Supreme Court and Congress Focus on Mandatory Pre-Dispute Arbitration Agreements


This article by Victoria Holstein-Childress and reprinted from the Westlaw Journal, Corporate Officers & Directors Liability, discusses mandatory pre-dispute arbitration clauses in consumer financial services contracts and the Supreme Court's April 2011 decision in AT&T Mobility LLC v. Concepcion. The Concepcion decision was met with reintroduction of the Arbitration Fairness Act of 2011 (HR 1873) in Congress, which would eliminate the use of class action waivers and ban mandatory pre-dispute arbitration agreements in consumer, employment and civil rights matters.

Moreover, there is speculation that class action waivers will be attacked by the newly created Consumer Financial Protection Bureau. The authors are not persuaded that renewed attacks on mandatory arbitration genuinely and meaningfully advance consumer protection; they propose that legislative and regulatory action would be better focused on ensuring that arbitration agreements include appropriate procedural safeguards to guarantee a fair arbitration process.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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