“Rather than preserve and strengthen arbitration, [H.R. 1423] would wipe it out for enormous numbers of consumer and employment disputes, as well as many civil rights and antitrust disputes. What that would do is not end injustice, but promote it.”
WASHINGTON — Rep. Doug Collins (R-Ga.), Ranking Member of the House Judiciary Committee, made the following opening statement at today’s markup of H.R. 1423.
Below are the remarks as prepared.
Ranking Member Collins: Arbitration gives consumers a simpler, cheaper and faster path to justice than does the judicial system. That is what the evidence showed the last time the Judiciary Committee performed oversight of the arbitration system, during the 111th Congress. That is what the evidence showed earlier this term, when we renewed that oversight in the Subcommittee on Antitrust, Commercial and Administrative Law.
In fact, the evidence in favor of preserving access to arbitration has only increased over time. Companies are continuing to improve the fairness of arbitration agreements and have long been following improved arbitration protocols to help assure due process is given to claimants against them. The market has resolved problems in consumer credit arbitration considered during the 110th and 111th Congresses. A string of new Supreme Court decisions has demonstrated the Court’s confidence in the arbitration system.
Even the Consumer Financial Protection Bureau’s 2015 arbitration study highlighted problems consumers would face if they had no access to arbitration, but instead had to rely on flawed judicial class-actions. The study emphasized that the rise of pre-dispute, mandatory binding arbitration agreements in consumer settings did not come out of nowhere. It stems directly from the repeated abuses of class actions that have plagued the judicial system in recent decades.
That is not to say the arbitration system is perfect, but the arbitration system is generally good and should be preserved.
Unfortunately, that is not what the “Forced Arbitration Injustice Repeal Act” would do. Rather than preserve and strengthen arbitration, it would wipe it out for enormous numbers of consumer and employment disputes, as well as many civil rights and antitrust disputes.
What that would do is not end injustice, but promote it. In far too many cases, when everyday consumers and employees are denied rights to arbitrate — rights that their contracts guarantee them — it means they will be shut out of the justice system entirely.
If their claims are small enough that they can go to small claims courts, that may be an option, but, in 46 states and the District of Columbia, small claims courts only take claims worth $10,000 or less. Thirty of those jurisdictions’ limits are set at $5,000 or less. Millions of claimants with cases worth amounts not much higher than those ceilings will never be able to pay courtroom lawyers enough to take their cases to ordinary trial courts.
Perhaps, if these claimants could qualify as plaintiffs in class action lawsuits, they could join in those cases. Millions of people, however, will not be able to do so, and even those who join a class action lawsuit often expect to get nothing in return but a postcard telling them they’ve won a few dollars and cents or a coupon.
Meanwhile, class-action plaintiffs’ trial lawyers will reap multi-million-dollar shares in fees from the recoveries they dole out to plaintiff class members at mere pennies on the dollar.
If you ask me, it would be better to call this bill the “Forced Class-Action Injustice Guarantee Act.”
Rather than wipe arbitration out, we should be considering ways to make it better, and, while we do that, we should do everything we can to reform all abuse out of the class-action system.
Senate Judiciary Committee Chairman Graham suggested we do just that at the Senate Judiciary Committee’s hearing on arbitration earlier this year. He was exactly right. The worst result Congress could deliver for the American people would be to wipe out their access to arbitration, while leaving them no alternative but an unreformed judicial system.
I encourage all of my colleagues to vote against this bill.