Consumer arbitration clauses

I am very pleased to join Indisputably as a guest blogger for the next few weeks.  I have been writing about the fairness of arbitration, primarily securities arbitration, for the past few years.  At Pace Law School, I have been teaching a Mediation & Arbitration survey course for the past few years.  When I cover the topic of the fairness of “mandatory” arbitration, I ask my students each year to look through their paperwork to find a consumer agreement with a pre-dispute arbitration clause.  Every year, the students easily find one and usually are shocked to discover the “unfair” aspects of those clauses.  Certainly that discovery leads to rich class discussion.  This year, for the first time, students who located “unfair” provisions (e.g., inconvenient hearing location; limitations on discovery; non-mutual obligations) were in the distinct minority.  Most PDAAs seemed fair to my students, as they did not run afoul of Consumer Due Process Protocols.  Does this signal an attempt by certain consumer services companies to deflect attention away from consumer arbitration?  Perhaps these companies are striking preemptively against the passage of the Arbitration Fairness Act?  Or are they responding to the increasing willingness of certain courts to declare these PDAAs unenforceable on various state law grounds?  I’d love to hear whether anyone out there has noticed the same trend.

Jill Gross

5 thoughts on “Consumer arbitration clauses”

  1. I am from Mumbai. With respect to consumer agreements I feel many a times the clauses are unfair, but are not disputed partly becasue of the unequal bargaining power and partly because in most of the cases it is standard form of agreements. Would like to know your views on the same

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