Class Actions and their Waiver in Arbitration – Vol. 15 No. 2

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Author: Hans Smit*

Published: December 2005

United States
Dispute Resolution and Litigation
Class Action



Arbitration is rapidly becoming the fashion of the day. It has long been perceived as beneficial in that it settles disputes in a single instance by a tribunal specially selected for the purpose by the parties that applies its own procedure, which excludes a jury, and, to a large extent, its own law. No wonder it is viewed as offering a welcome escape from ordinary litigation, in three or four instances, with invasive, expensive, and time-consuming procedures, such as pre-trial discovery and jury trials.

Once the major players in the marketplace started seriously to consider opting for arbitration, their lawyers naturally sought to draw as many additional benefits as possible from their choice of an adjudicatory system that is rooted in the parties’ agreement rather than the laws of procedure and substance dictated by the state. This search has provided great impetus for their creative efforts to secure maximum benefit for their clients. After all, as the Supreme Court has repeatedly stressed, it is the arbitration agreement that the legislatures, both federal and state, have told the courts to enforce. And the lawyers therefore turned their attention to the arbitration agreement and to the great freedom in the making of contracts traditionally fostered by the common law.

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*Stanley H. Fuld Professor of Law and Director, Center for International Arbitration and Litigation Law, Columbia University. The author gratefully acknowledges the assistance of Andreas Stier, of the Class of 2005, Columbia Law School, in the preparation of this article.