WASHINGTON, D.C. — Americans strongly oppose legislation that would dramatically alter the way consumers and employees resolve disputes, according to a new bipartisan survey released today by the U.S. Chamber Institute for Legal Reform.
“For more than 80 years, arbitration has helped Americans settle disputes fairly, quickly and inexpensively, without having to file a lawsuit or navigate the court system,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR). “The sweeping legislation pending in Congress would effectively eliminate arbitration, leaving many employees and consumers with little recourse.”
The recent poll found that 71 percent of likely voters oppose efforts by Congress to remove arbitration agreements from consumer contracts, and 82 percent prefer arbitration to litigation as a means to settle a serious dispute with a company.
The proposed legislation supported by the plaintiffs’ bar would declare voluntary agreements to resolve differences through arbitration unenforceable, wiping out parts of hundreds of millions of existing consumer and employment contracts. Many consumer and employment contracts contain provisions requiring the parties to resolve conflicts by arbitration rather than filing a lawsuit. For example, cell phone contracts, credit card applications and investment broker agreements often include pre-dispute arbitration provisions.
Despite the opposition of most Americans, “eliminating arbitration is a top priority of the trial lawyers’ lobby,” said Rickard. “With arbitration out of the way, they can bundle hundreds of thousands of cases together into class action lawsuits, reaping huge fees for themselves—but only pennies on the dollar for consumers.”
Rickard noted it is almost impossible to get both parties to agree to arbitrate a dispute once a disagreement has arisen and that most disputes settled by arbitration do not involve large enough amounts of money to interest an attorney in taking the case. “Without arbitration, consumers and employees will have two choices—try to navigate the legal system on their own, or just give up,” she said.
Also today, the Institute for Legal Reform released a detailed analysis of a Public Citizen report cited by opponents of arbitration. Professor Peter “Bo” Rutledge, of Catholic University Columbus School of Law, conducted the analysis, concluding that the study “is wrong, both on the facts and in its ultimate conclusions.” Contrary to the Public Citizen study, Rutledge said that “arbitration improves access to justice, enhances the likelihood of recovery, delivers speedier results and is a superior option to the courts.”
Public Citizen had examined the outcome of debt collection arbitrations in California, and had found that consumers prevailed in very few of them. But Rutledge noted the consumers’ “win rate” is even lower when similar cases are taken to court.
Michigan resident Sharon Kruse learned firsthand how arbitration works for consumers. Kruse, a 63-year old widow and mother of seven used arbitration to settle a $300 dispute over a maintenance contract on her boiler. Mrs. Kruse won her case. In a videotaped statement, Kruse said arbitration was “very good for me—it was a simple and more friendly way to settle a problem. It empowers you.”
The survey was conducted for ILR in December by Bill McInturff of Public Opinion Strategies and Joel Benenson of Benenson Strategy Group. McInturff traditionally polls for GOP candidates and causes. Benenson polls for numerous Democratic candidates and is currently a strategist and pollster for Senator Obama’s presidential campaign. The survey questioned 800 people who are likely to vote in the 2008 elections and has a margin of error of + 3.5%.
The survey results and the analysis of the Public Citizen report are available online.
ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels. The U.S. Chamber of Commerce is the world’s largest business federation, representing more than 3 million businesses and organizations of every size, sector, and region.