National Arbitration Forum

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The National Arbitration Forum (NAF), founded in 1986, provides arbitration and mediation services to businesses, based at its Minneapolis, Minnesota headquarters and offices in New Jersey. As of 2008, the National Arbitration Forum administered over 200,000 cases a year, most of which were consumer debt collection cases.[1] In 2009, the National Arbitration Forum ceased administration of new consumer arbitrations as part of a consent decree with Minnesota Attorney General Lori Swanson concerning the NAF's ties with debt collection firms.[2] The company maintains a panel of over 1,600 arbitrators and mediators who are attorneys and former judges located across the United States and in 35 countries around the world.[3] Panelists arbitrate and mediate the disputes.

The company is an "approved"[4] dispute resolution service provider of ICANN domain name disputes and has handled more than 7,600 cases.[5]

History[edit]

The NAF was founded in 1986 as a subsidiary of another company, Equilaw, which subsequently went bankrupt in 1994. NAF survived the bankruptcy and appears to have grown rapidly in recent years.[6] The NAF and Lawyers Associated Worldwide (LAW) work together on an international level.[7] The National Arbitration Forum is located in Minneapolis, Minnesota.

Domain name disputes[edit]

An approved domain name dispute program provider for ICANN, the NAF has administered over 10,000 domain name disputes since 1999.[8] The number of domain name disputes administered is on the rise, up 143 cases from 2006 to 2007. The NAF deals predominantly with registered domain names that are abused by parties who have no legitimate rights to them. Some of the famous trademarks involved in NAF domain name dispute resolutions include Los Angeles Angels, Disney, Hershey's Kisses, Jimmy Buffett, and Univision.[9]

Controversy[edit]

Consumer advocacy groups and attorneys frequently claim that the National Arbitration Forum is the most biased against consumers of the major arbitration organizations.

In its June 16, 2008 cover story, Business Week published an in-depth look at credit collection arbitrations at NAF. The story describes how NAF markets itself to collection lawyers and then works with them in ways that raise questions about its impartiality.[10]

Public Citizen study[edit]

In 2007, non-profit consumer advocacy group Public Citizen criticized the National Arbitration Forum, including its fee schedule and alleged bias.[11]

According to a July 2008 Navigant analysis of the Public Citizen data,[12] 26,665 arbitrations out of a total of 33,948 arbitrations were either heard or dismissed (i.e. excluding settlements). According to the analysis, of these 26,665 arbitrations, consumer parties were reported to have prevailed outright or had the case against them dismissed in 8,558 cases (32.1%). In an additional 4,376 cases (16.4%), the arbitrator did not award the full amount demanded by the business.

In March 2010,[13] a study of the National Arbitration Forum's record of panelist appointments for domain name disputes was published.[14] It raised concern that a small handful of the NAF's roster panelists were appointed to hear disproportionately many cases. In one instance, a single panelist was appointed to hear 949 cases, or about 10% of all NAF domain name dispute cases ever heard. In August 2012, the study was updated and it showed a continued concentration of panellists appointments wherein seven NAF-selected panelists were appointed to hear nearly half of all cases.[15]

Legislation and lawsuits against NAF[edit]

City of San Francisco lawsuit[edit]

In March 2008, the City of San Francisco filed a lawsuit against the National Arbitration Forum on behalf of its citizens, accusing the arbitrator of unfairly favoring credit card companies in disputes with their customers.[1] The city alleged that the NAF was practicing unethically and wrongly with such specific concerns as ignoring evidence, inflating awards and declining hearing requests by consumers.[16] The lawsuit said that between January 2003 and March 2007, consumers won 0.2% of the 18,075 arbitration cases in California that were not dropped, settled or otherwise dismissed.[1]

Businessweek's allegations of bias[edit]

In June 2008, Businessweek made broad claims of NAF's bias in favor of consumer creditors and hidden conflict of interest. According to the article, NAF markets itself to consumer credit providers, collection agencies and law firms.[17]

Ex-employee lawsuit[edit]

In April 2009 an ex-employee filed suit against NAF "for employment discrimination, deceptive trade practices and consumer fraud." The suit said that "During the course of plaintiff’s employment at defendants, she witnessed fraudulent and corrupt practices in the administration of arbitration cases."[18]

Minnesota Attorney General lawsuit[edit]

On July 14, 2009, the Minnesota Attorney General brought a lawsuit against the National Arbitration Forum for consumer fraud, deceptive trade and false statements in advertising.[19] Key to their complaint was allegations that the NAF had deliberately hidden its ties to the businesses it represented and actively encouraged their naming as mandatory arbitrators in contracts.[20] The National Arbitration Forum countered that its arbitrators were independent practitioners, which ensured that its arbitration was impartial.[21] However, citing legal costs, the National Arbitration Forum agreed the week after the filing to stop accepting consumer debt collection cases for arbitration.[22][23]

See also[edit]

References[edit]

  1. ^ a b c Berner, Robert; Grow, Brian (June 4, 2008). "Banks vs. Consumers (Guess Who Wins)". Bloomberg Businessweek. Retrieved 18 December 2013. 
  2. ^ Berner, Robert (2009-07-19). "Big Arbitration Firm Pulls Out of Credit Card Business". Business Week. Retrieved 3 March 2013. 
  3. ^ National Arbitration Forum : Locations
  4. ^ ICANN
  5. ^ Domain Mangazine
  6. ^ Citizen.org
  7. ^ Lawyers world wide
  8. ^ Domains
  9. ^ DN Forum
  10. ^ Business Week
  11. ^ MacLeery, Laura (October 11, 2007). "New Public Citizen Report Shows that Credit Card Companies Set an Arbitration Trap to Ensnare Consumers". Public Citizen. Retrieved 18 December 2013. 
  12. ^ Institute for Legal Reform
  13. ^ Domain Name Dispute Stats Reveal Concern Over Panelist Appointment
  14. ^ Dnattorney.com web site
  15. ^ DNattorney.com Domain Name Dispute Study, August, 2012
  16. ^ "National Arbitration Forum case". San Francisco City Attorney. Retrieved 18 December 2013. 
  17. ^ Businessweek``, 5 June 2008, [1]
  18. ^ Counterpunch, 20 July 2009, Judicial Apartheid: Heralded by the Supreme Court as Fair, Vast Private Judicial System Exposed as Fraud
  19. ^ Swanson, Lori (July 14, 2009). "State of Minnesota v. National Arbitration Forum, et al. Complaint". State of Minnesota. Retrieved 18 December 2013. 
  20. ^ Weiss, Debra Cassens (July 15, 2009). "Minn. AG Sues Credit Card Arbitration Company, Claims Hidden Industry Ties". ABA Journal. Retrieved 18 December 2013. 
  21. ^ Chu, Kathy; McGraw, Taylor (July 15, 2009). "Minnesota lawsuit claims credit card arbitration firm has ties to industry". USA Today. Retrieved 18 December 2013. 
  22. ^ Abeska, Timothy J. (December 2, 2013). "Two Recent Cases Address What Happens When the Arbitral Forum Selected by the Parties is Not Available". National Law Review. Retrieved 18 December 2013. 
  23. ^ "State of Minnesota v. National Arbitration Forum et al., Consent Judgment". Voice of San Diego. 17 July 2009. Retrieved 18 December 2013. 

External links[edit]