April 10, 2017
Today, millions of Americans will buy a car, take out a loan, or choose a wireless carrier. When they do, without giving it a second thought, they’ll also sign a contract requiring that both parties resolve their grievances through arbitration instead of in court.
How do disputants fare under these standard arbitration provisions, especially in view of recent U.S. Supreme Court decisions directing consumers to use two-party arbitration as opposed to class action? Professors Andrea Cann Chandrasekher and David Horton of UC Davis School of Law (King Hall) explore this important question in their article, “After the Revolution: An Empirical Study of Consumer Arbitration,” 104 Geo. L.J. 57 (2015). Taking a deep dive into the data, they analyze close to 5,000 cases filed with the American Arbitration Association (AAA) between July 2009 and December 2013.
Their investigation “behind the black curtain of the extrajudicial tribunal” is unprecedented in its scope and has earned the team the 2017 Mangano Dispute Resolution Advancement Award.
The $5000 annual award recognizes scholars whose published empirical research has furthered the advancement and understanding of the values and skills of dispute resolution. It was established through the generosity of Hon. Guy J. Mangano '55, '83HON, who has dedicated his 40-year career to promoting dispute resolution, first as presiding justice of the New York State Appellate Division, Second Department, then as a state legislator, and now as an arbitrator and mediator.
"David and Andrea have answered a question that has been the subject of controversy for years: whether companies that arbitrate over and over have an advantage over consumers who have never arbitrated before,” says Professor Jeff Sovern, an expert in consumer law. “Their careful work has made a major contribution to the policy debate over whether pre-dispute arbitration clauses should be enforceable—a debate that’s taking place in Washington D.C., among other places, today.”
Professor Sovern joined St. John’s Law colleagues and students recently in welcoming Professor Horton to the Law School, where he accepted the Mangano award on behalf of his research team, presented their paper, and discussed their ongoing scholarly work.
“Receiving the award and presenting the paper was a terrific experience,” Professor Horton says. “I could not have been more impressed by the faculty and students at St. John’s. They had obviously read the article carefully, and they asked thoughtful and interesting questions.”
Aaron Fine ’18, one of the student attendees, says: "I think Professor Horton and Professor Chandrasekher recognized a pattern and sought to address it. In a profession dictated by logic, it’s important to realize that every trend happens for a reason, including companies more and more frequently turning to mandatory arbitration clauses.”
The paper and presentation made an impression on Ipek Basaran ’18 as well, particularly the finding that pro se parties won more cases than repeat plaintiffs’ attorneys. “This result supported my assumption that alternative dispute resolution methods, including arbitration, are more favorable than litigation to people who represent themselves, as there are no strict rules of evidence and procedure is more flexible,” she says.
As Aaron Leaf ’17 recognizes, the study conducted by Professors Chandrasekher and Horton has practical implications because it dispels certain widely held beliefs about dispute resolution forums. “For instance, it shows that consumers fair worse in commercial arbitration as opposed to litigation,” he says, adding, “The more hard facts you have about what to expect in terms of costs and outcomes, the better you can counsel your client in these matters.”
Brendan O’Brien ’18 agrees that the study offers valuable insights for practitioners—and for law students who are learning what it means to be zealous and effective advocates. “As a law student and legal intern in the Securities Arbitration Clinic, it was illuminative to see how claimants’ attorneys are coming up with innovative ways to protect their clients’ rights as they bring their claims against repeat players in arbitration proceedings.”
Sharing that she was “so very disappointed to have missed the awards ceremony and the opportunity to meet the St. John's faculty and students,” Professor Chandrasekher says, “David, however, is an amazing co-author and a dynamic presenter, and so I was delighted to know that he could attend to represent us both.” As they continue to work together, the two hope to expand their dataset to include every dispute resolution provider and other kinds of cases. They would also like to look more closely at the relationship between company size and success in arbitration.
“David’s and Andrea’s research focuses an important, objective lens on the polarized debate surrounding pre-dispute arbitration clauses,” says Professor Elayne E. Greenberg, who leads the Mangano award selection process as assistant dean for dispute resolution programs, professor of legal practice, and director of the Hugh L. Carey Center for Dispute Resolution. “They provide a more nuanced understanding of how pro ses, plaintiffs’ lawyers, and repeat corporate players fare in their justice quest. The research also suggests how dispute resolution providers could reinforce specific practices and policies to help make arbitration a more level playing field for all. We appreciate Judge Mangano’s ongoing support, which ensures that this kind of vital, empirical research and legal scholarship is recognized and encouraged.”