Emptying The Courtrooms . . .
The January 27, 2018 edition of The Economist has two short articles critical of arbitration in the US: "Shut out by the small print" (p. 10) and "Kept out of the courthouse" (p. 61). The articles are somewhat duplicative -- here are a few of the highlights:
- In the early 1990s, 2% of non-unionized employees were bound by mandatory arbitration agreements - now it is more than half.
- Arbitration was originally designed for commercial disputes, and works best when power is balanced between the two sides.
- In employee/employer disputes, and business/consumer disputes, power tends to tip in favor of the employer and the corporation.,
- Employers tend to have better outcomes in arbitration than in court lawsuits.
- Given the political climate, legislative attempts to limit arbitration seem unlikely.
- "The popularity of arbitration is a sign of how very costly and technical the courts have become, says Andrew Pincus, a partner at Mayer Brown, a law firm, who advises companies on such procedures."
- Consent to arbitration is "a fantasy of consent, rather than the real thing," says Katherine Stone at UCLA.
- Arbitrators in employment disputes may be especially reluctant to award punitive damages, out of concern that they will never arbitrate another employment dispute.
- The confidential aspects of arbitration and lack of transparency may silence victims.
- "In the wake of the #MeToo movement, legislators are now taking aim at arbitration in harassment cases."
HAT TIP to my colleague Mike Hensley who brought the two articles to my attention today.
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