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By Ed Perkins
As travel suppliers increasingly stonewall legitimate complaints and ignore requests for compensation, you have to consider the legal system for redress. Unfortunately, the fine print in many travel contracts -- airline, cruise, tour, and such -- contains traps that make it almost impossible for you to claim your legal rights in the event of a serious problem. The trap is either a "choice of forum" provision or a provision mandating arbitration of disputes. And either can erect significant barriers to your ability to collect legitimate claims for refunds or damages.
The "choice of forum" trap is deceptively simple: It states that any dispute arising from a contract dispute can be adjudicated in only one specific state or country. That means no matter where you live, the only place where you can bring suit is in the specified venue. If you're lucky, that venue is somewhere in the United States, but with a foreign-based supplier it could be almost anywhere in the world. And the net result is a significant barrier to your ability to take action:
-- A forum specified in another state means you would have to locate an attorney and file a claim in that state, and be present in that state for a hearing, a trial, or other procedures.
-- A forum specified in another country means you'd have to travel to that country. Even worse, the supplier is likely to choose a country with very weak or nonexistent consumer protection laws or an easily bribed judiciary.
Either case could, of course, impose a major financial and time burden on you. And an opposing attorney could effectively stretch your time and money commitment by asking for repeated delays, hearings, and such. The net result: Justice denied, regardless of the strength of your claim.
As far as I can tell from the available literature, U.S. courts have upheld choice of forum provisions more often than they've denied them, at least regarding forums in the United States. To overcome an adverse ruling, you must apparently prove that either the supplier's choice of forum deprived you of the opportunity for a trial "by a court of competent jurisdiction," enforcement would be unreasonable or unjust, or the clause was invalid due to fraud or overreaching. Presumably, any domestic court would be a "competent jurisdiction," but you might do a bit better fighting a foreign court. Some courts have nullified forum clauses because of insufficient notification, but providing you with the fine print is generally considered "sufficient" no matter how arcane the language or how fine the print.
The obvious iniquity of forum clauses prompted the
Mandatory arbitration is a similar trap. In such a contract, in the event of a disagreement or possible damages, you agree to forego legal recourse and instead abide by the decision of a professional "impartial" arbitrator. The excuse for such clauses is to avoid the costs of litigation. Although that provision seems reasonable, however, the hidden trap is that, according to most reports I can find, supposedly impartial arbitrators are much more likely to side with a supplier than a consumer, and even when they side with a consumer, they're inclined to be pretty stingy with damage awards. The net result, again, is justice denied.
I haven't seen any arbitration clauses in airline contracts, but some lines may have them. The DOT proposal doesn't cover them. But you find them in lots of other places -- specifically in credit card contracts.
© U.S. Ed Perkins, On Travel
Travel | Beware Hidden Traps in Your Travel Contract