House Bill Gives “Plaintiff Lawyers” Un-FAIR Advantage
This week, the American Financial Services Association pushed back against another Congressional attempt to limit the use of arbitration in contracts. AFSA strongly opposed HR 1423, the Forced Arbitration Injustice Repeal (FAIR) Act, which would effectively outlaw arbitration provisions in private contracts. AFSA wrote to the House Judiciary Chairman and Ranking Member, noting “… class action lawsuits that take years to be adjudicated, clog the court system, and result in comparatively small payouts for consumers.” AFSA added, “Arbitration is already governed by the Federal Arbitration Act and has been approved by the Supreme Court, which recognized arbitration as a fair and effective mode of settling dispute between borrowers and creditors.”
AFSA also joined a coalition of more than 20 trade associations, representing a large swath of the American economy, that sent a letter to all members of Congress opposing the legislation. The letter argued that the only clear winners of the legislation are plaintiffs’ trial lawyers, who end up taking the lion’s share of class action settlement proceeds while providing little to consumers.
Despite industry’s efforts, and as expected, the bill passed out of the Judiciary Committee on September 10 by a largely party-line vote of 22-14. The legislation could be sent to the House floor as early as next week or the week after. While we believe the bill will pass the House, it’s unlikely to advance in the Senate.
AFSA will continue to work with members of Congress to highlight the value that arbitration provides consumers.
September 12th, 2019
