The Searle Civil Justice Institute recently added further evidence to inform the ongoing debate about the benefits and drawbacks of consumer arbitration. The March 2009 preliminary report, which reviewed 301 consumer arbitration cases administered by AAA, makes a number of findings:
“The upfront cost of arbitration for consumer claimants in cases administered by the AAA appears to be quite low.
AAA consumer arbitration seems to be an expeditious way to resolve disputes.
The average time from filing to final award for the consumer arbitrations studied was 6.9 months. Cases with business claimants were resolved on average in 6.6 months and cases with consumer claimants were resolved on average in 7.0 months.
Consumers won some relief in 53.3% of the cases they filed and recovered an average of $19,255; business claimants won some relief in 83.6% of their cases and recovered an average of $20,648.
No statistically significant repeat-player effect was identified using a traditional definition of repeat-player business.
Consumer claimants won some relief in 51.8% of cases against repeat businesses under a traditional definition (i.e., businesses who appear more than once in the AAA dataset) and 55.3% against non-repeat businesses – a difference that is not statistically significant.
Utilizing an alternative definition of repeat player, some evidence of a repeat-player effect was identified; the data suggests this result may be due to better case screening by repeat players.
Arbitrators awarded attorneys’ fees to prevailing consumer claimants in 63.1% of cases in which the consumer sought such an award.
The study made additional findings about the AAA Enforcement of the Due Process Protocol:
A substantial majority of consumer arbitration clauses in the sample (76.6%) fully complied with the Due Process Protocol when the case was filed.
AAA’s review of arbitration clauses for protocol compliance was effective at identifying and responding to clauses with protocol violations.
The AAA refused to administer a significant number of consumer cases because of Protocol violations by businesses.
As a result of AAA’s protocol compliance review, some businesses modify their arbitration clauses to make them consistent with the Consumer Due Process Protocol.”
