TO THE MEMBERS OF THE UNITED STATES CONGRESS:
We urge you to oppose H.R. 963, and S. 505, the “Forced Arbitration Injustice Repeal (FAIR) Act,” which would effectively outlaw arbitration provisions in private contracts. Federal law has protected arbitration as a means of resolving disputes between businesses, consumers and employees since 1925. Should they become law, these bills will not benefit claimants and will instead produce more class action lawsuits that will benefit the lawyers who bring them.
The use of pre-dispute arbitration clauses in contracts benefits consumers, small businesses and employees. For example, recent studies have found that employees and consumers prevailed more often, recovered more money, and resolved their claims more quickly in arbitration than in litigation.[1]In addition, courts work to ensure that arbitration agreements of all types are fair and do not provide an advantage to any party.
The only clear beneficiaries of eliminating arbitration clauses are class action lawyers who would directly benefit from increased class action litigation replacing cost-effective and fair arbitration as a viable way to resolve disputes. Studies have shown that class action settlements frequently provide, at best, a very low return to class members while class action attorneys take in millions of dollars. Their gain would come at the expense of consumers, small businesses and employees, many of whom are not even eligible to participate in class action litigation. And because their claims are too small to attract individual legal representation, they would be left without a remedy altogether if arbitration were eliminated.
Accordingly, we urge you to oppose H.R. 963 and S. 505.
Sincerely,
National
American International Automobile Dealers Association
American Bankers Association
American Financial Services Association
American Tort Reform Association
American Transaction Processors Coalition
Consumer Bankers Association
Consumer Data Industry Association
CTIA
FMI- The Food Industry Association
HR Policy Association
Innovative Payments Association (IPA)
National Association of Federally-Insured Credit Unions
National Association of Home Builders
National Association of Manufacturers
National Association of Mutual Insurance Companies (NAMIC)
National Restaurant Association
Real Estate Services Providers Council, Inc. (RESPRO)
Small Business & Entrepreneurship Council
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USTelecom – The Broadband Association
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[1] See Fairer, Faster, Better: An Empirical Assessment of Employment Arbitration (May 2019) available at https://instituteforlegalreform.com/research/fairer-faster-better-an-empirical-assessment-of-employment-arbitration/; and Fairer, Faster, Better II: An Empirical Assessment of Consumer Arbitration (November 2020) available at https://instituteforlegalreform.com/research/fairer-faster-better-ii-an-empirical-assessment-of-consumer-arbitration/.
