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National Arbitration Forum Release: Ernst&Young Study Shows that Consumers Fare Better in Arbitration than in Traditional Lawsuits

Posted by Media Relations on Wednesday, February 23rd, 2005 - Comments »

Based on consumer arbitration data spanning four years from the National Arbitration Forum, this independent study conducted by Ernst & Young confirms that consumers win 55% of the time in arbitrations against businesses, and that consumers find the arbitration process beneficial for resolving legal claims. Minneapolis, MN (PRWEB) February 23, 2005 — The National Arbitration Forum announced today that a newly released study of consumer lending cases conducted by Ernst & Young, entitled Outcomes of Arbitration. An Empirical Study of Consumer Lending, confirmed that consumers found the arbitration process to be beneficial in resolving legal claims, and that reports that consumers are disadvantaged by contractual arbitration are clearly erroneous. The observations from the study as noted in the Executive Summary state:

  • Consumers prevailed more often than business in cases that went to an arbitration hearing. A review of the National Arbitration Forum cases that resulted in an arbitration decision shows that consumers are more likely to prevail than the business involved in the dispute; 55 percent of the arbitrations were resolved in the consumer’s favor. This compares favorably with similar results in state courts across the nation.
  • Consumers obtained favorable results in close to 80 percent of the cases that were administered by the National Arbitration Forum.
  • A substantial majority of consumers surveyed were satisfied with the arbitration process as shown through the 69 percent who indicated that they were satisfied or very satisfied with the arbitration process as conducted by the National Arbitration Forum.

“The results of this study clearly support the advantages and benefits of arbitration to consumers in resolving disputes,” said Curtis Brown, vice president and general counsel for the National Arbitration Forum. “And there are two very significant points that bear emphasis. First, consumers prevail in arbitrations conducted by the National Arbitration Forum at the exact same rate they prevail in state court—55 percent. Second, more than 40 percent of consumers who initiate claims with the National Arbitration Forum actually get their ‘day in court’ to tell their story as opposed to only 2.8 percent of cases that go to trial in this country.”Brown went on to say that it is important that consumers, in particular, understand that arbitration provides fair access to justice that they may not otherwise have through a lawsuit. In the National Arbitration Forum, a consumer will have his or her claim heard by a highly experienced attorney or former judge who is bound by National Arbitration Forum procedural rules to apply the substantive law. Also, a number of courts around the country, including the U.S. Supreme Court, have reviewed the National Arbitration Forum’s rules and have stated that its fees and rules are fair and reasonable. “As an organization,” Brown continued, “our greatest opportunity and responsibility is to educate all users on the advantages and benefits of alternative dispute resolution in providing them with fair, reasonable, and impartial access to justice.”About the National Arbitration ForumThe National Arbitration Forum is one of the world’s largest neutral administrators of alternative dispute resolution services, including arbitration and mediation. Representing a distinguished panel of over 1,500 lawyers and retired judges who know and apply the law objectively according to their respective jurisdictions, the National Arbitration Forum provides businesses and consumers alike with fair, reasonable, and impartial access to justice. Founded in 1986, the National Arbitration Forum administers more than 50,000 cases annually. Headquartered in Minneapolis, Minnesota, the National Arbitration Forum also has offices located in New Jersey and Los Angeles. Additional information is available at the National Arbitration Forum’s Web site: Visit the National Arbitration Forum blog for news and information on arbitration, mediation and alternative dispute resolution.The actual Ernst and Young study can be found in pdf format at: Diane Welter, Senior Marketing Manager, 651-604-6746# # #

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