Still Rebutting Public Citizen's Arbitration Study . . .

The Fall 2008 issue of Dispute Resolution Magazine, published by the ABA Dispute Resolution Section hasn't hit our mailbox yet, but one of the articles has emerged via the website of a co-author located at the conservative Washington think tank, the American Enterprise Institute.

In an article published Monday called "The Current State of Consumer Arbitration," Sarah Rudolph Cole, a professor at Ohio State University's Moritz College of Law, and Ted Frank, an American Enterprise Institute resident fellow, compile four studies that purport to refute the September 2007 Public Citizen report that consumers are getting a raw deal with mandatory arbitration.

The key disputing report is one by Navigant Consulting that takes aim at Public Citizen's data interpretation.  The Navigant study--paid for by the Institute for Legal Reform, the U.S. Chamber of Commerce's tort-reform lobbying arm that has led the battle against Public Citizen and others seeking to restrict or eliminate mandatory procedures--"found major discrepancies between the underlying data and Public Citizen’s statistical analysis of it.  According to Navigant’s report, Public Citizen’s numbers are quite misleading." [Footnote omitted.]

Navigant's principal gripe, according to the article, is that Public Citizen "slanted its numbers by omitting from its analysis more than 8,000 cases that were dismissed without an award before an arbitrator was selected because the creditor decided not to pursue charges for lack of evidence or otherwise." The Institute for Legal Reform previously had criticized the sampling in the Public Citizen study, which concentrated on consumer cases conducted by the National Arbitration Forum, a Minneapolis provider.  [NAF has a large collection of documents defending its work and supporting arbitration in consumer disputes here.] 

"Public Citizen has succeeded in creating a false perception among legislators, some advocacy groups, and some academic commentators," write Cole and Frank.

But in their conclusion, the authors concede that not all is perfect in the arbitration world:

At the same time, perceptions are important. One concern that NAF could easily address is the repeated use of the same arbitrators in hundreds of cases. NAF and other organizations have already pushed to diversify their ranks and could add the numerous qualified neutrals available to their rolls [sic] so that consumers will be more convinced that they are receiving a fair hearing. If consumers incorrectly perceive that the arbitration process is unfair, it behooves the arbitral organizations and companies utilizing arbitration to continue efforts to address any appearance of  unfairness.  [Footnote omitted.]

--Russ Bleemer, Editor, Alternatives