How Arbitration Agreements Impact Your Ability to Sue in Illinois

Arbitration agreements have become increasingly common in many types of contracts, including those that may involve personal injury claims. Whether you’re signing a waiver for a gym membership, using a rideshare service, or agreeing to the terms of an online service, you might find yourself agreeing to resolve disputes through arbitration rather than taking legal action in court. For Illinois residents involved in personal injury cases, it’s crucial to understand how arbitration agreements can impact your ability to sue and seek compensation.

What Is an Arbitration Agreement?

Arbitration is a method of alternative dispute resolution (ADR) where disputes are settled outside of the courtroom by an arbitrator, who acts as a neutral third party. Arbitration agreements typically stipulate that any legal dispute between the parties will be resolved through arbitration, and both sides waive their right to sue in court. These agreements are often embedded in contracts you may sign without fully realizing it.

Binding vs. Non-Binding Arbitration

There are two types of arbitration: binding and non-binding. In binding arbitration, the decision of the arbitrator is final and enforceable in court, with limited grounds for appeal. This means that once an arbitrator rules on your case, you generally cannot take the dispute to court afterward, even if you are dissatisfied with the outcome. In non-binding arbitration, either party can reject the arbitrator’s decision and proceed to litigation. However, most arbitration agreements favor binding arbitration.

Common Places You May Encounter Arbitration Agreements

Arbitration agreements can be found in various types of contracts. For instance:

• Rideshare services (Uber, Lyft): When using rideshare services, you agree to terms that often include arbitration clauses, meaning any claims related to accidents or injuries must be resolved outside of court. However, in some cases, rideshare accidents resulting in injuries, may be litigated in court.
• Employment contracts: Many employers include arbitration agreements in employment contracts to prevent employees from filing lawsuits over workplace injuries or disputes.
• Medical services: Some healthcare providers may include arbitration agreements in the documents you sign when receiving treatment, potentially limiting your ability to sue for medical malpractice.
• Gyms and recreational facilities: Waivers for gyms or other fitness centers may include arbitration clauses that prevent you from filing a lawsuit in case of injury.

How Arbitration Affects Your Ability to Sue for Personal Injury

Arbitration agreements can significantly limit your legal options. Here’s how they impact your ability to pursue a personal injury lawsuit:

1. Waiving the Right to a Jury Trial: By agreeing to arbitration, you give up your right to have a judge or jury decide your case. This can be a substantial disadvantage, especially if you feel more confident in presenting your case before a judge and jury than an arbitrator.
2. Limited Discovery: Arbitration often limits the discovery process, which is the period during which both sides gather evidence. In a typical personal injury lawsuit, discovery is critical for building a strong case, as it allows for depositions, document requests, and other forms of evidence gathering. In arbitration, these opportunities may be significantly curtailed, limiting your ability to fully present your case.
3. Potential Bias of Arbitrators: Arbitrators are often selected by or from a pool provided by the entity that drafted the arbitration agreement. This can raise concerns about neutrality and fairness. In some cases, the arbitrator may have a bias toward the company or institution that required the arbitration agreement, which can impact the fairness of the proceedings.
4. Costs and Fees: While arbitration is often touted as a more cost-effective alternative to litigation, this isn’t always true in personal injury cases. Arbitration can come with significant fees, including paying for the arbitrator’s time. In court, by contrast, you may not face these upfront costs, and attorney fees are often contingent upon a successful outcome.
5. Limits on Damages: Arbitration agreements sometimes include provisions that limit the amount of damages an injured party can recover. For example, you may be limited to receiving compensation only for certain types of losses, such as medical expenses, but not for pain and suffering or punitive damages.
6. Difficulty of Appeal: In binding arbitration, the arbitrator’s decision is final, and there are very limited grounds for appealing the ruling. Even if you believe the arbitrator made a mistake or was biased, it’s unlikely that a court will overturn the decision. This contrasts with a court case, where you have the right to appeal an unfavorable judgment.

Recent Example of an Arbitration Clause

A recent article by the BBC highlights how arbitration clauses can affect personal injury cases. The article discusses a couple that suffered severe injuries after the Uber they were riding in crashed. The couple attempted to sue Uber in court for compensation for their injuries. Uber argued to the court that the couple had signed an arbitration agreement when they signed up for Uber Eats, and because they signed an arbitration agreement, they could not sue Uber in court. The court agreed with Uber and dismissed the case.

Exceptions to Arbitration Agreements in Illinois

Not all arbitration agreements are enforceable in Illinois, particularly in cases where the agreement is deemed “unconscionable.” For example, if the arbitration clause was hidden in fine print or written in overly complicated legal language that the average person couldn’t reasonably understand, a court may refuse to enforce it. Courts may also invalidate arbitration agreements if they find that the terms are grossly unfair to one party.

In addition, Illinois law provides certain protections in specific areas. For instance, under the Illinois Nursing Home Care Act, arbitration agreements cannot waive the right to a jury trial in cases involving nursing home negligence. Furthermore, arbitration agreements must be entered into voluntarily, and courts may examine whether the injured party truly had a choice in signing the agreement.

What Should You Do If You’ve Signed an Arbitration Agreement?

If you’ve signed an arbitration agreement and are now facing a personal injury dispute, don’t assume that all is lost. An experienced personal injury attorney can review the terms of the agreement and advise you on your options. In some cases, the arbitration agreement may not be enforceable, or there may be strategic ways to approach arbitration that maximize your chances of a favorable outcome.

Conclusion

Arbitration agreements can significantly affect your ability to sue in personal injury cases, often limiting your options for recovery. Before signing any contract, especially in situations where you could be injured, it’s essential to understand what rights you may be waiving. If you’ve been injured and are subject to an arbitration agreement, contact our experienced Illinois personal injury attorneys to explore your options and ensure that your rights are protected.