The U.S. Chamber of Commerce has issued further criticism of the recent articles on arbitration published in the New York Times. The Chamber’s initial comments focused on the Times’ first article in which Alan Kaplinsky, Practice Leader of Ballard Spahr’s Consumer Financial Services Group, was quoted extensively. In its latest comments, the Chamber discusses how the Times “continued its deceptive caricature of arbitration” in its second article.
The Chamber observes that the Times claimed it examined “records from more than 25,000 arbitrations,” from which it selected about 16 examples “each of which paints arbitration unfavorably.” The Chamber found that the Times “completely ignored statistical evidence compiled by independent scholars finding that most people in arbitration fare at least as well as—if not better than—they would in court.” It asserts that, as a result, the Times “built its case on hand-picked outlier cases that don’t reflect the experience of most consumers.”
The Chamber observes that the Times also ignored “every single legal protection that applies to arbitration.” It asserts that “a fair appraisal of arbitration’s procedures show that it is much friendlier to consumers than our complex and slow-moving court system” and notes that the authors ignored the “consumer arbitration rules used by the most well-known arbitration administrator, the AAA, which provide numerous safeguards for consumers, such as strict standards to protect against arbitrator bias and providing that the business—not the consumer—pays all arbitration fees above a $200 cap.” The Chamber adds that “many companies pay the entire cost of arbitration.”
It also points out that arbitration has simpler evidentiary and procedural rules that “allow consumers to present their claims without needing to hire a lawyer, and leading arbitration providers permit hearings to be conducted on the basis of paper submissions or by telephone so that claimants do not need to miss work or incur unnecessary travel costs in order to attend.”
The Chamber also notes that the Times “never mentions that the law contains clear and effective protections against unfair arbitration clauses such as the ones described in its examples. Courts have the power to invalidate arbitration agreements that violate generally applicable principles of fairness.” The Chamber calls it “simply misleading for the Times to suggest that arbitration is a privatized justice system that is not subject to oversight.”
Finally, noting that the Times identifies what it describes as examples of arbitrator bias and corruption, the Chamber observes that “the relevant question isn’t whether arbitration is perfect, because no system of dispute resolution is perfect. Rather, the question is whether bias and corruption are any more common in arbitration than they are in the judicial system.” The Chamber states that the answer to that question is “no” and cites examples of wrongful behavior by plaintiffs’ lawyers and judges. It also notes that there are extensive reports, including by the Times, about “the inadequacies of small claims courts, including budget cutbacks producing long waits that force individuals to leave empty-handed, only to return another day in the hope that their disputes will eventually be heard.” It comments that courts do not always decide cases correctly and cites examples of situations where a judge or jurors did not meet their responsibilities.
The Chamber concludes by stating that “rather than looking at the big picture, the Times simply cherry-picked a handful of troubling stories and then wrongly implied that they were representative of all arbitrations.” It finds it “too bad that the Times decided to bury” information showing that arbitration works as well or for consumers than litigation in court does rather than give its readers “the full story.”
