Article On Predispute Arbitration Agreements

Mary F. Radford (Professor of Law, Georgia State University School of Law) recently published an article entitled, Predispute Arbitration Agreements Between Trustees and Financial Service: Are Beneficiaries Bound?, 40 ACTEC J. 273 (2014). Provided below is an excerpt from the article:

Part I of this article contains a brief description of arbitration, a discussion of the use of arbitration in securities lawsuits (that is, suits against brokerage firms and investment advisers), and an examination of the authority of trustees to enter into predispute arbitration agreements with financial service institutes. Following this general discussion, Part II describes the few cases in which court have determined whether trust beneficiaries are bound by a predispute arbitration agreement signed by the trustee. Part III examines the theories used by the courts in these cases. Part IV describes the flaws in the cases in which the courts have refused to enforce predispute arbitration provisions against trust beneficiaries and concludes that in most states trust beneficiaries will be forced to arbitrate. Part IV then explores the contours, advantages and disadvantages of the type of arbitration in which these trust beneficiaries will engage. The Conclusion examines possible solution to the problems encountered when trust beneficiaries are forced to engage in securities arbitration.