Arbitration and Access to Justice: Economic Analysis

Abstract

Equal Access is one of the most appealing and least contentious regulatory techniques in law’s repertoire. It aspires to give people even opportunity to utilize certain primary goods, and it does so by assuring openness — that access to these goods is not distorted by wealth or by privilege. But equal access often fails, because access and its benefits are deployed disproportionately by elites, yet paid for directly or indirectly by weaker groups. This article demonstrates the unintended and regressive cross-subsidy created by policies of access to information, compensation, insurance, and accommodations. It then examines the debate over access to courts, and the effect of mandatory arbitration agreements that limit such access. It demonstrates that access to courts is a benefit to the elite and of little value to weak consumers. Finally, it considers the effect of arbitration clauses on class actions, and whether weak consumers are potentially the indirect beneficiaries of class action litigation. This argument has theoretical merit, but it, too, is limited in ways that are often unappreciated.