St. John's University Law Faculty Blog

The New York Times published a letter from Professor Jeff Sovern on December 30 on debt collection and arbitration. Sovern wrote in part:

You show that debt collectors sue consumers in court when it suits them but bar consumers from bringing court actions by invoking obscure arbitration clauses in consumer contracts.

Businesses defend their right to do so because, they claim, arbitration is better than court for resolving disputes. But if arbitration is superior, why do businesses want to sue in court, rather than arbitrate, as your article shows and an empirical study confirms?

The answer is that businesses value arbitration chiefly when it enables them to block class actions so they may take advantage of consumers for small amounts without worrying about consumers suing them.