve an important role. Wrongdoing is exposed instead of being covered-up. For example, evidence that Knox’s CEO ordered doctoring records to cover-up non-existent or deficient termite treatments needs to be explored in a public trial. That is what our Founding Fathers expected.”
The story can be read here.