Have a Dispute with a Credit Card Company? Good Luck Getting a Fair Hearing.

By: Rick D. Massey, J.D.
Copyright © 2009

Everyone has heard that we were all created equal, but some are more equal than others. The law applies to credit card companies the same as to the rest of us. But they have exercised one of the fastest growing special rights that only apply to a privileged few – the right to buy justice. We all know major banks have employed lobbyists to buy legislation permitting them to charge usurious interest rates and to raise them at any time. But few realize this is the tip of a much larger iceberg many debtors will encounter soon.

People who have had their houses burglarized often say they feel as though they have been personally violated. Thanks to a huge brick that has been thrown on the big business side of the scale of justice, we have all been personally violated unless we are a large corporate entity. That brick is called “binding arbitration.” And it almost completely separates you from your constitutional right to a fair and meaningful trial.

Suppose you are the CEO of a major credit card company. When you meet with the mega law firm to discuss how you would like your contracts drafted, you are looking for a number of things. But these four will always be at or near the top of your wish list:

• Reduce your costs of litigation


• Structure your contracts for the highest probability of predictable results


• Ensure the greatest likelihood of favorable results


• Reduce the cycle time (and therefore the costs) of dispute resolution by streamlining the process and reducing the odds of appeal

Of course, you also want to control the entire proceeding as much as possible. As people are now beginning to realize, the banks and credit card companies are not trying to find ways to do you or me any favors.

The reasoning goes something like this: Who knows what a judge or jury is likely to do? But what if we force people into giving up their right to a jury trial? Better still, what if we could force them into giving up their right to the most important rules of evidence they would otherwise have in a court trial? Better still, what if we could buy the judge and force them to accept that verdict as the final decision? As this ABC News story (scroll down to view story) shows, none of these assertions are far-fetched.

The private arbitration contractor, National Arbitration Forum (“NAF”) that is the subject of this story has its own website where it pitches the concept of buying a “neutral” private judge to the corporate world. Included on the website is a publication entitled “From the Bench: Selected Judicial Opinions Supporting Arbitration”. The first opinion cited is a reference to them by Justice Ruth Bader Ginsburg in which she appears to be one of their fans.

[N]ational arbitration organizations have developed similar models for fair cost and fee aliocation ... They include National Arbitration Forum provisions that limit small-claims consumer costs.

What the NAF fails to mention is that this quote was taken from a footnote in a dissenting opinion regarding the issue of whether or not a consumer could be forced to arbitrate even when she cannot afford to do so. The NAF doesn’t mention Justice Ginsburg’s expressed concern that “[t]he arbitration agreement at issue is contained in a form contract drawn by a commercial party and presented to an individual consumer on a take-it-or-leave-it basis”, or that she concluded by saying “As I see it, the Court has reached out prematurely to resolve the matter in the lender's favor.”

Of course, an argument could be made that people aren’t “forced” to agree to these draconian binding arbitration provisions. They could move into a cave and go back to the barter system if they wanted to. But few non-lawyers understand the extent to which they are giving up their basic rights to the American justice system every time they sign one of these agreements.

As Judge Beam noted in his dissent to an opinion that granted punitive damages in an arbitration case (even though such damages were prohibited by State law) the structure of an arbitration proceeding eliminates so many protections otherwise available under the rules of evidence that it lacks almost all of the minimum requirements of due process and fundamental fairness.

In the arbitration setting we have almost none of the protections that fundamental fairness and due process require for the imposition of this form of punishment. Discovery is abbreviated if available at all. The rules of evidence are employed, if at all, in a very relaxed manner. . . Here, as noted by the opinion of the court, the scope of review of the arbitrator's award is narrowly limited if not almost nonexistent. "An arbitration award will not be set aside unless it is completely irrational or evidences a 'manifest disregard for law.'"

Binding arbitration agreements are popular with most large corporations, not just credit card companies. Some are more even-handed than others. But the goal is always to keep the matter out of the courts and into a more predictable if not more biased tribunal. If you are the little guy, you are almost always worse off than you would be if you could have your day in court.

Tell the Lawyers You are Mad as Hell and You’re Not Going to Take it Anymore!

By: Rick D. Massey, J.D.
Copyright © 2009

Law firms large and small are beginning to recognize something their clients have been trying to tell them for years. People and businesses can no longer afford to sign up for legal services at an outlandish hourly rate with no promise of any specific outcome and no limits on the amount of legal fees they will ultimately be billed. Don’t get me wrong. There are some legal services (such as litigation) in which no competent attorney will promise a specific outcome. But the combination of the unknown outcome with the unlimited potential cost is pretty hard for a rational person to accept. There are more client-friendly ways to offer legal services. And the time has come for this to be the rule rather than the exception.

A Bad Economy Has Just Accelerated the Inevitable

With the economy down the drain, the pressure on people and on entire families increases. Even before we began to realize how bad things were in the overall economy, the State of Missouri was experiencing its own crises in the public defender system. People have a constitutional right to a speedy trial and to an attorney even if they cannot afford one. But the public defenders and other attorneys willing to donate their time to represent indigent defendants were already failing to keep up with the demand.

Meanwhile, the Missouri Supreme Court has made it easier for pro se litigants (people not represented by attorneys) to file for a divorce and petition the Court for child support. This decision was and still is highly controversial among family law practitioners. The judges and family law practitioners who sponsored these changes believe this will help people who cannot afford legal representation and would otherwise have no realistic means of accessing the Courts. On the other hand, many lawyers that practice in this area fear that some who could not afford professional legal assistance before will find themselves in the position of needing an experienced attorney more than ever as the result of trying to do something they really don’t know how to do effectively.

There are good arguments on both sides. In some cases, it really is a “simple divorce” in which there are no children, the marriage was for a short duration of time, neither party brought much into the marriage, both are broke now, and there isn’t much in the way of property or finances to take out. But without an attorney, it is less likely that either litigant will recognize, let alone understand the impact of issues that make it something other than a simple divorce. My associates who concentrate their practice on family law are already seeing people who have irreparably hurt themselves by making simple and avoidable mistakes by things as basic as filling in standard forms incorrectly. These simple mistakes will ultimately cost them more than they saved by not retaining an attorney.

So How Should Legal Services be Delivered?

Lawyers will always provide a necessary and important service. But the world continues to evolve and change. The legal profession will have to evolve as well. The education of the average person and her access to technology is greater than ever in history. Whether professionals who have traditionally held a monopoly like it or not: people don’t need them for the same things today that they needed them for in 1909. Many of the medications that once required a prescription are now available over the counter. People are doing their own pregnancy – even their own paternity tests at home with no doctor involved. This doesn’t mean they no longer need doctors. If the home pregnancy test produces a positive result, the importance of prenatal care is just as real as it was before.

Likewise, attorneys will have to face the fact that legal services cannot be offered or priced the same in today’s world as they were when the average remodeling contractor could not download a form for his own collections demand letter over the internet.

Some in the legal community are beginning to recognize this trend. One of the leading voices sounding a wake-up call to law firms, Richard Susskind has published a new book, The End of Lawyers? Rethinking the Nature of Legal Services that discusses the magnitude of these changes.

Individuals realize that the information age allows them to do more for themselves. Business people, regardless of the services or products they offer are finding that their customers want more for less. And they are lying awake at night finding ways to deliver on that expectation. When they need legal services, they will settle for no less.

Lawyers will have to move away from the old full service billable hour model. They will have to do a better job of telling their clients what to expect up front and delivering on that promise. They will have to offer real choices to those clients who are sophisticated enough to do some of the work themselves. The legal process can and should be open, efficient and competitive. There will be those who will hold out to the bitter end in their resistance to changes such as the availability of unbundled legal services and some lawyers’ willingness to review the client’s legal documents instead of drafting everything from scratch. But the world is moving in that direction. There is no turning back.

One Thing You Should Do This Year – And it Won’t Cost you a Cent!

By: Rick D. Massey, J.D.
Copyright © 2009

Who will make your most important medical decisions? You have the right to determine whether you receive (or are subjected to) medical treatment. But when you can't speak for yourself, you can only control what happens if you take the necessary precautions before it’s too late.

Under Missouri law, you can execute an advance healthcare directive (also known as a living will) that will determine in advance:

• Your decisions regarding important medical decisions


• The ability of healthcare providers to follow your direction without fear of increased risk or liability

Without an advance healthcare directive, your wishes may not be followed. As we have seen in Missouri cases such as that of Nancy Cruzan and in the later Florida case of Terri Schiavo, not preparing in advance can lead to devastating results for you and your loved ones. Your family or significant others may find themselves in a bitter dispute over what happens to you. This is even more likely if you have a domestic partner to whom you are not legally married according to the rules of the powers that be.

When combined with a Durable Power of Attorney, an advance healthcare directive can maximize the chances that your wishes based on your feelings, convictions and beliefs will be followed. Missouri law allows you to make all choices regarding medical care or the withdrawal of medical care. But you have to leave clear and specific details of where you want those boundaries to be.

The Forms Are Available Free

You can get both forms from the Missouri Bar website. If you also prepare a Durable Power of Attorney to designate someone to speak for you, you will want to make sure that you include a HIPAA (Health Insurance Portability and Accountability Act) release to allow the designated individual to have access to your medical records and to permit your doctors to discuss your medical issues with the designated person. The Durable Power of Attorney is not necessary. But it allows someone you trust to make decisions about things you may not have thought about and specifically covered in your advance healthcare directive. You can also determine whether or not you want to delegate the power to override something you said in the advance healthcare directive based on changing circumstances.

Another document that contains some very useful information as well as planning forms and questionnaires for preparing your advance healthcare directives may be downloaded free at the American Bar Association’s Commission on Law and Aging website.

Preparing these documents in advance and discussing them with your family and healthcare providers is the best way to ensure that your wishes are likely to be followed. You should also know that under Missouri law you can verbally modify or rescind your healthcare directives at any time as long as you are conscious. So if they are wheeling you into surgery and you have second thoughts, don’t be afraid to speak up. Don’t leave your loved ones guessing about what you would want when you cannot speak for yourself.