Report | November 2020
Fairer, Faster, Better II: An Empirical Assessment of Consumer Arbitration
Empirical evidence shows that arbitration is an effective process for resolving consumer disputes. While litigation is a long and often burdensome process with many rules and requirements, arbitration is simpler and more flexible. We used a robust dataset of over 100,000 consumer cases from the largest arbitration providers and a national litigation database to analyze and compare arbitration and litigation from January 2014 to June 2020. The analysis shows that arbitration yields better results for consumer-claimants. Arbitration is faster than litigation for consumer-claimants to obtain an award. Importantly, consumer-claimants fare better in arbitration, winning 44% compared to 30% of awarded cases for litigation. Moreover, monetary awards for consumer-claimants in arbitration were higher than litigation on average. In sum, arbitration is faster and more favorable to consumers than litigation.