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Thursday, March 20, 2014

Consumer Arbitration by Bruce Wardhaugh

Thoughtful new article, Unveiling Fairness for the Consumer: The Law, Economics and Justice of Expanded Arbitration, by Dr. Bruce Wardhaugh of Queen's University, Belfast.  I appreciate the extent to which he addresses my own articles, particularly Paying the Price of Process: Judicial Regulation of Consumer Arbitration Agreements

Bruce Wardhaugh writes "some argue that pre-dispute agreements in consumer (and employment) matters are consumer welfare enhancing: they decrease the costs of doing business, which is then passed on to the consumer. This Article examines these latter claims from both an economic and normative perspective. The economic analysis of these arguments shows that their assumptions do not hold. Rather than being productive of consumer surplus, the use of arbitration is likely to have the opposite effect. The industries from which the recent Supreme Court cases originated not only do not exhibit the industrial structure assumed by the proponents of expanded arbitration, but are also industries which exhibit features that facilitate consumer welfare reducing collusion."


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