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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Edited by B. Hanotiau & E.A. Schwartz.
Published by ICC, 2016; 220 pages; ISBN: 978-92-842-0360-4; available in print and digital formats from www.storeiccwbo.org.
Class arbitration has been described as ‘a worst-of-all-worlds Frankenstein monster’1 and as ‘inconsistent with the fundamental attributes of arbitration’.2 This book examines the so-called ‘monster’ of class and group actions in arbitration, enquiring whether such criticism is warranted, whether arbitration has a role to play in the effective resolution of mass claims, and looking at possible solutions to the procedural and legal difficulties of arbitrating mass claims.
The book adopts a comparative law approach, with authors treating these issues from a variety of perspectives. It shows that there is no one-size-fits-all approach to collective redress in arbitration. It draws on the experience of class action in the US and contrasts this with the approach in Europe and Canada.
The authors do not shy away from addressing the difficult issues such as:
• arbitrability of mass claims particularly in the consumer and employment areas;
• the consensual nature of the arbitration and the potential conflict with arbitration of mass claims particularly where an award purports to bind parties who did not participate in (or know of) the arbitration, such as in the case of opt-out class actions;
• the private nature of arbitration, which comes into conflict with the need to inform members of a particular class or group of the collective arbitration in order for them to choose whether to participate in the arbitration or benefit from any potential award; and
• the potential conflict between confidentiality in arbitration and the public interest of having cases of large-scale injury being heard in public, particularly in the context of consumer or employment claims, in order to act as a deterrent to other potential wrongdoers.
In the opening chapters, James Carter and Christopher Drahozal chart the rise and fall of class action arbitration in the US from the Supreme Court's decision in Green Tree Financial Corp v Bazzle which opened the door to class arbitration to its subsequent decisions in AT&T Mobility LLC v Concepcion, American Express Co v Italian Colors Restaurant and Oxford Health Plans LLC v Sutter, which severely restrict the scope of class arbitration in the US by recognising the effectiveness of class action waiver clauses. However, the authors make a robust case that while its scope may be more limited, class arbitration in the US is certainly not dead.
Genevieve Saumier and Pierre Dalphond look at collective arbitration from a Canadian perspective. They examine the current policy trend of Canadian legislatures and courts to resist class arbitration, particularly in the area of consumer claims. They identify that there is some scope for development of class and group arbitrations in Canada but such development will depend upon legislative and judicial support.
José Miguel Júdice, Philippe Billiet, Christian Borris, Laura Carballo Piñeiro and Elie Kleiman set out the European perspective on collective actions in arbitration, which in large part defines itself as distinct from US class action style proceedings.
José Miguel Júdice examines the European approach to group and class arbitration, particularly in relation to the consensual nature of arbitration. He argues convincingly that the development of effective collective arbitration procedures in a European context will depend greatly on their being available on an opt-in basis.
Phillipe Billiet undertakes a thorough comparison of the different approaches to collective arbitrations across various European jurisdictions. This is a valuable study and illustrates the need for flexibility in establishing arbitration procedures for class or group claims in order for such procedures to be able to adapt to local legal and policy frameworks.
Christian Borris discusses the use of group arbitrations to resolve corporate disputes arising between shareholders of privately held German companies. He explores the roles played by (i) the German Federal Court in setting out the criteria for such group arbitrations and (ii) the German Institution of Arbitration (DIS) in establishing supplementary rules to provide a procedural framework for such claims. He concludes by considering where these claims are located in the spectrum of group and class actions and how lessons learned from the German experience could be applied in the context of other forms of collective arbitration.
Laura Carballo Piñeiro considers the legislative framework established by Spain for collective consumer arbitration. She assesses the benefits of the current system while identifying several shortcomings and discussing proposals for reform.
Elie Kleiman examines the future of class, collective and mass arbitrations, by seeking to answer the question of whether European class arbitration is an oxymoron. He examines the obstacles that would need to be addressed by states, arbitral institutions and private parties in order to develop arbitration as a vehicle for the effective resolution of cross-border mass claims in a European context. He also discusses the potential role that online dispute resolution may play in such development.
Eloise Obadia, Carolyn Lamm, Eckhard Hellbeck, Onur Saka, Luca Radicati di Brozolo and Flavio Ponzano form a panel of distinguished experts who discuss mass claims in international investment cases. Their papers look at the current state of development of mass claims in investment arbitration, and enquire into the lessons to be learned from ICSID cases against Argentina involving thousands of Italian bondholders. In particular, the papers address the prerequisites for mass claims in an investment arbitration context and whether these are matters of jurisdiction and/or admissibility. They also address the practical issues that arise concerning the conduct and management of investment arbitrations involving mass claims.
Professor Strong in her chapter presents a macro view of commercial and policy incentives and disincentives to promote large-scale arbitrations. She also considers how states can take steps to create an environment to foster the development and use of arbitration to resolve large-scale disputes. She highlights the need to balance the interests of the various stakeholders because the adoption of large-scale arbitration will not become widespread unless it is attractive to all parties.
As is evident from the above, the book traverses a wide range of topics from many different viewpoints. It is a credit to the co-editors, Bernard Hanotiau and Eric Schwartz, that, despite its breadth, there are common themes running through the book. These common threads are drawn together well in the editors' opening and closing remarks.
This work is a valuable contribution to the ongoing discussion and development of class and group arbitration. It not only outlines the development of collective arbitrations to date but also offers guidance for the future. Overall, the authors are optimistic about the future of collective arbitration but recognise that there are hurdles to overcome and that the solutions to such issues may vary between jurisdictions. The key features of arbitration – including its neutrality and flexibility, party autonomy and the enforceability of awards – mean that it has the capacity to adapt and evolve in order to provide an effective means of resolving mass claims.
1 Chamber of Commerce of the United States of America’s amicus curiae in Marriott Ownership Resorts, Inc. v Sterman No. 15-10627 at 9 (11th Cir. 1 Apr. 2015).
2 AT&T Mobility LLC v Concepcion 563 U.S. 333, 131 S. Ct. 1740 at 1748 (2011).