Washington, D.C.—A new study released today by the U.S. Chamber Institute for Legal Reform (ILR) found that consumers win more money, more often, and more quickly through arbitration than in litigation. The analysis of more than 100,000 consumer arbitration and court claims from 2014-2020 was conducted by NDP Analytics, a Washington-based strategic economic and communication research firm. The new study on consumer arbitration comes the year after ILR released its groundbreaking study that found arbitration is also a simpler, faster, and fairer way for workers to resolve employment disputes than in court.
Fairer, Faster, Better II: An Empirical Assessment of Consumer Arbitration shows that consumers are more likely to win cases, get more money, and get it faster through arbitration than litigation.
The study found that in claims initiated by consumers:
- Consumers were more likely to win in arbitration (44 percent) than in court (30 percent).
- On average, consumers won more money through arbitration ($68,198) than in court ($57,285).
- Arbitration disputes were resolved on average faster (299 days) than in litigation (429 days).
“The data is clear: Arbitration is a simpler, faster and fairer way for both consumers and workers to resolve disputes,” said Harold Kim, president of the U.S. Chamber Institute for Legal Reform. “Lawsuits can be expensive, and it can be nearly impossible to find a lawyer to take low-dollar claims. For many people, arbitration is the only way to resolve a dispute.”
The data analyzed by NDP was for consumer arbitration awards and consumer court judgments for claims that terminated between January 1, 2014 and June 30, 2020. It included 24,629 arbitration cases from the American Arbitration Association and JAMS (formerly known as Judicial Arbitration and Mediation Services, Inc.). It also included 76,615 federal court cases, excluding class actions and cases where the plaintiff was a federal government agency.
In May 2019, the Institute for Legal Reform released a study on employment arbitration also conducted by NDP Analytics. Fairer, Faster, Better: An Empirical Assessment of Employment Arbitration found that workers win more money, more often, and more quickly in arbitration than in court.