Access to Justice in the World Trade Organization: The Case for a Small Claims Procedure?

World Trade Review, Vol. 7, No. 4, pp. 587-640, 2008

51 Pages Posted: 1 May 2007 Last revised: 12 Aug 2013

See all articles by Gregory Shaffer

Gregory Shaffer

University of California, Irvine School of Law

Hakan Nordstrom

Swedish Board of Trade

Date Written: May 1, 2007

Abstract

The current dispute settlement system of the World Trade Organization (WTO) creates a particular challenge for small WTO Members with limited exports since litigation costs are more or less independent of the commercial stakes involved in a dispute. Small Members may therefore find it too costly to pursue legitimate claims. Reviewing the aims and practices of small claims procedures at the national level, we analyse whether a similar institution could be introduced at the WTO. While a strong empirical case can be made for such an institution, the legal and political challenges should not be underestimated. Indeed, can we at all define a 'small claim' in a meaningful way in a context where government policies are being disputed? Can such disputes ever be 'small' no matter the monetary value? And can we really expect a government to honour a ruling by an international small claims panel with no possibility of appeal? The answer is seemingly no on all three accounts and we have to think creatively if such an institution is to be adapted to the context of the WTO. One possibility entertained in this paper would be to limit the eligibility to cases where a WTO precedent already has been clearly established. If the small claims panel finds that the law is unclear and the precedent insufficient, the case would be transferred to the regular panel system. As an additional political safeguard, monetary damages (up to the threshold for small claims) could be considered as an alternative to compliance, so that there would be no expectation or requirement that a government must change its policy following a ruling of a small claims panel. Finally, given that a primary rationale for the procedure would be to address the challenges faced by lesser developed countries, WTO Members may wish to consider limiting availability of such procedure, as done in some national systems. Otherwise, the procedure might be used in practice primarily by larger, well-resourced countries for small claims against smaller, less well-resourced ones, replicating experiences with small claims procedures in some national systems. If use is to be restricted, WTO Members would have to determine which Members could use such procedures. This paper does not intend to propose a specific model, but rather to explore the rationale for such a procedure and its possible contours in order to provoke further discussion of this issue, as well as related ones regarding alternative means to facilitate access to the system.

Part I provides an introduction to the issues. Part II builds a prima facie case for a WTO small claims procedure based on three premises. First, trade stakes vary across the Members of the WTO. Second, claims involving smaller trade stakes are not offset by smaller litigation costs or a reduced need for domestic WTO legal expertise. Third, the alternative dispute resolution tracks provided by the DSU today do not substitute for small claims procedures. Part III briefly examines the experiences with small claims procedures at the national and EU levels, and then identifies ways to address some of the specific challenges posed in the WTO context. The paper concludes by acknowledging arguments against creating such a procedure while contending that institutional design choices ultimately must weigh the relative costs and benefits of available alternatives.

Keywords: International, International Economic Law, International Law, Transatlantic Relations, Comparative Law, Law & Society

JEL Classification: K00, K33, K23

Suggested Citation

Shaffer, Gregory C. and Nordstrom, Hakan, Access to Justice in the World Trade Organization: The Case for a Small Claims Procedure? (May 1, 2007). World Trade Review, Vol. 7, No. 4, pp. 587-640, 2008. Available at SSRN: https://ssrn.com/abstract=983586

Gregory C. Shaffer (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92612
United States

Hakan Nordstrom

Swedish Board of Trade ( email )

Sweden

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