ADR-Related Legislation
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Larson Frisby, of the ABA Governmental Affairs Office, recently offered an update on the status of federal ADR legislation and other related measures. Some of the most interesting proposals are briefly described below.
The Dodd-Frank Act required the Consumer Financial Protection Bureau to conduct a study on pre-dispute arbitration agreements. That study issued on March 10, 2015. It was highly critical of both consumer mandatory arbitration and consumer class action waivers. It seems likely that the CFPB will issue regulations limiting or even prohibiting such clauses to resolve consumer financial disputes. (Of course, whether making the courts the sole avenue of redress for consumers is an improvement is another question.)
The Arbitration Fairness Act continues its (by now) perennial appearance and seems destined to another perennial defeat. The Act would ban all mandatory pre-dispute arbitration “agreements” for employment, consumer, antitrust and civil rights disputes. The current version does not ban pre-dispute arbitration clauses in franchise agreements. The bill is in committee and not expected to be acted upon.
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