Capping the Costs of Consumer and Employment Arbitration
29 Pages Posted: 30 Oct 2010 Last revised: 15 Feb 2012
Date Written: October 27, 2010
Arbitration agreements requiring arbitration but imposing costs of thousands of dollars can effectively make it impossible for consumers and employees to bring their disputes in any forum. The Supreme Court has stated that high costs can make an arbitration agreement unenforceable, but has not articulated clear standards. Lower courts are split two ways on the issue: some courts have adopted a per se approach and others a case-by-case approach. This article argues that the Federal Arbitration Act should be amended to take a third approach: arbitration fees paid by consumers or employees should be limited to what consumers or employees would pay if they litigated their claim.
Keywords: arbitration, cost, FAA, fee, consumer, employee
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