Arbitration Quotes

Arbitration, Not Litigation Helping Consumers and Employees Obtain Justice for Nearly 80 Years


“I find it problematic that Congress would impose new, unnecessary restrictions on an effective public policy which has been championed by the federal government for over 75 years.  Arbitration . . . has been proven effective as an expeditious and less costly way to resolve disputes which would otherwise occupy court attention for years.   S. 1782 appears to be a solution in search of a problem.”

Kenneth Feinberg
Special Master for the September 11th Victim Compensation Fund
Letter to U.S. Senate Committee on the Judiciary
December 19, 2007


 “[N]ational arbitration organizations have developed . . . models for fair cost and fee allocation.”

U.S. Supreme Court Justice Ruth Bader Ginsburg
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 95 (2000) (concurring in part and dissenting in part)

 
“Arbitration agreements allow parties to avoid the costs of litigation, a benefit that may be of particular importance in employment litigation, which often involves smaller sums of money than disputes concerning commercial contracts. These litigation costs to parties (and the accompanying burden to the Courts) would be compounded by the difficult choice-of-law questions that are often presented in disputes arising from the employment relationship.”
U.S. Supreme Court Justice Anthony Kennedy
Circuit City Stores, Inc. v. Adams 532 U.S. 105 (2001)
 
 
[Without arbitration], “the typical consumer who has only a small damage claim (who seeks, say, the value of only a defective refrigerator or television set) [would be left] without any remedy but a court remedy, the costs and delays of which could eat up the value of an eventual small recovery.”

U.S. Supreme Court Justice Stephen Breyer
Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 281 (1995)


“[T]his change [banning pre-dispute arbitration agreements] would leave the majority of employees who need arbitration to obtain justice empty handed.”

Lewis Maltby
President, National Workrights Institute
“Out of the Frying Pan, Into the Fire:  The Feasibility of Post-Dispute Employment Arbitration Agreements,” 2003


“Most of the [arbitration] clauses appear in many respects to put consumers on equal terms with the businesses that drafted them. . . . Arbitration is available at either party's request and is held (almost always) at a location convenient to the consumer and the business. Either party may be represented by counsel. . . .  The vast majority of clauses place no limits on substantive remedies. And the arbitrator's decision is equally binding on both parties. These terms suggest prima facie that businesses are placing consumers on equal footing with themselves in resolving any future disputes.”

Linda J. Demaine and Deborah R. Hensler
“‘Volunteering’” to Arbitrate Through Predispute Arbitration
Clauses: The Average Consumer’s Experience,” 2004


“Arbitration improves access to justice.  It enhances the likelihood of recovery.  It delivers speedier results.  It keeps costs down.  For many, it is a superior option to the expensive, slow, cumbersome ways that have come to typify our civil justice system.”

Peter B. Rutledge
Catholic University of America, Columbus School of Law
“Arbitration – A Good Deal for Consumers,” 2008

 

Consumers and Employees Fare Better In Arbitration


•    A recent analysis of 2006 AAA consumer cases, in which the consumer is the claimant, yielded an 81% favorable outcome for the consumer, either through an outright win or voluntary settlement.
•    A similar analysis of 2006 employment cases administered by the AAA found that employees had a favorable outcome 77% of the time.

American Arbitration Association
Testimony of Richard Naimark
U.S. Senate Judiciary Committee
December 12, 2007

•    Research to date indicates that more employees are able to gain access to justice through arbitration than through litigation, and that they are more likely to win their cases in arbitration (if they use a qualified arbitration provider).
•    Employee success rate in arbitration:  62%
•    Employee success rate in court:  43%
The National Workrights Institute
“Employment Arbitration: What Does that Data Show?”2008

•    Arbitration results were 33% faster than litigation. The median time from filing to judgment was 16 1⁄2 months in arbitration, while lawsuits took 25 months to conclude.
•    Median monetary awards for successful claimants and plaintiffs were approximately the same:  $100,000 in arbitration versus $95,554 in litigation.
Michael Delikat and Morris M. Kleiner
“An Empirical Study of Dispute Resolution Mechanisms:  Where
Do Plaintiffs Better Vindicate Their Rights?” 2003
 

•    Consumers prevailed more often than businesses in cases that went to an arbitration hearing . . . 55 percent of the arbitrations [in consumer lending cases] were resolved in the consumer’s favor.
•    Consumers obtained favorable results in close to 80 percent of the cases that were reviewed.
•    A substantial majority of consumers surveyed were satisfied with the arbitration process, as shown by the 69 percent who indicated that they were satisfied or very satisfied with the arbitration process.

Ernst & Young
“Outcomes of Arbitration:  An Empirical Study
of Consumer Lending Cases,” 2004


Legislation Banning Pre-Dispute Arbitration Will Effectively End All Arbitration

“Analysis of data from the American Arbitration Association reveals that post-dispute agreements to arbitrate employment disputes are rare, despite the widespread availability of this option. Only about 6% of all employment arbitration comes from post-dispute agreements.”

“95% of the management attorneys we interviewed said they would not agree to arbitrate a dispute in which they could obtain summary judgment from a court.”

“[M]ost employees will not be able to secure their employer’s agreement to arbitrate once the dispute arises. The vast majority of employment disputes, however, do not involve enough damages to support contingent fee litigation. This means that outlawing pre-dispute agreements to arbitrate will leave many employees with no access to justice.”

Lewis Maltby
President, Workrights Institute
“Out of the Frying Pan, Into the Fire:  The Feasibility of Post-Dispute Employment Arbitration Agreements,” 2003


“The odds of an agreement for binding arbitration being entered into after a dispute has arisen are not great. At that stage one party or the other will have a view that traditional litigation offers some advantage which the party does not
choose to relinquish”
William Paul
Former President of the American Bar Association
“Arbitration v. Litigation in Energy Cases,” 2002


“Mandatory arbitration clauses are the only means by which a consumer or employee can have assurance of meaningful access to justice in most cases.”

American Arbitration Association
October 25, 2007
Hearing on: H.R. 3010, the “Arbitration Fairness Act of 2007”
House Judiciary Committee, Subcommittee on
Commercial and Administrative Law


“The available evidence indicates that if Congress eliminated arbitration, many of these individuals who it is trying to protect will not be able to find an attorney.  If they can, few of their cases will reach a jury, and if they do, justice will come far later than it does for them in arbitration.”

“[Ending pre-dispute arbitration agreements] likely would increase the costs of dispute resolution, and a portion of these costs would be passed onto employees (in the form of lower wages), consumers (in the form of higher prices) and investors (in the form of lower share prices).  Ironically, then, eliminating pre-dispute arbitration agreements may end up hurting some of the very groups that Congress is trying to protect.  The only group who would come out ahead in this scenario is the lawyers, who would reap higher fees engaging in more protracted litigation.”

Professor Peter B. Rutledge
Associate Professor of Law
Columbus School of Law, Catholic University of America
October 25, 2007

Hearing on: H.R. 3010, the “Arbitration Fairness Act of 2007”
House Judiciary Committee, Subcommittee on
Commercial and Administrative Law


“It is not at all apparent to me that prohibiting arbitration will lead to a fairer, more equitable battlefield in the courtroom.  Indeed, I believe the opposite to be true; the small, economically strapped litigant cannot afford to wage war in the courtroom.  A war of attrition ensues in which the costs and uncertainty of litigation chill the individual from exercising the option of litigating.  Arbitration is a preferable alternative, both in terms of efficiency and cost.”

Kenneth Feinberg
Special Master for the September 11th Victim Compensation Fund
Letter to U.S. Senate Committee on the Judiciary
December 19, 2007