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    Is There a Flight from Arbitration?

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    Full-text available at SSRN. See link in this record. (18.97Kb)
    Issue Date
    2008
    Author
    Drahozal, Christopher R.
    Wittrock, Quentin R.
    Publisher
    Hofstra University
    Type
    Article
    Version
    http://ssrn.com/abstract=1147697
    Metadata
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    Abstract
    Reports of dissatisfaction with arbitration are increasingly frequent. A recent article by Eisenberg and Miller suggests that businesses are fleeing arbitration, while [a]necdotal evidence suggests that franchisors are either abandoning arbitration altogether or using more 'carve-out' provisions (exempting specific categories of disputes from the franchise agreement arbitration clause). This paper examines whether the use of arbitration clauses has changed over time - in other words, whether there has been a flight from arbitration. It compares the use of arbitration clauses in franchise agreements from the same franchisors in 1999 and 2007 to see how, if at all, the clauses have changed. We find little evidence of a flight from arbitration by franchisors, at least in the aggregate. The percentage of franchisors using arbitration clauses is almost identical in 2007 as in 1999, although some franchisors have stopped using arbitration while others have started. Likewise, there is little indication that franchisees are fleeing arbitration by avoiding franchisors that use arbitration clauses. As for other terms in arbitration clauses, the most notable change has been the substantial increase in class arbitration waivers (from 50% to over 80% of clauses). With some exceptions, few terms seem to have been modified in response to the risk of court invalidation. Instead, other common changes appear to be designed to hold down costs, such as providing for a sole arbitrator instead of a panel of three arbitrators.
    Description
    Full-text available at SSRN. See link in this record.
    URI
    http://hdl.handle.net/1808/11257
    Collections
    • Law School Scholarly Works [621]
    • Distinguished Professors Scholarly Works [918]
    Citation
    Christopher R. Drahozal & Quentin R. Wittrock, Is There a Flight from Arbitration?, 37 HOFSTRA L. REV. 71 (2008).

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    Contact KU ScholarWorks
    785-864-8983
    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    785-864-8983

    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    Image Credits
     

     

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