The Consumer Financial Protection Bureau’S Arbitration Study

56 Pages Posted: 7 Jun 2018

See all articles by Jayson Johnson

Jayson Johnson

affiliation not provided to SSRN

Todd Zywicki

affiliation not provided to SSRN

Date Written: 08/03/2015

Abstract

The Consumer Financial Protection Bureau's Arbitration Study: Report to Congress 2015 does not support the case for ex ante regulation of mandatory consumer arbitration clauses. It contains no data on the typical arbitration outcome?a settlement?and it is these arbitral settlements, and not arbitral awards, that should be compared to class action settlements. It does not address the public policy question of whether, by resolving disputes more accurately on the merits, arbitration may prevent class action settlements induced solely by defendants' incentive to avoid massive discovery costs. It shows that in arbitration consumers often get settlements or awards, are typically represented by counsel, and achieve good results even when they are unrepresented. In class action settlements, the Consumer Financial Protection Bureau reports surprisingly high payout rates to class members and low attorneys' fees relative to total class payout. These aggregated average numbers reflect the results in a very small number of massive class action settlements. Many class action settlements have much lower payout rates and higher attorneys' fees.

Suggested Citation

Johnson, Jayson and Zywicki, Todd, The Consumer Financial Protection Bureau’S Arbitration Study (08/03/2015). MERCATUS WORKING PAPER, Available at SSRN: https://ssrn.com/abstract=3191304 or http://dx.doi.org/10.2139/ssrn.3191304

Jayson Johnson (Contact Author)

affiliation not provided to SSRN

No Address Available

Todd Zywicki

affiliation not provided to SSRN

No Address Available

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