Arbitration Agreement Talking Points

The principle of effective justification of material rights is indispensable if the courts are to justify closing the door of the courthouse to otherwise qualified parties to the proceedings. In a number of cases relating to consumer protection and labour law, the applicants argued that the application of declarations of waiver of collective actions would oblige the parties to the proceedings to waive their material rights and that no arbitration proceedings should therefore be necessary.19 These cases were not reviewed by Concepcion, because the Concepcion decision, as explained above, involved a conflict between the FAA and state law. and the Tribunal found that the law of the State was anticipated. On the other hand, the doctrine of effective justification is paramount when there is a potential conflict between the FAA and a federal law. Declarations of waiver of class actions appear to be widespread in employment agreements. In a 2015 survey of 481 practicing labour arbitrators, Colvin and Gough asked arbitrators about the provisions of arbitration agreements in the cases they had decided. Interviewees indicated that in 52 percent of the agreements in which they had decided, class action waiver statements were included.46 In the absence of official government statistics on the extent of mandatory arbitration, our best estimates come from academic surveys that examined aspects of the issue. The picture they show is considerable growth in the 1990s and 2000s. These studies are summarized below. In recent years since the Supreme Court upheld the use of class action prohibitions associated with arbitration clauses, this type of composite clause has become ubiquitous in the fine print, which regulates employment, credit cards, mobile phones, bank accounts, internet service providers and countless other types of daily transactions.

Increasing arbitration clauses requiring the losing party to bear the winning party`s costs, including attorneys` fees, will have an even deeper moderating effect on the ability of ordinary citizens to have their day in court. Arbitration agreements can be useful when an employee raises work-related disputes during or after employment. Employers should consider a binding agreement in which these claims are heard by a single arbitrator, chosen jointly, to avoid class actions, jury trials, higher costs of court proceedings, and undue delays, which often result in the loss of witnesses and the erosion of memory of events. These potential benefits could outweigh concerns about the increase in arbitration fees over the past decade. In the field of labor and consumer arbitration, the employer is probably a repetitive player, while the worker or consumer is probably a one-shot player.56 How can one then compensate for the advantage of the rehearsal player? One possibility is that the legal aid of each side is an effective rehearsal player in the system. A large, demanding law firm representing the company could be compensated by an aggressive and demanding law firm representing the plaintiff. However, in practice, the legal representation of workers and consumers is much more fragmented and of different quality than that of companies that can normally afford to use law firms of large and demanding companies to defend their business. . . .