Phil Goldberg, Partner and Co-Chair of Shook’s Public Policy Practice, testified before a U.S. House Judiciary subcommittee that predispute arbitration agreements provide “peaceful, quick and conclusive dispute resolution” for those who otherwise may have limited opportunities to seek redress of their claims.
Goldberg told the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law during the May 16, 2019, hearing that class actions are “notoriously bad at real redress for real people” who have low dollar-value consumer and employment claims. Because most lawyers won’t accept cases with a value of less than $100,000, Goldberg said, those who have “modest claims below the threshold for which someone can get a lawyer” will never have a chance to receive fair compensation or hold a wrongdoer accountable.
Moreover, individuals seldom receive adequate compensation when class actions do settle. “A lot of class action settlements, real people get nothing, or they get practically nothing,” Goldberg said. Finally, he reminded the subcommittee that litigation is by nature adversarial; in circumstances where parties want to retain an amicable relationship, the arbitration process can provide a less contentious arena in which to resolve disputes.
The House is currently considering bills that may significantly limit predispute arbitration, including the Forced Arbitration Injustice Repeal (FAIR) Act (H.R. 1423) and the Restoring Justice for Workers Act (H.R. 2749), which could prohibit predispute arbitration agreements of employment, consumer, antitrust or civil rights disputes.