WASHINGTON — Businesses may use standard-form contracts to forbid consumers claiming fraud from banding together in a single arbitration, the Supreme Court ruled on Wednesday in a 5-to-4 decision that split along ideological lines.
Though the decision concerned arbitrations, it appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do, the decision suggested, is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.
“The decision basically lets companies escape class actions, so long as they do so by means of arbitration agreements,” Brian T. Fitzpatrick, a law professor at Vanderbilt University, said. “This is a game-changer for businesses. It’s one of the most important and favorable cases for businesses in a very long time.”
I would expect any contract that doesn't already have Mandatory Binding Arbitration written into it to include it in the near future, as there's simply no incentive to allow your consumer base the right to file a class action lawsuit (or class action arbitration) against your company. That's just bad business.
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