American Association for Justice Releases Report Detailing Truths of Forced Arbitration

Today, the American Association for Justice released a groundbreaking new report detailing the fundamental truths of forced arbitration using data provided by the arbitration providers themselves. The Truth About Forced Arbitration examines five years of data on consumer and employment forced arbitrations reported by the nation’s two largest arbitration providers and found that Americans are more likely to be struck by lightning than they are to win in forced arbitration. 

  • Though there are more than 800 million arbitration clauses estimated to be in effect, this new study found there are only 6,000 consumer arbitration claims filed every year. On average, only 382 consumers a year win a monetary award in forced arbitration.
  • Similarly, 60 million workers are subject to forced arbitration, but only 0.02% of these workers tried to pursue a claim. Over the five years studied, only 282 employees were awarded monetary damages in forced arbitration, which is less than one-ten-thousandth of one percent of covered workers.
  • Over the five years studied, consumers brought 6,012 claims valued at at least $3.7 billion in damages. They won monetary awards in just 131 cases. In contrast, banks brought 137 cases, yet somehow won monetary awards in 314.
  • In the five years studied, there were only 16 nursing home arbitrations reported at AAA. Ten were brought by consumers and six were brought by corporations. No consumers won any of their cases while corporations won four of the six they initiated.

Given how prevalent forced arbitration clauses are, evidence of just how few cases are ever pursued through forced arbitration makes clear that forced arbitration is providing virtual immunity to corporate America. As this report shows, there is a clear reason for the disparity between the number of forced arbitration clauses in effect and the number of cases that are ever filed by consumers and workers: forced arbitration is a rigged, secretive, corporate-designed system in which the odds are stacked against Americans. 

The Huffington Post just published a story explaining how the report “shows that not only do companies typically emerge victorious from arbitration but, perhaps more damning, they rarely even have to use the process.”