Class Action Arbitration: A New Challenge?

Abstract

With the increasing use of arbitration clauses in standardized mass contracts, questions have arisen regarding the admissibility and applicability of the class action to the field of arbitration. The US appears to have now given «class action arbitrations» the green light. Class actions, therefore, are no longer limited to state court litigations in the US, but are now regularly seen in arbitration proceedings as well. Since the beginning of 2000, many European countries have also started to adopt new legislation regarding class, mass and group action litigation. Thus, Europe can no longer be perceived to be entirely opposed to class or mass action litigation in principle. It could therefore be only a matter of time, before first class action arbitrations are also initiated in Europe. The article seeks to shed some light on various questions arising from the combination of class actions and arbitration. In particular, after analyzing the background of class action litigation in the US, the challenges associated with class action arbitrations are described and the main obstacles to European class action arbitrations discussed. Finally, some thoughts regarding how Europe can prepare itself for class action arbitration are provided.