Addressing the Class Claim Conundrum with Online Dispute Resolution
Amy SCHMITZ, "Addressing the Class Claim Conundrum with Online Dispute Resolution", (July 20, 2020) No. 2020-20 Journal of Dispute Resolution, University of Missouri School of Law Legal Studies Research Paper, Available at SSRN: https://ssrn.com/abstract=3656648.
Consumers with similar claims in the United States (U.S.) often join forces to launch representative, or “class,” actions. This allows them to obtain remedies with little cost and effort and serves a “private attorney general” function by bringing light to purchase problems that public enforcement offices may not have the resources to address. This is especially important for lower dollar claims that are too costly for each consumer to pursue individually. Nonetheless, some have criticized class actions in the U.S. for forcing settlements and padding the pockets of lawyers, while leaving consumers with minimal pay–outs. At the same time, European consumers complain that the lack of class action procedures in the European Union (E.U.) has diminished their access to remedies for small dollar claims. Accordingly, there are complaints on both sides; some view the “U.S. class action system” as abusive while others argue that the E.U. should adopt a similar system in order to provide access to remedies through mass claims. This Article provides a brief comparison of U.S. versus E.U. law with respect to class actions, noting how this dichotomy creates a “class action conundrum” due to these actions’ vices and virtues. The Article then argues that in light of this conundrum, it is time to consider innovations beyond class actions. The time is ripe to renew consideration of a global online dispute resolution (“ODR”) process for mass claims to promote consumer protection on a worldwide level.
This content has been updated on 11 August 2020 at 13 h 25 min.