If you want to have an impact on the design of the first online arbitration platform designed specifically for consumer disputes, please fill out THIS survey designed by a group of students at the Harvard Negotiation and Mediation Clinical Program.

This project focuses on the development of online consumer arbitration, and how best to create a software that provides all the elements required by law, but also by the end users. How can such a product effectively meet the promise of online arbitration made to consumers (i.e., fair, affordable, etc.)?

When the Supreme Court decided in April 2011 that the 1925 Federal Arbitration Act (FAA) preempted California state contract law in AT&T Mobility in a five to four decision – thereby reversing the Ninth Circuit decision upholding the California ban on class action waivers – arbitration scholars and commentators expressed their vivid concern for the rights of consumers and employees. The majority opinion written by Justice Scalia found that corporations could prevent consumers from reaching the courts based on pre-dispute arbitration clauses contained in adhesion contracts. Specifically, the majority ultimately argued that Section 2 of the FAA – also known as the “savings clause” – provides that state contract law shall apply to arbitration agreements in a non discriminatory manner, and as the Californian ban on class-action waiver somehow had a disproportionate effect on arbitration agreements, it is preempted by the FAA.

Since this landmark decision, many major corporations dealing with large customer bases (e.g., eBay, PayPal, etc.) have inserted mandatory pre-dispute and binding arbitration. However, the cost structure of these processes makes it unrealistic for any consumer with low-value disputes to file a case against these companies. One of the only realistic solutions is the development of online consumer arbitration.

This project aims at providing a clear, unbiased answer to this problem, and publish a suggested flow or software design that will overcome the existing barriers to adoption, and offer a product that will gain support both on the consumers’ side, and that of corporations.

Related Posts