US Chamber of Commerce Institute for Legal Reform publishes paper to help tackle mass arbitration attacks

Article summary

The US Chamber of Commerce Institute for Legal Reform has produced a paper outlining their concerns at the use of mass arbitration by some plaintiffs. Mass arbitration occurs when plaintiffs’ lawyers will simultaneously file a massive number of largely identical demands triggering huge up-front arbitration fees thereby pressuring the other party to settle, abandon arbitration, or pay that fee simply to have the chance to defend itself. This paper explains the problems and highlights ineffective responses from courts and major arbitration providers. Solutions offered include a version of the bellwether process to resolve mass arbitrations fairly and efficiently, a change in the rules and fee structures of arbitration providers to diminish the incentives for filing abusive mass arbitrations and a call for state bar associations to investigate potential ethical violations that accompany mass arbitrations.