Daniel J. Leffell (Partner), Marc Falcone (Partner) and Jeffrey D. Kleinman (Associate), Paul, Weiss, Rifkind, Wharton & Garrison LLP
The American Bar Association (ABA) has criticised the Arbitration Fairness Act, the arbitration reform bill currently pending before the US Senate and House of Representatives, which would prohibit mandatory pre-dispute binding arbitration provisions in certain consumer contracts.
In its August meeting, the American Bar Association's (ABA) policymaking body, the House of Delegates, passed resolutions and adopted a report regarding the Arbitration Fairness Act, the arbitration reform bill currently pending before the US Senate and House of Representatives, which would prohibit mandatory pre-dispute binding arbitration provisions in certain consumer contracts. In the resolution, the ABA states it "opposes federal state and territorial legislation or regulations that would reduce or discourage the use of international commercial arbitration." The report is critical of the Arbitration Fairness Act, especially the House Bill, stating that "[i]n its current form, the language in the House Bill could enable any party to an arbitration agreement to evade arbitration and bring nearly every dispute to court, even if it is not a consumer, employment or civil rights dispute." With its criticism of the Arbitration Fairness Act, the ABA has signalled its opposition to Congressional efforts to reduce international commercial arbitration opportunities which it perceives as more efficient than in-court dispute resolution.