Setting Boundaries Rather than Imposing Bans: Is it Possible to Regulate Consumer Arbitration Clauses to Achieve Fairness for Consumers?

Therese Wilson ()
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Therese Wilson: Griffith University

Journal of Consumer Policy, 2016, vol. 39, issue 3, No 4, 349-364

Abstract: Abstract The benefits of arbitration as a form of alternative dispute resolution in business to business disputes, particularly international business to business disputes, are well recognized and will be discussed in this article. Concerns arise, however, where arbitration is sought to be imposed as a method of dispute resolution upon consumers, through the inclusion of arbitration clauses in consumer contracts. Whilst there is a body of literature which argues strongly against the enforceability of arbitration clauses in consumer contracts, there is little consideration in the literature as to the possible benefits of consumer arbitration which might warrant enforceability within particular regulatory boundaries. To date, the pro-arbitration stance taken by some commentators and courts is premised on freedom of contract arguments rather than consumer benefit. This article will explore whether it is possible to overcome a number of the current concerns regarding the use and enforcement of consumer arbitration clauses through constructing a regulatory framework which will give rise to a fair alternative dispute resolution mechanism for consumers. The article will begin by exploring the current context which includes limitations upon the arbitrability of consumer disputes in a number of jurisdictions. It will then go on to consider what might be the benefits of facilitating consumer arbitration as a mechanism for alternative dispute resolution, particularly in the context of international consumer disputes. The article will then outline a range of concerns regarding the perceived unfairness of consumer arbitration and will draw upon current and potential regulatory models to consider ways of addressing those concerns. The article will conclude with recommendations for a regulatory model designed to facilitate fair consumer arbitration.

Keywords: Consumer arbitration; Consumer protection; Alternative dispute resolution; Access to justice (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s10603-016-9322-z

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