The Perils of Class Arbitration
(photo by
Ken Douglas)
For some of the reasons your clients might not want to include arbitration clauses in their consumer contracts, see the Metropolitan Corporate Counsel Article on Class Arbitration by P. Christine Deruelle and Robert Clayton Roesch of Weil, Gotshal & Manges LLP.
Excerpt on the Perils of Class Arbitration below:
First, the scope of review available for an arbitrator's ruling is significantly limited. . .
Second, the conventional time and cost-savings of arbitration may be lost in class proceedings, since each of the interim phases related to class- and merits- arbitral awards will carry with them potential burdens relating to discovery, briefing, hearings, and time, money and effort spent in obtaining judicial review at each of the various phases, which will not necessarily be present in individual arbitrations.Third, the parties' arbitrator selection process will likely be guided by different factors in a class arbitration proceeding than in an individual arbitration, since the fate of all of the class claims will be decided by a single arbitrator or panel.
Fourth, the specter of class arbitration disposes of the presumption of privacy and confidentiality in arbitration.
Part II of this two-part article will address potential means for companies and practitioners to attempt to avoid these and other pitfalls of class arbitration.
Don't let this summary lead you to believe that this article is not extensive, thorough and deep. If this is a topic of interest to you, this is one of the best articles on the topic I've seen. Do click on the above link and take a peek.




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