By David Arkush, Taylor Lincoln, and Peter Gosselar
Last November, Public Citizen released “The Arbitration Trap,” a scathing report exposing the one-sided nature of “justice” for consumers trapped by the National Arbitration Forum. The report inspired a lawsuit against the NAF by the city of San Francisco (WSJ[$], Watchdog Blog) and an in-depth examination of the practice by BusinessWeek (previous Watchdog Blog coverage here, Watchdog Blog’s analysis of NAF’s response to the article here).
“The Arbitration Trap” also prompted the Chamber of Commerce to commission a Catholic University law professor, Peter B. Rutledge, to write an official response. The Chamber also gave Rutledge financial support for a law review article in which he reviews empirical evidence on arbitration. These papers claimed that the broad sweep of serious academic research shows that our report was just plain wrong – “both on the facts and in its ultimate conclusions.”
We decided to check up on these academic papers. And – guess what? – it turns out that Rutledge and Co. don’t quite have the goods to back up their talk. In fact, their own sources don’t support their claims. Not a single comparative study Rutledge cites showed that individuals received larger average awards in arbitration than court. On other measures, the studies favored court overwhelmingly.