Incentives for Large-Scale Arbitration: How Policymakers Can Influence Party Behaviour

S.I. Strong, Manley O. Hudson Professor of Law at the University of Missouri School of Law and Senior Fellow at the Center for the Study of Dispute Resolution, has authored “Incentives for Large-Scale Arbitration: How Policymakers Can Influence Party Behaviour (Chapter),” Dossier XIII: Class and Group Actions in Arbitration (ICC Institute of World Business Law, anticipated 2016); University of Missouri School of Law Legal Studies Research Paper No. 2015-27. In her chapter, Professor Strong examines the use of collective arbitration across international legal systems and the role of policymakers in promoting such procedures.

Here is the abstract:

At this point, the future of large-scale arbitration (i.e., class, mass and collective procedures) can best be described as mixed. On the one hand, class arbitration has been curtailed in the United States as a result of various US Supreme Court decisions upholding waivers of large-scale suits in arbitration. On the other hand, mass and multiparty arbitration in investment proceedings appears to be on the rise. Collective arbitration seems to exist somewhere between these two extremes, since there are an increasing number of collective procedures around the world (for example, various types of collective arbitration can currently be found in Spain, Germany and the United States) but parties appear to use such mechanisms relatively infrequently.

The uneven status of large-scale arbitration raises the question of why parties and states choose to use or develop class, mass or collective procedures. To answer this question, it is necessary to analyse the legal and social environments in which these procedures exist to determine whether parties have sufficient incentives to pursue large-scale arbitration and whether states can or should do more to promote these forms of dispute resolution.

This chapter attempts to address these concerns by considering the use and availability of incentives for large-scale arbitration and in particular whether and to what extent lawmakers can or should seek to influence party behaviour through default rules and other policymaking tools. In so doing, this chapter attempts to provide parties, practitioners and policymakers with a better understanding of how class, mass and collective arbitration operate within various legal and social environments and how the choice of certain legal frameworks can optimize both public and private values.

Professor Strong’s scholarly works are available for download from the Social Science Research Network.

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