arbitration process
Oregon Resident “Devastated” by Arbitration: Woman Claims Unfair Process
August 15, 2014  //  By:   //  Investigative Reports, Ripoffs & Scams  //  No Comment

(Story by Carol Thompson) Before purchasing a new home, an Oregon woman hired a building inspector to check the house from top to bottom but when she moved in she had nothing but headaches, literally.

“I felt sick. I had headaches, burning eyes and allergy symptoms,” the woman, who asked not to be identified, said.

The building inspector’s report gave no indication that anything was wrong with the house, in fact, the woman shared the report with VNN and everything had passed.

When the ill feelings didn’t subside and her doctor suggested allergies were the cause, the woman contacted a contractor to check over the house. He spotted the problem almost immediately.

“There was mold on the ceiling in the master bedroom, but it was covered with paint so I hadn’t noticed it. The contractor told me he is trained to look for signs of mold and that it’s not unusual for it to go unnoticed if you don’t know what to look for,” she said. “I would think the building inspector would have been trained for the same thing.”

What began as a small project quickly became a large one as walls needed to be taken down and replaced. The trail of mold didn’t end with the master bedroom.

With more than $10,000 invested in repairs, the woman decided to sue the building inspector, but because of the contract she had signed, she had to take her complaint to arbitration.

“It was the worst experience I’ve ever had. I felt invisible,” she said. “The arbitrator didn’t even look at my doctor’s report.”

The woman alleged that she was barely allowed to tell her story. “It was pretty much ‘you looked at the home before you bought it, therefore, you had to use due diligence as did your realtor.’”

Confidentiality Concerns

The woman did not want the name of the arbitration organization published, however, she did share it with VNN.

“There’s a confidentiality clause and I don’t know yet if I’m going to appeal the decision and I don’t want to have a problem for disclosing too much,” she said. “It’s really written in stone about the confidentiality and it’s kind of scary to think I could blow my case from talking.”

She added, “At least when you file a court case it’s public. This isn’t public. I don’t get it. It’s like this big secret.”

Many arbitration agreements contain a confidentiality clause. According to the American Arbitration Association’s website, “An arbitration proceeding is a private process. In addition, AAA staff and AAA neutrals have an ethical obligation to keep information confidential. However, the AAA takes no position on whether parties should or should not agree to keep the proceeding and award confidential between themselves. The parties always have a right to disclose details of the proceeding, unless they have a separate confidentiality agreement. Where public agencies are involved in disputes, these public agencies routinely make the award public.”

Public agencies generally can’t keep arbitration findings private because the proceedings are most often paid for by the agency, hence, the taxpayers, but private arbitrations can commit the parties to strict confidentiality.

A cheaper alternative to court?

Arbitration, which is supposed to be a cheaper alternative to court, resulted in fees the woman wasn’t prepared for.

“I lost my case and I was ordered to pay the attorney fees of the building inspector. I had no idea that would happen.”

The woman said when she and her lawyer walked out of the arbitration proceeding, her lawyer looked at her and said, “What the hell just happened in there?”

The proceeding, she said, was over in about 30 minutes. “It took me longer to drive there,” she said.

Although she wasn’t comfortable disclosing the total cost of the arbitration, she did say, “It was more than I could afford.”


About the Author :

Carol Thompson is a veteran investigative reporter residing in central New York. She spent 23 years with a local newspaper, The Valley News, before leaving for the Syracuse New Times, and now, VNN. Thompson has won dozens of first-place awards for investigative reporting and was the 2006 recipient of the Syracuse Press Club’s prestigious Selwyn Kershaw Professional Standards Award. Thompson’s reporting has resulted in the arrest of public officials and has prompted policy changes. She uncovered two money laundering schemes that traveled the globe and resulted in the indictments of several developers.