arbitration and the consumer financial protection bureau
TRANSCRIPT
Arbitration and the Consumer Financial Protection Bureau:
A Centrist Proposal
Stephen J. WareProfessor of Law
University of [email protected]
Federal Arbitration Act (FAA)enacted in 1925
Pro-Contract
Enforce adhesive arbitration clauses “save upon such grounds as exist at law or in equity for the revocation of any contract.”
Consumer “Protection” Law 1965-2015
Anti-Contract
“Protect” consumers by regulating terms of adhesion contracts.
Left RightDon’t enforce consumers’ adhesive arbitration agreements.
Enforce consumers’ adhesive arbitration agreements.
But if they are enforced, courts should hear defenses to enforcement like fraud, duress & unconscionability.
Arbitrators, rather than courts, should hear defenses.
Don’t enforce class waivers. Enforce class waivers.
Courts should vacate legally-erroneous arbitration awards.
Courts should confirm legally-erroneous arbitration awards.
Left RightConsumers, employees and other ordinary individuals should not be able to form enforceable adhesive arbitration agreements.
Consumers, employees and other ordinary individuals should be able to form enforceable adhesive arbitration agreements.
But if the law does enforce adhesive arbitration agreements, then courts should be able to initially hear defenses to their enforcement and to the enforcement of the contracts containing them.
Arbitrators, rather than courts, should initially hear defenses to the enforcement of the contracts containing such agreements and sometimes even to the enforcement of the arbitration agreement itself.
Adhesive arbitration agreements’ class waivers should not be enforced at all, or at least should not be enforced under circumstances in which such waivers in a non-arbitration agreement would be unenforceable.
Adhesive arbitration agreements’ class waivers should be enforced under circumstances in which such waivers in a non-arbitration agreement would be unenforceable.
Courts should vacate awards arising out of adhesive arbitration agreements upon grounds not currently found in the FAA, particularly legal error by the arbitrator.
Courts should vacate awards only under the very narrow grounds expressly stated in the FAA, which do not include “error of law” by the arbitrator.
Left RightConsumers, employees and other ordinary individuals should not be able to form enforceable adhesive arbitration agreements.
Consumers, employees and other ordinary individuals should be able to form enforceable adhesive arbitration agreements.
But if the law does enforce adhesive arbitration agreements, then courts should be able to initially hear defenses to their enforcement and to the enforcement of the contracts containing them.
Arbitrators, rather than courts, should initially hear defenses to the enforcement of the contracts containing such agreements and sometimes even to the enforcement of the arbitration agreement itself.
Adhesive arbitration agreements’ class waivers should not be enforced at all, or at least should not be enforced under circumstances in which such waivers in a non-arbitration agreement would be unenforceable.
Adhesive arbitration agreements’ class waivers should be enforced under circumstances in which such waivers in a non-arbitration agreement would be unenforceable.
Courts should vacate awards arising out of adhesive arbitration agreements upon grounds not currently found in the FAA, particularly legal error by the arbitrator.
Courts should vacate awards only under the very narrow grounds expressly stated in the FAA, which do not include “error of law” by the arbitrator.
Arbitration and the Consumer Financial Protection Bureau:
A Centrist Proposal
Stephen J. WareProfessor of Law
University of [email protected]