NADC Board Challenges Opposition to Dealer Arbitration Clauses
HANOVER, Md. — The National Association of Dealer Counsel Board of Directors reported that it has submitted written comments to the House Judiciary Committee to express opposition to the Automobile Arbitration Fairness Act of 2008 (H.R. 5312).
The March 17 letter signed by NADC president Michael Charapp challenged the assumption underlying the legislation that dealers routinely use pre-dispute arbitration clauses because arbitration favors dealers.
In fact, NADC's members, who are primarily attorneys for dealers, have widely divergent opinions on the benefits of arbitration, according to the association.
While some NADC members believe that arbitration's streamlined processes are beneficial, other NADC members believe that arbitration is more expensive than litigation and yields decisions that are not as solidly grounded in legal precedent, the group pointed out.
In the letter, NADC said, "Parties to an agreement that is not an adhesion contract like a motor vehicle franchiser sales and service agreement should have the right to determine the method of resolving disputes."
The board indicated that it decided to go on record with the letter to support the needs of its members' clients, dealerships.
The letter went on to note that active judicial review of arbitration provisions has led those dealers who chose to include pre-dispute arbitration terms in their agreements to use language that tends to be scrupulously fair to both dealers and consumers.
The NADC is a trade association, including nearly 500 attorneys and association executives who represent the interests of dealers throughout the United States.
Basically, the NADC said it provides a support network for attorneys whose dealer clients face a business environment that includes increasing regulation and litigation.
Through newsletters, Web-based communications and educational meetings, members are able to share information and strategies that help provide the best possible service to their dealer clients, according to the association.
For more information, visit www.dealercounsel.com.