Will the United States Remain Exceptional in Enforcing Predispute Arbitration Clauses in Consumer Contexts?

Abstract

“American exceptionalism” has been used to reference the United States’ outlier policies in various contexts, including its love for litigation. Despite Americans’ reverence for their “day in court,” their zest for contractual freedom and efficiency has prevailed to result in U.S. courts’ strict enforcement of arbitration provisions in both business-to-business (“B2B”) and business-to-consumer (“B2C”) contracts. This is exceptional because although most of the world joins the United States in generally enforcing B2B arbitration under the New York Convention, many other countries refuse or strictly limit arbitration enforcement in B2C relationships due to concerns regarding power imbalances and public enforcement of consumer protections. The resulting clash in arbitration policy has left consumers in cross-border cases uncertain whether they must abide by arbitration clauses in an increasingly global marketplace. This short essay, published in a Venezuelan journal, chronicles the evolution of laws proposed in the United States to limit this enforcement of predispute arbitration clauses in consumer cases.

Keywords: Arbitration, ADR, Dispute Resolution, Consumer, Consumer Law