I just read an interesting keynote speech by Suja Thomas, a law professor at the University of Illinois. In the speech (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1960032), Professor Thomas discusses access to courts and juries before and after the summary judgment trilogy. Professor Thomas also discusses the impact of the Supreme Court’s recent arbitration jurisprudence, specifcally, the Concepcion decision. She recognizes that, as with the increased use of summary judgment, the Supreme Court’s favorable attitude toward arbitration, culminating in Concepcion, has the effect of discouraging litigants from getting their disputes resolved (because it is too expensive). In addition, Professor Thomas focuses on the phenomenon that, due to arbitration and other devices, laypeople (i.e. juries) are deciding fewer and fewer cases. Ultimately, Professor Thomas recommends a return to a time when devices like summary judgment (and arbitration — at least between repeat and one-shot players) should not be utilized. While this is a somewhat radical solution to the problems Professor Thomas describes, there is no question that something must be done to enable individuals with small claims to vindicate their rights (and that small claims court is not necessarily the answer).
I’ve never had warm feelings about arbitration and now, after reading Ms. Thomas’s speech, it is difficult to understand why the Supreme Court has been so favorable to arbitration in the recent decades. To me, it seems like a no-brainer that companies, like AT&T, should not be allowed to prohibit class-actions in their arbitration agreements. If all big companies have arbitration agreements that prohibit class-actions, then consumers are left with no choice but to contract away their rights. Additionally, many, if not the majority, of consumers do not understand the significance of being able to bring a class action when they are contracting to buy a phone.
Also, I agree with Phillip’s comment that many lay people don’t actually want to be part of juries, but I don’t think that means that people want to give up their individual right to a jury. It is easy to say that ADR is the way to go if you are not the one bringing a claim. It is much different if you have a claim and have no choice but to arbitrate. Although I see the advantages of ADR (cost, time, efficiency, etc.), I know that if I was bringing a claim against a company I would like some sort of a say regarding which process is the best to use.
Like Kime, I too have only completed a cursory study of arbitration over the past couple of weeks in class. After reading about arbitration and learning the history and development of arbitration, discussing the flexibility it offers disputants, and the potential for greater efficiency in terms of time and cost, I was pretty convinced that arbitration was, in general, a pretty good avenue for parties to pursue.
After perusing Professor Thomas’ speech, however, which provides a different perspective, I’m not so sure.
Certainly, arbitration is a great option in certain contexts, such as international disputes and disputes between large entities. However, more and more, given the recent Supreme Court decisions regarding arbitration, potential disputes arising from mundane, day to day, small claims-like situations are required to be arbitrated. As Professor Thomas’ speech points out, consumers are essentially stripped of their ability to have their disputes resolved; arbitration will often be more costly than their claim is worth, the option to bring class actions can be contracted out of agreements, and consumers aren’t able to hire lawyers because of the arbitration agreement.
The situation is made worse for the “little guys” based on the fact that arbitral awards are not easily vacated (and the costs associated with attempting to have an award vacated are likely high, as well).
I agree with Kime that in these types of situations, it seems like we’re sacrificing justice for the sake of efficiency, and something should change to protect the little guys.
I completely agree that something needs to be done to enable people with small claims to vindicate their rights. Just from the cursory study of arbitration I’ve done over the last couple of weeks, I feel strongly that arbitration is NOT the answer (I remain silent, for the time being, on summary judgments and jury trials).
Arbitration initially emerged as a less expensive and more efficient channel through which people could resolve disputes. The parties usually new each other or may have had some regular course of dealing with one another through business or labor transaction. Rather than spend and arm and a leg in court battles over claims that were relatively small (and destroy relationships by suing each other), they might have decided, “Hey, let’s make this quick and easy for the both of us. Let’s decide that if/when there’s a disagreement between us, we’ll call up Mike (a wise, knowledgeable and neutral mutual friend/expert in the field) tell him about our dispute, and have him pick a side. We’ll stick with whatever side he picks, squash the beef, and move on.” I’m sure the discussions were more eloquent and detailed than this, but that’s the gist the arbitration “agreement.”
Today’s arbitration is a far cry from this. As Prof. Thomas points out in her keynote speech, arbitration is no longer cheap or efficient. Requiring a party to pay a $4,000 filing fee, to take her example, is definitely not cheap! Further, it was for a $5,600 claim, which pretty much defeats the purpose of filing the claim, as the $4,000 didn’t even include the costs for arbitrators, potential travel, taking time off of work, etc. By the time all is said and done, someone with this claim easily ends up farther in the hole than when they started. Arbitration proponents often claim that, “Well, it’s an agreement. If they didn’t want to handle disputes through arbitration, they shouldn’t have agreed to it.” I say that’s impractical and unrealistic. Signing a contract with an arbitration provision is not an “agreement” because the agreement is one-sided: the company drafts the provision, often in a way that favors itself, and the signor (the “little guy”) has to basically take it or leave it. OK, so leave it, right? Well, the problem is every other company providing similar services has essentially the same arbitration clause in their contract, so no matter where you turn, if you want that cell phone, cable service, laptop, moving service, and so on, you’re stuck with having to “agree” to pay a more-than-$30 filing fee for your $30 claim, as the Concepcions did. In effect, they’re not getting that $30 back, because they don’t even have a realistic CHANCE to get it back. AT&T gets to walk away with their $30, and there’s no practical thing the Concepcions (and many other like them) can do about it. Quick and easy, indeed…for AT&T.
While arbitration may be acceptable as a form of dispute resolution for parties of equal bargaining power – who have an equal hand in drafting the terms of the agreement – it’s inappropriate and even unjust when the agreement is not between parties of such equal power. Maybe the Supreme Court thinks it’s more efficient, but I think it is sacrificing justice for efficiency, and the little guy – who the justice system is originally designed to protect – keeps getting the short end of this justice deal. Something definitely needs to change.
But what does it matter if the laymen are making less of the judicial decisions. For one, most people don’t want to go to jury duty. And secondly, if everybody involved agrees on ADR than their happy and their dispute gets taken care of.