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National Arbitration Forum Report:
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Consumer Arbitration before the American Arbitration Association The Searle Civil Justice Institute Task Force on Consumer Arbitration conducteda consumer arbitration study and released its results in March 2009. The analysis considered 301 arbitration cases before the American Arbitration Association (AAA) involving consumers from April through December 2007 and concluded that:
The study also included an examination of due process protocols, or fairness principles, of the American Arbitration Association, JAMS, and the National Arbitration Forum. Arbitration Empirical Studies This analysis of empirical studies was published in Vol. 18, No. 1 of Alternative Resolutions of the State Bar of Texas ADR Section. Its main finding is that "empirical studies do not support the current criticisms of arbitration." The Current State of Consumer Arbitration This analysis of empirical evidence on consumer arbitration was published in Vol. 15, No. 1 of the ABA Dispute Resolution Magazine. Authors Sarah Rudolph Cole and Theodore Frank take a look at the Public Citizen report and evidence collected in California and elsewhere; they conclude that claims that arbitration is inherently unfair to consumers are overstated. Data, in fact, reveals different, and more positive, conclusions about the state of consumer arbitration. In many of the cases where the business entity prevailed in arbitration, the arbitrator protected the consumer from overreaching claims by awarding less than the full amount requested. This effect is even more compelling in arbitration cases where the consumer party does not respond to contest the claims, because arbitration provides more protection than the consumers would typically receive in a default judgment proceeding in court. They also debunk the myth that businesses win at a "stunning" rate when debt collection cases are arbitrated. The empirical evidence analyzed: The Public Citizen Report (2007), California Consumer Arbitration Data (Navigant, 2008), Consumer and Employment Arbitration in California: A Review of Website Data Posted Pursuant to Section 1281.96 of the Code of Civil Procedure (California Dispute Resolution Institute, 2004), Outcomes of Arbitration: An Empirical Study of Consumer Lending Cases (Ernst & Young, 2004), The Same Result as in Court, More Efficiently: Comparing Arbitration and Court Litigation Outcomes (Mark Fellows, 2006), Arbitration - A "Good Deal" for Consumers (Professor Peter Rutledge, 2008) National Arbitration Forum: California Consumer Arbitration Data
The study also considered conclusions made by Public Citizen in a September 2007 report on the same set of data. Navigant concluded that the Public Citizen report omitted several facts, including.
Arbitration – A Good Deal for Consumers: A Response to Public Citizen The white paper explains how arbitration benefits everyone – consumers, businesses, taxpayers, and our justice system. The Report presents compelling empirical evidence that debunks sensational claims about arbitration. National Survey of Likely Voters The study of registered voters likely to vote in the 2008 election supports that arbitration has become the preferred way for consumers and businesses to resolve legal disputes without going to court Key findings from the survey found that nearly all (82%) chose arbitration to settle a serious dispute with a company; only 15% chose litigation. The Same Results As In Court, More Efficiently: Comparing Arbitration And Court Litigation Outcomes When consumers bring arbitration claims against businesses, the consumers prevail in 65.5% of cases that reach a decision. To compare, buyer plaintiffs litigating contract claims in the 75 largest American counties prevailed 61.5% of the time overall, and 60.9% of the time in cases decided by bench trials. When businesses bring arbitration claims against California consumers, the businesses prevail in 77.7% of cases that reach a decision. To compare, seller plaintiffs litigating contract cases in the largest 75 counties prevail 76.8% of the time overall and 78.9% of the time in cases decided by bench trial. Arbitration: Simpler, Cheaper, and Faster Than Litigation A survey by Harris Interactive conduced for the U.S. Chamber of Commerce Institute for Legal Reform found wide satisfaction among individuals who chose arbitration over litigation to resolve a dispute. The independent survey was conducted among 609 adults who had participated in a binding arbitration case that reached a decision. Results from the final report, entitled Arbitration: Simpler, Cheaper, and Faster Than Litigation, showed that when comparing arbitration to litigation:
Outcomes of Arbitration: An Empirical Study of Consumer Lending Cases This independent study on consumer lending cases confirmed that consumers found the arbitration process to be beneficial in resolving legal claims, and that reports that consumers are disadvantaged by contractual arbitration are clearly erroneous. The observations from the study as noted in the Executive Summary state:
Employment Arbitration. What Does the Data Show? A study conducted by the National Workrights Institute found that employees who settled disputes through arbitration prevailed 62% of the time as compared to a 43% win rate in court. Consumer and Employment Arbitration in California: A Review of Website Data Posted Pursuant to Section 1281.96 of the Code of Civil Procedure Reviewing the results of 1,559 consumer and employment arbitrations, the California Dispute Resolution Institute found that the median time to resolve a dispute by arbitration was 104 days. The median cost of resolving these disputes by arbitration was $870. By comparison, cases involving consumer goods and employment claims take 650 to 720 days to be resolved court, according to the National Center for State Courts, indicating that arbitrating disputes is approximately 85% faster than litigating similar claims. Arbitration and Unconscionability This article explains that pre-dispute arbitration provisions are valid and enforceable under law. In addition, the article highlights other studies to indicate that arbitration is fair and provides benefits to individuals. Survey On Arbitration Formed in August of 2002, the ABA Section of Litigation Task Force surveyed trial lawyers regarding various ADR processes. When comparing arbitration to litigation, 78% of those surveyed said that arbitration was timelier than litigation, and 56% said that arbitration was more cost effective than litigation. Comparing Litigation And Arbitration Of Employment Disputes: Do Plaintiffs Better Vindicate Their Rights In Litigation? This study compared various outcomes and timing factors involved in 125 employment discrimination cases filed in the Southern District of New York with 186 arbitrations involving employment disputes in the securities industry. Employee claimants prevailed 46% of the time in an arbitral forum versus 34% in federal court. The outcomes involving arbitration generated higher median monetary awards for successful claimants--$100,000 for arbitration compared with $95,554 in court. Furthermore, arbitrations were significantly more efficient than litigation, as the median time from filing to judgment was 16.5 months for arbitrations and 25 months for claims subject to litigation. Report To The Securities And Exchange Commission Regarding Arbitrator Conflict Disclosure Requirements In NASD And NYSE Securities Arbitrations The data were derived from securities arbitrations involving consumers over a 21-year period (1980-2001). During those years securities industry arbitrators decided 31,001 public customer cases, and 16,294 of those cases (52.56%) resulted in awards for consumers. (Note: Federal court data from the Administrative Office of the United States Courts show plaintiffs in “Stockholders Suits” in 2000 prevailed only 32% of the time). Furthermore, in a study surveying the responses of NASD investor-participants regarding their perceptions of fairness of SRO arbitrations, the results showed that an overwhelming 93% of the respondents believed their cases were handled fairly and without bias. Also, over 91% of respondents said their arbitrators demonstrated a level of fairness that was classified as excellent or good. 2003 Legal Dispute Study : Institute for Advanced Dispute Resolution Updating a study conducted in 1999, this study revisits Americans’ awareness, knowledge, attitudes and experiences regarding arbitration as an option for resolving disputes. Most notably, the study found that 64% of respondents would choose arbitration over a lawsuit in disputes involving monetary relief. Further, two-thirds or some 67% of respondents felt that lawsuits take too long, while one-third or some 32% said that lawsuits cost too much. Costs And Value Of Arbitration In a 1990 survey, 100% of respondents found arbitration to be quicker than litigation. Furthermore, 89% found that arbitration was less expensive than litigation. Also noteworthy in the survey was that only 17% of attorneys’ time was spent on discovery in an arbitral setting, compared to 45% in court, and over half of the respondents believed arbitral awards were more equitable than the outcomes in litigation. Due Process At Low Cost: An Empirical Study Of Employment Arbitration Under The Auspices Of The American Arbitration Association This empirical study of 200 employment arbitration awards, randomly selected from a pool of 356 awards made by arbitrators, evaluated numerous factors and refuted common criticisms of employment arbitrations. The study concluded that employment arbitration is not biased in favor of employers or highly compensated employees and that arbitration can competently resolve statutory employment discrimination claims, contrary to former criticism in this regard. Also, the study presented evidence that conclusively refutes any empirical support for the “repeat player effect,” the theory that an employer who arbitrates more than once will win more frequently than other employers. Private Justice: Employment Arbitration and Civil Rights This article explains that by lowering costs, private arbitration holds the potential for bringing justice to many to whom it is currently denied. Employee-plaintiffs generally fare as well in arbitration as they do in court, even though most of the experiences they reflect took place before the establishment of the due process standards that currently exist. In the future, the quality of justice employees receive in arbitrations under these standards should be even better. Securities Arbitration: How Investors Fare Comparing the results of over 6,600 awards issued during a six-month period from both industry-sponsored self-regulatory organizations (SROs) and independent dispute resolution providers, the Government Accounting Office (GAO) concluded that for most securities arbitrations, an average of 60% of investors received an award, and the amount awarded averaged about 60% of the amount claimed. Federal Court data from the Administrative Office of the United States Courts shows that in 1991 plaintiffs in “Stockholders Suits” prevailed only 44% of the time. |
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