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S-26 ¦ FEBRUARY 24, 2020 ALTERNATIVE DISPUTE RESOLUTION

Consumer Arbitration Clause Concerns:
How Can We Ensure a Fair Process?

ADR specialist Harry N. Maza- By Harry N. Mazadoorian
doorian, distinguished senior
fellow in the Center for Dispute
Resolution at Quinnipiac University
School of Law.
The March 2020 issue of Consum-
er Reports contains an article taking
strong issue with mandatory pre-
dispute binding arbitration clauses
in the consumer setting. While the
article challenges such clauses in a
number of areas, its primary focus is
on their use in connection with the
retail sale of products ranging from
mattresses to washing machines and
child car seats.
The article represents the latest
in a growing number of criticisms
challenging the use of such clauses ADR specialist Harry N. Mazadoorian,
in consumer contracts. Several years distinguished senior fellow in the Center for Dispute Resolution at
ago, the New York Times carried a
Quinnipiac University School of Law.

series of articles highly critical of such pre-dispute The first challenge is that many consumers are
binding arbitration clauses. The series and a relat- not even aware that they are subject to an arbitra-
ed editorial decried Americans “being locked out tion clause and would challenge an assertion that
of court” and called for “a public outcry loud and they have agreed to it. Second, the arbitration pro-
long enough to stir the White House and Congress cess provided to consumers often lacks many of the
to action.” At that time, I wrote about the “Omi- safeguards, such as discovery, available in litigation
nous Clouds of Change” following the groundswell or even commercial arbitration. Further, arbitrators
of legislative, judicial and other opposition to such are not bound to follow rules of evidence and even
provisions. legal precedent. Similarly, that rights to challenge the
Critics continue to call for a major overhaul of award are extremely limited. Critics also claim arbi-
the growing use of such clauses and in many cases trators have a built-in bias to support “repeat players.”
their abolition. Other challenges have extended be- The Consumer Reports challenge cites as a special
yond the product purchase area to other situations concern the fact that the “because arbitration is con-
including credit cards and cellphone contracts to ducted in private and its outcome is typically kept
employment contracts. under wraps, the underlying problem may be kept
The Consumer Report article, like so many before hidden.”
it, takes issue with virtually all aspects of these pre- Other issues involve restrictions in such clauses
dispute clauses: on the use of class actions. Of particular concern is

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