Sunday, April 26, 2020
In his Wednesday post (here), co-blogger Stefan J. Padfield highlighted a recent development in the arbitration area that I also want to bring to readers’ attention. I’m sure that all BLPB readers are a party to an arbitration agreement as these provisions have become so widespread in consumer adhesion contracts. The New York Times recently ran a fascinating article by Michael Corkery and Jessica Silver-Greenberg, ‘Scared to Death’ by Arbitration: Companies Drowning in their Own System. It details an innovative development in which entrepreneurial lawyers “are leaders in testing a new weapon in arbitration: sheer volume,” which is something the current arbitration system can’t handle.
Arbitration provisions in consumer adhesion contracts generally bar class-action lawsuits and might also bar class-wide arbitration. And it often makes little economic sense for an individual to take a large corporation to arbitration. Not surprisingly, many don’t. Corkery and Silver-Greenberg note that “Over the past few years, the nation’s largest telecom companies, like Comcast and AT&T, have had a combined 330 million customers. Yet annually an average of just 30 people took the companies to arbitration…” Now entrepreneurial lawyers such as Teel Lidow, who runs FairShake, and Travis Lenkner at Chicago law firm Keller Lenkner have entered the picture and are shaking up the consumer arbitration area with mass arbitration filings. It’s going to be a really interesting development to watch. It’s also a great reminder to all of the power of entrepreneurial thinking: “ 'The conventional wisdom might say that arbitration is a bad development for plaintiffs and an automatic win for the companies,’ he said. ‘We don’t see it that way.’ ” (Lenkner, as quoted by Corkery and Silver-Greenberg)