Cyrus Dugger

CL&P Blog: Choosing Between Judicial and Arbitral Fora in Class Actions

Here’s one of the best critiques of mandatory arbitration that I have yet to read, from the Consumer Law & Policy Blog:

Choosing Between Judicial and Arbitral Fora in Class Actions by Mike Quirk

This is a response to Roger Mandel’s post from earlier this week, “Arbitration: Should it Sought Rather Than Fought?”, and is the third in a series of posts on arbitration and class actions.

Roger has provided an important and provocative analysis that we practitioners who represent consumers must give serious consideration. In light of the data Roger has gathered and analyzed, consumer class action lawyers must give serious consideration to the pros and cons of the judicial and arbitral fora before proceeding with particular cases.

What follows is meant as a critique not of Roger’s analysis, but of the actual arbitral system he describes. This arbitral system for deciding when cases may or may not proceed as class actions raises serious questions of sensibility, legitimacy, and ultimately sustainability.

1. Sensibility
The first step in this process is a “clause construction phase,” where the arbitrator decides if a clause allows for class arbitration. But, as described, the case only gets to the arbitrator for this determination if the ARBITRATION SERVICE has already determined that the clause is silent concerning class actions (which it is not in the vast majority of cases where companies now expressly ban class claims). Putting aside the appropriateness of the service making this pre-threshold determination, what is an arbitrator to do in “interpreting” a provision already found to be silent on the subject at issue?

More fundamentally, what is the sense of looking to a contract to determine what procedures will govern a dispute? Can any of us imagine a court or other competent decision-maker deciding class certification, discovery rights, or rights to present testimony by looking to a private contract rather than neutral and generally applicable rules? It is an indisputable fact that consumer arbitration clauses are written by businesses. Having already allowed the business party to pick the forum, why would we let the party to a dispute write the rules by which the dispute is going to be resolved? (keep reading)

Posted at 11:40 AM, Dec 08, 2006 in Permalink | Comments (0) | TrackBack (0)