David vs. Goliath: A Few Survival Tips for David
- Sign a contract with a binding arbitration provision
- Take the big guy to Small Claims Court
- Forget that the big guy wrote the rules – And he didn’t write them for you
Binding Arbitration is NOT Your Friend
Binding arbitration, like Small Claims Court, is okay when the two sides are about the same size. But there is a reason why every huge corporation includes it in its consumer contracts and employment agreements. Whenever you hear that arbitration is less expensive than litigation, that depends on whose shoes you are wearing at the time. If you are an individual or a small business owner and have a dispute with a large corporation, the odds are agianst you in any forum. But there is more certainty in arbitration. If you have agreed to binding arbitration you will almost certainly lose. Every time you sign one, you give away important legal rights, most of which would have helped level the playing field.
Don’t Try Taking Big Business to Small Claims Court
If you have a disagreement over your neighbor’s dog eating your magnolias, and he will not make it right with you, small claims court may be the way to go. On the upside, it is relatively fast, less expensive, and you can go argue your own case without a lawyer. Small disputes between people of equal power can be settled that way. But if you have a conflict with someone much bigger and richer than you, this is not a “Judge Judy” issue.
Small Claims Court is designed to move cases quickly and efficiently. That speed and efficiency comes at a cost. The rules of evidence are almost non-existent. Therefore, the judge will hear (and may consider) gossip (hearsay in legal jargon) as evidence against you. If you are the defendant, you will not get the chance to force the Plaintiff to produce evidence that may help your case. If you are the Plaintiff you will carry the burden of proof (meaning if you cannot prove your case, you lose). But you will not have the leverage to force the defendant to reveal critical proof that may not be available any other way.
Goliath is all set up to fight little shepherd companies and is usually very good at it. If you meet him on the battlefield of Small Claims Court, he will probably take your slingshot
and. . . well, you know. So don’t even think about it.
As a Small Business – You Don’t Have Lobbyists
Law makers draft legislation to help their constituents. In other words, they write laws to scratch the backs or backends that elected them. This is why corporations (fictitious entities created and living only on paper) have all of the rights of “persons” under the Constitution – without the ugly ramifications of personal responsibility that governs us mere mortals. Fortunatley for us, the Goliaths cannot seem to get along with one another. Because the big guys need well-defined rules of engagement to settle their disputes, small businesses still have a shot at justice in the Courts. But we need to understand that it is their game. To have a shot at justice, we must know the rules and find ways to use them to our advantage.
Rick D. Massey, JD, Copyright © 2010