Omri Ben-Shahar of Chicago has written Arbitration and Access to Justice: Economic Analysis. Here is the abstract:
Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive effect. Paradoxically, rules that limit the use of pre-dispute arbitrations clauses hurt, rather than protect, weaker consumers, as they mandate a regressive reallocation. I also consider the role of class actions, and whether weak consumers are potentially the indirect beneficiaries of class action litigation. This argument has theoretical merit, but it, too, is limited in ways that are often unappreciated.
0 thoughts on “Omri Ben-Shahar Paper Looks at Which Consumers Are Hurt Most by Arbitration Clauses”
This can appear a valid argument but there is a solution to this apparent problem: It is called pro-bono representation.
If attorneys were “requested” to contribute a certain amount of such cases to the community, weaker consumers would have access to open litigation and they would not be “hurt” by the removal of the Arbitration Clause.
I can clearly recall a situation, some 23 years ago, when a fraud perpetrated by stock brokers could only be “arbitrated” by a select panel. On close examination, the panel consisted solely of…stock brokers. Is this the kind of justice that we want to bring back?
I sincerely hope not.