Trial Lawyers vs. Chamber of Commerce: Battle over Arbitration

Enforcement of arbitration clauses, especially in the context of form contracts presented by businesses to consumers and employees, has long been a battle between trial lawyers and business.  

Here is a big recent document by the trial lawyers' American Association for Justice.    Here is the US Chamber of Commerce's side of the story, from its Institute for Legal Reform.

I tend to agree with the Chamber as evident in this congressional testimony (video), law review article and policy analysis for the Cato Institute.

Congressional Hearing on Arbitration

Yesterday, the Senate Judiciary Committee held a hearing entitled "The Federal Arbitration Act and Access to Justice: Will Recent Supreme Court Decisions Undermine the Rights of Consumers, Workers, and Small Businesses?"   Video of the hearing is here.   Senator Al Franken begins the hearing with a strongly negative view toward arbitration clauses in consumer and employment contracts of adhesion.  While I disagree with much of it, he is a very intelligent person, which showed in his comedy career and shows in the senate.

The witnesses at this hearing include several very impressive and capable people:

Leslie Overton

Deputy Assistant Attorney General for Civil Enforcement, Antitrust Division
U.S. Department of Justice

Alan Carlson

Owner
Italian Colors Restaurant
Oakland, CA

Myriam Gilles

Professor of Law
Benjamin N. Cardozo School of Law

Vildan Teske

Partner
Crowder, Teske, Katz, & Micko, PLLP
Minneapolis, MN

Archis A. Parasharami

Partner & Co-Chair, Consumer Litigation & Class Actions practice
Mayer Brown LLP
Washington, DC

Peter Bowman Rutledge

Associate Dean for Faculty Development
Herman E. Talmadge Chair of Law
University of Georgia School of Law

UNLV Law Prof. Jean Sternlight's written testimony is here.

When Parties Agree, Should the Arbitrator Do What the Parties Want?

Parties whose dispute is in arbitration often disagree on the process the arbitrator should follow to resolve the dispute.  But suppose the parties agree.  Does the arbitrator have to use the process the parties want? 

This important topic is highlighted by Barbara Reeves Neal a JAMS Arbitrator.  She rightly points that two or more of these principles can come into conflict:

1. Arbitration is a delegated and defined power to make certain types of decisions in certain prescribed ways.
2. The arbitrator’s powers derive from parties’ contract; the arbitrator is not entitled to do anything unauthorized by parties.
3. The arbitrator has an obligation to the process of arbitration itself and must preserve the integrity and fairness of the process, while advancing the fair and efficient resolution of matters submitted for decision.
4. It is the duty of the arbitrator to ensure a timely resolution and that the counsel and the parties understand the time and cost implications of potential time delays or adjournment they seek.
5. The arbitrator should set meaningful limitations in order to preserve the efficiency and integrity of the arbitration process.

In fact, it is likely that the first two principles (party autonomy) will occasionally conflict with the last three principles which relate to the arbitrator's desire to have a good arbitration process ("integrity" "fairness" "timely" "efficiency").

If the parties agree that they want an arbitration with more discovery than the arbitrator thinks wise, or more continuances than the arbitrator thinks wise, should the arbitrator grant the parties' joint requests?  Generally, yes, in my view.   Arbitrator Barbara Reeves Neal's views are here.

Domain-Name Arbitration in the Arbitration-Law Context: Consent to, and Fairness in, the UDRP

Domain-Name Arbitration in the Arbitration-Law Context: Consent to, and Fairness in, the UDRP

This Article begins by introducing the domain-name arbitration system. This Article provides what may be the first sustained analysis of consent issues in domain-name arbitration. It also assesses the fairness of domain-name arbitration.