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Arbitration may not be your best defense!

81 posts in this topic

Yes it could happen, but you have to weigh the alternate path...are you going to win in court?

If you are, then don't arbitrate, beat them in court!

My position is: If something ridiculous were to happen, i can always BK them out.

(For me, anything like that is 2-3 years away, and by then everything else will have fallen away on SOL and I could just Ch. 13)

There are always risks, but you have to remember BK is always your ace in the hole to something incredibly adverse.

I find its worth the risk. But I may play on a different scale. To me, $10,000 in arbitration fees would not be a big deal, relative to the numbers I play with.

So if screw up on arbitration, you can always: pay $10,000 in arbitration fees or file a BK? Not exactly a ringing endorsement of arbitration.

EDIT *****I want to make sure I disclose that, under Wisconsin Consumer law, I would NEVER be responsible for arbitration fees. The Wisconsin Consumer Act under Chapter 425 prohibits merchants (which includes JDB's, OC's, CA's, Lawyers, etc) from imposing terms that, ""jeopardize money or property beyond the money or property immediately at issue in the transaction." TRANSLATION: WISCOSNISN CONSUMERS CAN NEVER BE FORCED, LEGALLY, TO PAY JAMS ATTORNEY FEES. So my state law provides incentive to run the Cap1 bill in arbitration.

....and the arbitration tactics presented here only work in Wisconsin.

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Well I can safely say I would never claim residence anywhere other than where I reside, in my book that's asking for trouble.

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I'm not implying you do that. However, if you do want to establish WI residency, it takes only 10 days.

Wisconsin is not only state that has this protection, so always check your state law.

The possibility of JAMS arbitration fees being assessed to you, if you lose, exist, but its not very common according to the case manager I talked with at JAMS.

Absolutely stay in court if you think you can beat it there. Arbitration is a tool and that tool does have some risk.

I'm still not convinced Cap1 can get its claim heard in JAMS. If that's the case, you can just mutually agree to dismiss YOUR CLAIM when counterclaim timeline is up for an award of $1 against Cap1.

Defending in court can be a good choice to, but just so you know there is a lot more chocies for consumers these days.

Just win, wherever you are!

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I posted this in another thread and am going to repeat it here:

Don't you think there is a reason why NAF can no longer do arbitration? It's mainly because it does not favor the consumer, only the credit card company. The credit card companies did not pull out of abitration due to the fact it doesn't favor them, but only because they didn't want to be tainted by association with NAF.

It's not just the credit card companies that are having their feet held to the fire over arbitration clauses in their contracts. Our member calawyer has written extensively over his fights to get rid of mandatory arbitration clauses.

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=227015&highlight=public+justice

Submitting yourself to arbitration constitutes giving away your rights. You are not doing yourself any favors.

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I understand both thought processes to this argument but I am not completely sold that arbitration is totally bad. If the creditor (OC) knew they had you dead to rights they would never object to arbitration no matter who was the administrator. You would file your Motion in Court and the opposing attorney would just agree and off goes creditor to the slaughter. Before July 2009 all the comments, posts and threads on this site were about getting out of arbitration and the opposing attorneys fighting to keep you in arbitration … so my ADHD side of the brain says “what gives”? If it is the proverbial slam dunk why are they fighting to keep you out of arbitration now? I think case law will be defined in the next few months concerning this tactic. If you read Trueq’s posts he admits Capital One did offer to settle (OC and not collection attorney) and I would bet for much less then what he owes … he decided he had a legal argument that he wanted to pursue. I would think if you were dead to rights and looking a summary judgment maybe this ticket is one you might try and pull. An offer from Capital One vice the collection attorney might be a bit more favorable (I have not read one post where the CA offered anything less then 80%). Everyone needs to read their states arbitration laws inside and out … they need to read the arbitration agreement and make a sound choice they can live with. I think to some the process will scare them off and the others need to realize you have to be at the top of your game. Skilled negotiators never blink nor show worry and that is precisely what you would have to do if you went this route. If your nervous about litigation and calling people out then this is not the game to play. We all know the tactics to beat the JDB but the stakes are much higher when you deal with an OC who might have the "goods" on you. I work in a ghetto so I don’t scare to easy!

Edited by MG05

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IT PROHIBITS ARBITRATION FEES BEING AWARDED TO EITHER PARTY REGARDLESS OF OUTCOME OF ARBITRATION!

I ran it by an attorney and he agrees!

TRANSLATION:

Cap1 pays all under JAMS (except first $250, only if consumer initiates arbitration and only if consumer does not get fee waiver).

SO RUN THE ARBITRATION BILL!!!!!

As long as it qualifies as a consumer arbitration, I think the fear of getting arbitration fees awarded against you is very small based on contract language in Cap1 agreement.

Edited by trueq

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Trueq is right ... states that in both the 2005 and 2008 agreements.

Florida law 682.11 Fees and expenses of arbitration.--Unless otherwise provided in the agreement or provision for arbitration, the arbitrators' and umpire's expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.

Florida law says not including counsel fees and the Capital One arbitration agreement seems to cover the "unless otherwise provided" ... Capital One says they will foot their own bill! I just use the exhibit “customer agreement” they brought the lawsuit in on … Perhaps NAF did not run a big tab on Capital One and that is why they would pay their own fees.

I might be wrong with this ... but I know if I lose a summary judgment I am out interest and attorneys fees...

Edited by MG05

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I will be curious to see if Capital One pays the tab for Trueq’s arbitration. I know they paid the $250.00 but that might have been bluff money. This will be interesting! I imagine the new lawyers will research Wisconsin law and will give Capital One a very informed decision whether to pay that arbitration bill. If I had to guess the case will be dismissed and Trueq will get a check with confidentiality clause attached. What is in Trueq’s wallet … Capital One settlement money! LMAO

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Trueq is right ... states that in both the 2005 and 2008 agreements.

Florida law 682.11 Fees and expenses of arbitration.--Unless otherwise provided in the agreement or provision for arbitration, the arbitrators' and umpire's expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.

Florida law says not including counsel fees and the Capital One arbitration agreement seems to cover the "unless otherwise provided" ... Capital One says they will foot their own bill! I just use the exhibit “customer agreement” they brought the lawsuit in on … Perhaps NAF did not run a big tab on Capital One and that is why they would pay their own fees.

I might be wrong with this ... but I know if I lose a summary judgment I am out interest and attorneys fees...

In Florida attorneys fees are set by the court. You get an arbitration award and then the parties return to the court for a hearing on attorneys fees. If an arbitrator awards fees (assuming someone objects) the court will set it aside and have its own fee hearing.

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My question again would be how can the Florida courts change what the agreement calls for? If the arbitration is followed per agreement and fees and attorneys costs are stipulated prior to commencement of arbitration how can they change it arbitrarily and award attorney fees? I would not commence the arbitration until the clarity of the customer agreement is resolved between the parties and the arbitration administrator.

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My question again would be how can the Florida courts change what the agreement calls for? If the arbitration is followed per agreement and fees and attorneys costs are stipulated prior to commencement of arbitration how can they change it arbitrarily and award attorney fees? I would not commence the arbitration until the clarity of the customer agreement is resolved between the parties and the arbitration administrator.

If the contract under which arbitration is brough states each side bears their own fees and costs, then that may keep you from paying those. Just beware of any language like "except as provided in this Agreement" as your contract may allow for the prevailing parties attorney's fees elsewhere in the contract.

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FlaLawyer are you referring to RULE 1.525. MOTIONS FOR COSTS AND

ATTORNEYS’ FEES? If so ... would it be hard to request attorney fees if in the counter-complaint or action did not request attorney fees? If they did and objection was made prior to the commencement of arbitration based upon the customer agreement and the attorneys fees were removed from the counter-complaint or action how could they then come back and ask for attorney fees? Am I mistaken but aren’t all of these issues addressed prior to commencement of arbitration?

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I think the issue of fees is addressed in the JAMS rules of consumer minimum standards, copied from their website...

7. With respect to the cost of the arbitration, when a consumer initiates arbitration against the company, the only fee required to be paid by the consumer is $250, which is approximately equivalent to current Court filing fees. All other costs must be borne by the company including any remaining JAMS Case Management Fee and all professional fees for the arbitrator's services. When the company is the claiming party initiating an arbitration against the consumer, the company will be required to pay all costs associated with the arbitration.

I think it's important to notice the sentence "All other costs must be borne by the company including any remaining JAMS Case Management Fee and all professional fees for the arbitrator's services."

Now, that being said, I think it's safe to say that if the plaintiff prevails, they could include attorney fees in their claim and be awarded such, ONLY if they included those fees in the initial claim.

Just my two cents worth....xdancex

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So now we're down to the benefits of arbitration being that you don't have to pay attorney's fees - maybe.

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So now we're down to the benefits of arbitration being that you don't have to pay attorney's fees - maybe.

To me the benefit of arbitration is that crap1 is now willing to negotiate. My plan isn't to drag it out as long as possible. My plan is to get them to settle. w/o feeling I have been raped in the process.

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This is more than a bit of a wildcard here. Completely uncharted territory. Fortunately, I live in Wisconsin, where trueq has already blazed a trail that is at least applicable to MY state.

Several points:

First, almost no conscientious lawyer would recommend the arbitration strategy. This is SO unpredictable. Encouragement to persue this strategy at this point would border on legal malfeasance, if it were done with a client. (WI being a notable exception). There is a good reason why lawyers often follow a safe and conservative path. Because it's safer! It is not a good idea to recommend a strategy that blows up in the face of your client. (There are those who say Martha Stewart's biggest problem was listening to the wrong lawyer, but I digress...).

Second, if you have a case you can win in court, it is almost always better to go ahead and win in court. Take a sure and permanent victory in court, rather than a chance at a victory in arbitration.

Third, this depends to some extent on your personality. When you are watching your favorite football team in a 4th and short situation, do you scream "GO FOR IT!" at the TV, or do you quietly hope they will punt? Do you like to mix things up a bit? Do you have the nerves to try an uncharted course?

Fourth, in many cases this is a desparation play. Both Eagles and Packers fans remember a playoff game few years back when the Pack D got the Eagles where they needed a first down to have any chance to win, and the Pack sacked McNabb a few times. 4th down and 26, and somehow McNabb got the first down and then the touchdown and the win. Hail Mary!

So, unless you are in Wisconsin, arbitration may be a Hail Mary play. Not a substitute for a grind-it-out plan. OTOH, if you NEED a Hail Mary play...

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I went from facing the top law firm court, receiving thee TOP national ACA award for its legal prowess and effectiveness in WI courts, that always has the documents as required by WI law, about to be racked up on SJ....to

Getting the local law firm fired, negotiating power against Cap1, facing an AL law firm in JAMS, with no knowledge of WI law, ability to pick my "judge" and sole discussion of my claim against Cap1, with no Cap1 claim against me in site yet, and punishing Cap1 for $2150 in arbitration fees to start....

That is a little more substantial than worrying about the "arbitration fee" situation if I were to lose (assuming it gets that far).

The issues I mention above can be done anywhere. I do have a couple more safeguards in WI against arbitration, but you can't argue with this result so far.

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The issues I mention above can be done anywhere. I do have a couple more safeguards in WI against arbitration, but you can't argue with this result so far.

So you've won all of your cases and gotten summary judgments against all of them?

If and when you do, I will reconsider this method.

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So you've won all of your cases and gotten summary judgments against all of them?

If and when you do, I will reconsider this method.

It depends on what you consider victory.

A case never filed is not a victory, nor is it a loss.

A case stayed until the creditor files, and the arbitrator isn't filing, is not a victory, nor is it a loss.

A case in which the consumer files for arbitration, and the creditor cannot counterfile may be a victory. (We won't know if this is the case for a while. I think trueq said he would know by December 1?)

If the SOL runs out, that IS a victory.

Of course, it would be far better to win SJ or dismissal WITH prejudice than to arbitrate. That is why many of us are saying this is a desperation play.

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I read the thread. It is not clear if this is a court sponsored arbitration or a third party arbitration.

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On that thread we have not determined whether that is court ordered ADR or Contractual arbitration.

If Cap1 exercised contractual arbitration...that would be the dumbest legal strategy on their part. Cap1 cannot initiate their arbitration claim with JAMS, NAF, or AAA as denoted in their contract. If Cap1 did this, their claim would be dead! Cap1, to survive, would have to get the clause they exercised struck, or get agreement from person they are suing on an alternate arbitration forum.

If its court system, alternative dispute resolution (ADR), I VEHEMENTLY OPPOSE THAT! Court system ADR can be as bad as NAF!

This thread is still unclear on which form of "arbitration" we are talking about!

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Cap1 cannot initiate their arbitration claim with JAMS, NAF, or AAA as denoted in their contract.

Why not? Isn't that what all the other banks using NAD did? The contracts didn't always specify a specific company - they just said arbitration. There are tons of other arbitration companies still out there.

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1.) NAF is forbidden by MN AG to take credit card cases from Cap1.

2.) AAA has STOPPED taking credit card arbitration cases from Cap1. (AAA is reworking its cpnsumer procedures to insure it does not suffer fate of NAF.)

3.) JAMS, "doesn't do debt collection arbitration", this was from JAMS chief legal counsel Jay Welsh at FTC Roundtable on 9/29/09-9/30/09. JAMS does not accept cases from credit card companies to collect debt. (I'm testing whether JAMS will take the CC debt on a countercliam.)

Those are the only 3 choices in Cap1 contract. So if Cap1 exercised contractual arbitration, they would screw themself. In my state, a court order to arbitrate is non-appealable. So litigation rights would never be restored once contractual arbitration is selected by either party!.

This asssumes Cap1 would be the "initiator" if they elected arbitration. I do know AAA will take the debt as a counter claim if consumer were to initiate in AAA. Its still unclear if JAMS will take the counter cliam for "debt collection" when you initiate a JAMS arbitration complaint against Cap1.

Remember...NAF is out....they did 216,000 debt collection credit card arbitrations in 2006

AAA, by comparison, did about 900 credit card arbitrations in 2007, but that included complaints initiated by consumer for issues other than debt collection too! Consumers won 54% of the time when they initiated in theat group.

So with NAF out, AAA, and JAMS not doing debt collection arbitration...Cap1 waiving its litigation rights is the best possible scenerio next to Cap1 dismissing with prejudice.

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Those are the only 3 choices in Cap1 contract. So if Cap1 exercised contractual arbitration, they would screw themself. In my state, a court order to arbitrate is non-appealable. So litigation rights would never be restored once contractual arbitration is selected by either party!.

That's right - you will not get your litigation rights back if you elect arbitration - and if you lose - you're kinda up the creek.

And there are 1000s of small arbitration companies out there. Just because the Feds shut down the "arbitration mills" NAF, AAA, etc. doesn't mean there aren't plenty of places to take a case for arbitration.

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