“Loser Pays” Provisions May Not Be Ironclad

When a dispute arises with a company, you probably take comfort in the fact that if things cannot be straightened out personally or over the phone, you can settle the matter in court, if necessary. However, the sad reality is that large companies like banks, credit card companies, and other financial institutions, among numerous others, have made this option increasingly difficult through forced arbitration clauses and “loser pays” provisions that are inserted into virtually every service contract you sign.

These terms are written into the fine print and not only obligate someone with a grievance to resolve issues through an independent party, rather than court, but also and sometimes most importantly the contracts can stipulate that the losing side must pay the winning side’s legal fees and costs.

It is important to remember that you have rights as a consumer. If you believe that you have been the victim of a company’s malfeasance, contact Ohio consumer lawyer Jeremiah Heck with Luftman, Heck & Associates at (888) 726-3181 for a free and confidential consultation to discuss your situation.

What’s Wrong with This Process?

While arbitration and paying the prevailing party’s legal costs may at first glance seem like a reasonable concept to decrease frivolous claims of wrongdoing and make things more efficient, the advantage is typically one-sided, in favor of large corporations. For example, you can conceivably feel wronged by a company and after going through the process the organization themselves laid out, if the matter does not end in your favor, you could owe the company and their attorneys a considerable amount of money for the privilege of airing your issue, which may be totally justified.

These situations can be incredibly complex and may deter consumers with legitimate grievances to forego seeking a remedy or fair compensation due to their fear of being held liable. After all, consumers who feel wronged probably don’t have the same resources as large organizations, who can more easily take this risk.

How a Consumer Law Attorney Can Help

If you believe a company has wronged you in some way, going up against them can be daunting even without an arbitration agreement or a provision in your contract about paying the other side’s legal fees. That’s why it is critical to discuss all your options with an experienced and highly skilled consumer law attorney. Even in an arbitration hearing, you have the right to consult with a lawyer and a qualified legal professional can look out for your interests, especially since these “loser pays” provisions may not be as set in stone as you or the company may think.

For instance, a man in Ohio recently brought an action against a financial services company because he thought they made several violations and committed fraud involving their sales contract as well as their arbitration agreement. Essentially, he felt overcharged and unsatisfied with their service. He also believed the arbitration agreement was not properly explained and ultimately unfair, considering the expense and travel required for his participation.

The court ultimately found that the company was not at fault for many of the issues the man raised and he found himself responsible for the company’s extensive legal fees. Upon appeal, Ohio consumer law attorney Jeremy Heck of LHA represented the man and argued that the “loser pays” portion of the agreement should not be enforced. Attorney Heck illustrated that the provision to pay the prevailing party’s fees and costs applies to situations when the losing claim is found to be groundless, made in bad faith, or knowingly violates the arbitration agreement. Otherwise, any unsuccessful claim would be penalized and is inherently unjust since his client’s case did not meet any of these criteria.

In the end, the Court of Appeals of Ohio, Second Appellate District, Montgomery County agreed with this assertion and reversed the “loser pays” provision because having the man pay the legal fees was against public policy or the common good. This spared his client from the substantial expense of paying for the other party’s legal fees, which may not have been possible if the man simply accepted the court’s decision.

Speak with an Experienced Consumer Law Attorney

Don’t be intimidated by arbitration or the prospect of needing to pay for the other side’s legal costs. While these are important factors to consider, if you feel like a company or organization has harmed you in some way, it is equally important to hold them responsible and pursue justice as well as fair recovery. A knowledgeable and capable Ohio consumer lawyer will be able to explain your specific arbitration agreement and any avenues that may be available.

Contact attorney Jeremey Heck at Luftman, Heck & Associates at (888) 726-3181 today for a free, initial consultation.