Two Revealing Quotes from the Times Arbitration Report

by Jeff Sovern

 Deepak posted earlier about the extraordinary Times story on arbitration.  I have been studying arbitration for some time, and yet some items in the story were new to me. Though the entire article demands to be read, here are two especially revealing quotes:

Since no government agency tracks class actions, The Times examined federal cases filed between 2010 and 2014. Of 1,179 class actions that companies sought to push into arbitration, judges ruled in their favor in four out of every five cases.

[B]y assembling records from arbitration firms across the country, The Times found that between 2010 and 2014, only 505 consumers went to arbitration over a dispute of $2,500 or less.

Putting those quotes together yields the conclusion that businesses are able to use arbitration clauses to defeat claims where individual consumers have lost small amounts–meaning businesses are free to cheat consumers out of small amounts, unless regulators stop them.

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