Study after study has shown that consumers and employees actually fare better in arbitration than in court. In a 2006 study by Mark Fellows, Legal Counsel at the National Arbitration Forum, analyzed data from California and found that consumers prevail in arbitration 65.5% of the time, as compared to 61% of the time in court. Many other studies have shown that arbitration is generally faster, cheaper and more effective than the litigation system.
However, that is not stopping the trial lawyers in California from attacking arbitration. Why? Because when disputes are resolved through arbitration, the only ones who don’t benefit from arbitration are lawyers, who have fewer opportunities to profit from the abuse of our lawsuit system.
That’s why they’re supporting AB 465 (Hernandez), which seeks to eliminate pre-dispute employment arbitration agreements. This is a terrible idea. AB 465 will only drive up litigation costs by increasing individual claims and class action lawsuits against California employers of all sizes.
California’s economic recovery is dependent on its ability to create an environment where job creation can flourish. AB 465 flies in the face of that notion. California has been ranked dead last in CEO Magazine’s 11th annual survey of CEO opinions of Best and Worst States to do business for 11 straight years. The American Tort Reform Association’s “Judicial Hellholes” report identified California was ranked as having one of the least balanced litigation environments in the nation.
Arbitration is a valuable alternative method to resolving disputes in an efficient manner. On top of all the other issues with AB 465, it would place an even greater burden on our already grossly underfunded judicial system.
Click here to use CALA’s online tool and urge your legislators to reject this bill.