A short article appeared in The New York Times on June 13, 1925 headlined “Federal Court Cases Double in Ten Years.” From 1915, the number of cases had risen annually from nearly 63,000 to about 126,000. Despite their best efforts, the federal courts were drowning in cases, but change was coming. Four months earlier, Congress had passed the Federal Arbitration Act.
In the ensuing eighty three years, arbitration has proven to be a quick, fair and efficient alternative to lawsuits and, as a result, it has become a preferred alternative way to seek justice for millions of Americans.
But hold on! Some are now suggesting that perhaps arbitration isn’t the success story it appears to be, and they want to take it away.
Last fall, for example, the pro-lawsuit special interest group Public Citizen released a paper purporting to show that arbitrations find against the consumer the majority of the time. Unfortunately, Public Citizen tortures the statistics to try to make their case.
For a complete analysis of how misleading the Public Citizen report is, click on the link to the report: Arbitration – A Good Deal for Consumers by Dr. Peter B. Rutledge.
Nonetheless, the plaintiffs’ bar is taking up the Public Citizen’s report as proof that consumers are being denied their right to access the courts – and thus their access to justice – because of pre-dispute arbitration requirements.
Their timing, never a coincidence, was carefully coordinated to coincide with the introduction of the Feingold/Johnson Arbitration Fairness Act of 2007, a proposal that would effectively outlaw arbitration in virtually all consumer, employment and franchise contracts, leaving the courthouse as the only option for settling disputes.
That may be good for lawyers, but not so good for consumers. Why?
First, consumers get disputes resolved faster in arbitration than in court. The American Arbitration Association and other groups show that arbitration takes on average anywhere from four to 10 months to resolve a case. The federal courts take two years, on average, to get a case to trial, with state court backlogs showing similar delays.
Lisa A. Rickard serves as president of the U.S. Chamber Institute for Legal Reform (ILR), where she provides strategic leadership to ILR's comprehensive program aimed at changing the legal culture that has resulted in our nation's litigation explosion.