Arbitration Clauses in Publishing Agreements

Arbitration (not to be confused with mediation) is an alternative method of dispute resolution.  In general, two disputing parties present their individual sides of an argument or complaint to a supposedly neutral arbitrator or panel of arbitrators, who weigh the facts and arguments of both parties and decide the dispute.  The parties give up their right to have a court decide the dispute.

Arbitration clauses are used by traditional publishers as well as self- and subsidy- publishers.  Although arbitration may be either voluntary or mandatory, the typical arbitration clause in an publishing agreement is mandatory.

Arbitration can be useful in some cases, but I do not recommend it for authors.  Here’s why:

  • Arbitration is expensive. Claimants often must pay substantial arbitration fees and unless your case is minor, you still will need an attorney.
  • Arbitration does not follow clear, well-established, consistent rules and procedures such as those required in the courts. For example, “discovery” (procedures that enable one side in a dispute to request information from the other) is limited. Traditional rules of evidence may not apply, and you or your attorney may have more difficulty getting information needed to support your claim than you would in court.
  • Arbitrators often ignore legal precedent into account in making their decisions. This means outcomes are less dependable, and you may be taking a bigger risk in bringing a claim.
  • Decisions typically cannot be appealed.
  • Most arbitrators are pro-business. The publisher often chooses the arbitration company or service in the arbitration clause. Any arbitrator who decides in your favor against the publisher will be unlikely to be designated to decide any cases involving that company in the future.  Studies of typical consumer disputes that are arbitrated by such outfits as the National Arbitration Forum show businesses win over 90% of the time, and that a small number of arbitrators handle 9 out of 10 cases.

Interestingly, many companies refuse to use binding mandatory arbitration in inter-business disputes, reserving these clauses for the consumer.  In the past, car dealers were so afraid of mandatory arbitration that they spent millions lobbying Congress to enact a law prohibiting automobile manufacturers from requiring binding mandatory arbitration in disputes related to dealership franchises.

In summary, mandatory arbitration clauses generally favor the publisher.  Often an author’s only real clout is the threat of a lawsuit.  Here’s an alternative to the publisher’s arbitration clause, one that preserves your right to go to court:

In the event of any dispute or disagreement regarding this agreement, the parties agree that common-sense should prevail, and that if necessary an independent person or persons mutually agreed upon by both parties shall be called upon to make a decision which is binding upon both parties.  If the parties cannot agree on an arbitrator within thirty days of a written arbitration request by either party, the parties may pursue remedies in law or equity in any court of competent jurisdiction. © 2017 Daniel Steven