Consumer Law

Business pursuing anti-consumer legislation in this economy?

By Sam Glover

It just goes to show you: there is no time like the present. Even if the present is an economic mess caused by the lack of effective regulation and the plan is to introduce anti-consumer legislation to hamstring consumer (and, for good measure, civil rights) laws.

Democratic legislators in Minnesota recently introduced two bills: one that would eviscerate attorney fee provisions, and the other that would protect businesses' who want to insert mandatory binding arbitration provisions in consumer contracts.

The first bill would require courts to ?take into consideration the reasonableness of the attorney fees sought in relation to the amount of damages awarded to the prevailing party.? Since most consumer protection laws contain small statutory damages awards, this would give defendants an incentive to dig in their heels on meritorious claims. And, of course, deter consumer rights lawyers from asserting consumers' rights in court.

The second bill would ensure that businesses will be able to force consumers into binding arbitration whether they like it or not. This is my favorite line in the bill: "The court may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not [been] established." (The word "been" is missing from the bill text.) In other words, even if the claims are completely frivolous, companies could drag consumers into arbitration.

Not exactly the kind of legislation that will help consumers avoid the traps that led to the debt crisis. It would not surprise me to see businesses and special interests trying to catch consumers unaware in other states, as well.

Attorney fee provisions about to be eviscerated | Caveat Emptor

(photo: roger g1)

Full post as published by CL&P Blog on March 17, 2009 (boomark / email).