The Unfairness of Arbitration?

ADR Prof Blog by Andrea Schneider, Michael Moffitt, Sarah Cole,Art Hinshaw, Jill Gross and Cynthia Alkon.

In the New York Times, Stanford Law Prof. Amalia Kessler has an interesting op-ed about consumer arbitration. The interesting thing about this piece is not its arguments against consumer arbitration but its historical take on arbitration that looks back past the FAA. That said, it hints at an argument I’ve heard many times about the high percentage of arbitration cases that are decided in favor of the company.

. . . some studies have found that they are systematically biased in favor of the companies that hire them . . .

I’m always interested in these studies, but must admit that I’m not as familiar with them as I’d like. My recollection is that they say something along the lines of “corporations win all the time, therefore these arbitrations are unfair.”

My problem with this critique is that it presumes that the corporations should not have won those cases. I’m skeptical because my clinic students mediate lots of debt collection cases, and in 90+% of those cases the defendant/debtor/individual admits to owing the debt. This makes me question the usefulness of the statistics describing the number of cases that are decided for the company.

So here’s my question: does anyone know of any studies which includes an analysis of the underlying cases as compared to the outcome of the arbitrations?

                       

Art Hinshaw

Art Hinshaw’s research and teaching interests lie in the field of alternative dispute resolution (ADR), primarily mediation and negotiation. His research bridges ADR theory and practice, and his teaching responsibilities include the Lodestar Mediation Clinic and Negotiation among other ADR courses. Professor Hinshaw is active in the ADR community having… MORE >