Richard Frankel of Drexel has written Do Arbitration Providers Have Incentives to Favor Businesses over Individuals? Mass Arbitration as a Case Study, Journal of International Dispute Settlement (forthcoming 2027). Here’s the abstract:
When it comes to selecting arbitrators to resolve a dispute, the arbitration system goes to great lengths to avoid arbitrator bias. Both parties are often allowed to strike potential arbitrators, arbitration rules and statutes require arbitrators to make disclosures to prevent conflicts of interest, and arbitration providers have established codes of ethics for arbitrators to follow.
When it comes to arbitration providers, however, few rules or norms exist to protect against bias. This is surprising, because arbitration providers—the entities that establish the rules to govern the arbitration and that pick the initial list of potential arbitrators—often wield as much influence as individual arbitrators. Moreover, at least with respect to contracts between companies and consumers or employees, arbitration clauses tend to be adhesive non-negotiable documents in which the company drafting the arbitration clause unilaterally selects the arbitration provider. This format raises concerns that arbitration providers have incentives to create rules that favor companies over individuals, or else the companies will simply take their business to a friendlier provider.
Typically, it can be hard to test whether arbitration providers display systemic bias because they change their rules slowly and incrementally. However, the sudden and unanticipated rise of mass arbitration has caused arbitration providers to adjust their rules and practices on the fly as mass arbitration has impacted arbitration proceedings in ways that their rules did not anticipate. Accordingly, mass arbitration offers a rare window into how arbitration providers amend their rules and procedures.
This essay suggests that arbitration providers’ reaction to mass arbitration is consistent with a pro-business bent. Providers have actively collaborated with companies to adopt new rules, emphasized the benefits to corporations of their mass arbitration rules, and amended rules in response to corporate complaints while (at least not yet) declining to amend rules in response to plaintiff complaints. Binding arbitration in the consumer and employee contexts has been widely criticized as a stacked deck—one that restricts employee and consumer rights and that makes it more difficult for plaintiffs to gain access to justice. Mass arbitration was designed to rectify this imbalance and level the playing field by giving more leverage to individual plaintiffs. However, as long as arbitration providers have incentives to favor businesses over individuals, this will mute any equalizing potential of mass arbitration and will simply replicate the very types of power imbalances that impact binding arbitration in consumer and employment disputes more generally.
