Utilising arbitration as a means of resolving disputes is becoming increasingly popular, encroaching on territory previously reserved for litigation. As we have begun to see in increasing numbers, the courtroom is not always the optimal setting for resolving a legal conflict. This is increasingly evident for issues requiring collective redress.

Class arbitration has been around for some time; indeed, the concept can be traced back hundreds of years to the ‘Bill of Peace’ in seventeenth century Britain. Though the process evolved in the UK, being replaced by representative action, it has truly flourished in the US. The American Arbitration Association (AAA) and the Judicial Arbitration and Mediation Services have both introduced rules allowing class arbitrations and, to date, the AAA has administered more than 300 class arbitrations.

A class arbitration is a alternative means of settling a dispute. A group arbitration action will see a group of plaintiffs band together to file a single complaint against an organisation. Class actions have been viewed as a particularly American procedure, but they have begun to spread to other jurisdictions. Most typically found in product liability and employment cases, class arbitrations require an arbitrator to decide upon liability and an appropriate award where applicable.

Over the past two decades, class action procedures in the US have migrated from litigation to arbitration in domestic practice. A number of state courts, particularly those in California, were the standard bearers for this switch. Those state courts facilitated arbitrations conducted on behalf of large numbers of similarly-situated claimants, more often than not those claimants, typically consumers.

Jan-Mar 2016 issue

Richard Summerfield