Companies are increasingly drafting arbitration clauses worded to prevent consumers from bringing class actions against them in either litigation or arbitration. If one looks at the form contracts she receives regarding her credit card, cellular phone, land phone, insurance policies, mortgage, and so forth, most likely, the majority of those contracts include arbitration clauses, and many of those include prohibitions on class actions. Companies are seeking to use these clauses to shield themselves from class action liability, either in court or in arbitration.
This article argues that while the unconscionability doctrine offers some protections, case-by-case adjudication is a costly means of attacking class action prohibitions. Thus, this article proposes that the interests of both public policy and efficiency would be better served by federal legislation prohibiting companies from precluding consumer class actions.
This article has been cited by the Canadian Supreme Court in Seidel v. TELUS Communications Inc., 2011 SCC 15 at para. 166 (Mar. 18, 2011) (LeBel & Deschamps, JJ., dissenting).
67 Law & Contemp. Probs. 75 (2004).
Sternlight, Jean R. and Jensen, Elizabeth J., "Using Arbitration to Eliminate Consumer Class Actions: Efficient Business Practice or Unconscionable Abuse?" (2004). Scholarly Works. Paper 277.