Studies Conclude Arbitration Is A Black Hole With Repeat Player Bias (But Also Faster & Cheaper Than Court)
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You know what rarely rises to the top of my “to do” list? Reading scholarly articles and studies about arbitration. Blech. But, since I haven’t seen any good court decisions lately, it is time to visit the neglected pile of articles. Turns out, I should have read some of them right away. Below are summaries of five new-ish articles that have crossed my desk. A few offer peeks into arbitration data that is generally not available and some conclusions to chew on over this Thanksgiving holiday.
First is “Arbitration Nation,” an empirical study of 40,775 consumer, employment and tort cases filed with four different arbitration providers between 2010 – 2016 (AAA, JAMS, ADR Services and Kaiser).* The data came from two sources: public data that the State of California requires arbitration providers to file, as well as a cache of data gathered by the New York Times. After reviewing the data, the authors conclude: 1) arbitration is faster that court litigation and generally more affordable for plaintiffs; 2) there was no surge in arbitration filings after the Concepcion decision, but there is evidence of at least a few mass-individual filings (same law firm filing 200 – 1300 individual arbitrations against the same defendant in the same time period); 3) plaintiffs win at a lower rate in arbitration than in court, and pro se plaintiffs “struggle mightily” in arbitration; and 4) the concerns about “repeat-player bias” are “well-founded” — but those repeat players are both defendants who appear often, as well as plaintiffs-side law firms who appear often. For example, within the JAMS set of data, the authors report that a consumer’s probability of winning increased 79.9% if it was represented by a “super repeat-player” law firm (as compared to appearing pro se), and an employee’s probability of winning increased 55.1% if he was represented by a “high-level” repeat player firm. (See pp. 42-43.) Read this article if you: want to compare JAMS and AAA (on cost and speed); want to see data on how Concepcion affected arbitration filings; or want to see statistical evidence of “repeat player” bias.
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