Mass Arbitration

A groundbreaking legal alternative has emerged in addressing mass consumer disputes.

For decades, companies have relied on contractual arbitration clauses and class action waivers to stifle collective action and limit legal challenges. Such clauses require consumers and employees to seek resolution outside of the courtroom through a process known as forced arbitration.

According to the American Association for Justice, forced arbitration, “requires Americans to agree to surrender fundamental constitutional rights, often without ever realizing they’ve done so.” The group’s recent research reports note an “endemic” of forced arbitration clauses plaguing the modern marketplace.

In the wake of mandatory arbitration clauses and contractual waivers, which severely limit wronged parties in their ability to pursue legal action, Milberg attorneys are turning to an innovative way to seek collective redress through a legal process known as mass arbitration.

Mass arbitration differs in many ways from its class action counterpart.

While a class action lawsuit involves one lawsuit filed on behalf of many consumers, mass arbitration occurs when many consumers – hundreds, thousands – file individual arbitration demands against a company for the same alleged wrongdoing, typically through the same counsel, at the same time.

Enterprising and (highly) capitalized attorneys file arbitration demands on behalf of individual claimants subject to mandatory arbitration agreements… against the same defendant for the same course of conduct. The attorneys then do this again. And again. And again.

Maria J. Glover, Mass Arbitration

Most corporate arbitration agreements hold the involved company fully (or partly) responsible for the cost of administrative fees that result from filed arbitration demands.

Since a single arbitration demand may prompt hundreds or even thousands of dollars in administrative fees, mass arbitration incentivizes the alleged company to avoid paying millions, often encouraging swift resolution for those harmed.

Unlike class actions, mass arbitration takes place outside of the courtroom before an arbitrator. While the arbitrator’s decision is legally binding, the mass arbitration resolution process is lax compared to the rules and formal proceedings of litigation.

Evolution of Mass Arbitration

Over the last five years, arbitration clauses have become the center of heavily contested courtroom debate.

Many large corporations – including Intuit and Amazon – that once relied on fine-print arbitration clauses, intended to keep consumer complaints out of the courtroom, have since faced thousands of simultaneously filed arbitration claims, an irony Consumer Reports has called “a taste of their own medicine.”

The AAJ has recognized the same paradox, noting most corporations, “have not appreciated consumers and employees turning the tables against them, putting corporations in the ironic position of trying to undermine the very system they themselves set up.”

Judges are often ruling in favor of consumers’ rights, encouraging many large companies to abandon their restrictive arbitration clauses altogether.

These companies fought tooth and nail to get rid of class actions, and are now asking for class actions because the arbitrations they demanded are costing too much money. Judges have realized it and are laughing them out of court.

-Brian Fitzpatrick, Vanderbilt University Law Professor

Alternative dispute resolution remains an evolving landscape, one that law firms, consumers, and corporations will be closely monitoring for months (and years) to come.

For now, very few law firms are positioned to handle the complex bandwidth of mass arbitration – which requires enhanced technology, financial resources, and multi-phased communication with affected individuals – to successfully bring claims to resolution.

With unparalleled experience and secured recoveries in this developing practice area, Milberg emerges as a trailblazer in mass arbitration.

Milberg’s Mass Arbitration Practice Group

Led by Senior Partners Dan Bryson, Gary Klinger, and Jonathan Cohen, Milberg’s Mass Arbitration Practice Group attorneys have successfully recovered more than $250 million for wronged consumers through alternative dispute resolution.

Recent Recoveries

• $64.5 Million Settlement – Parris, et al. v. Meta Platforms, Inc. – Milberg obtained a settlement of $64.5 million for 4 million consumers after employing a mass arbitration strategy on behalf of more than 100,000 consumers
• $35 Million Settlement – Boone v. Snap, Inc. – Milberg obtained a settlement of $35 million for 3 million consumers after employing a mass arbitration strategy on behalf of more than 10,000 consumers
• Numerous Confidential Settlements