Amtrak policy highlights nasty travel provisions
Say you’ve been hurt in a serious train accident and you want to sue Amtrak for damages. You go to a lawyer and they tell you, “Sorry, I can’t take the case. You signed away your rights to sue when you bought your ticket.” Welcome to the world of adhesion contracts: Contracts that include terms that are unfavorable to you but over which you had no chance to bargain. Amtrak’s policy went into effect in January, but earlier this month it finally came to the attention of public officials, some of whom don’t like it. But it’s hardly anything new: All sorts of companies have been using contracts of adhesion for years. Although details differ, in travel, the two worst provisions are mandatory arbitration of disputes and forum clauses.
Basically, Amtrak’s standard contract requires that you give away what would normally be a legal right if you want to ride the train. Instead of being able to sue on your own or join others in a class action, your only recourse is to bring your dispute to mandatory arbitration. Here’s the language, edited only for length: “This Arbitration Agreement ... applies to all claims, disputes, or controversies, past, present, or future, that otherwise would be resolved in a court of law or before a forum other than arbitration. Amtrak and Customer ... (collectively “You” or “Your”), AGREE that this Arbitration Agreement applies, without limitation, to claims ... You may have against Amtrak and any affiliates or related entities ... based upon or related to: these Terms and Conditions, breach of contract, tort claims, common law claims, Your relationship with Amtrak, tickets, services and accommodations provided by Amtrak, carriage on Amtrak trains and equipment, any personal injuries, and any claims for discrimination and failure to accommodate, shall be decided by a single arbitrator through binding arbitration and not by a judge or jury. ... The parties agree to bring any claim or dispute in arbitration on an individual basis only, and not as a class or representative action, and there will be no right or authority for any claim or dispute to be brought, heard or arbitrated as a class or representative action.” Wow.
Why arbitration? Simple: Corporate lawyers know that arbitrators are a lot stingier with monetary damages than juries are.
A forum clause states that if you want to bring legal action, you must bring it in a specified court. Specifically, that means you can’t sue in your own state; you need to schlep to some other state. Cruise lines typically set Florida as the forum, which could be a nuisance if you live in Arizona, but one you could overcome if the amount of money involved justifies the travel. But some travel suppliers give a foreign court as the specified forum, and that could be a disaster. Not only are you required to travel to some distant country and arrange for lawyers there, but personal injury laws in many countries are extremely limiting.
Why forum clauses? Basically, to make it harder for consumers to obtain compensation for damages.
You encounter arbitration clauses with all sorts of purchases, not just travel. They’re rife with banks and mobile phone providers, for example. Arbitration and forum clause requirements are usually specified somewhere in the “terms and conditions” portion of the official contract. No matter how boring, you need to read that fine print. Where possible, try to avoid doing business with a company that requires arbitration or sets a difficult forum.
The revived attention to the Amtrak case is refocusing some attention on the ongoing problem or adhesion contracts. You can look for and — I hope — support new legislation. Meanwhile, remain informed.